Even though people are increasingly becoming familiar with the term of social entrepreneurship, but most often they associate it with non-profit organizations. When Habitat for Humanity’s Linda and Millard Fuller and Teach for America’s Wendy Kopp were named by Schwab Foundation for Social Entrepreneurship as prominent social entrepreneurs, most people must have gone confused. Even though people know both of these organizations well enough, but not everyone is aware of their strategies of earned income. In fact they depend mostly on donations and grants, so much so that these social entrepreneurs are experts in drawing beneficent donations.
The key to their entrepreneurial skills is that they have mastered innovate ways of accosting social concerns and mobilized the resources in order to support their mission. Schwab follows the view of Bill Drayton that the key concept behind social entrepreneurship is not income, but pioneering innovation and effectiveness. This view has been strongly based in all social entrepreneurship definition theory. The selection of the two organizations is quintessential to this fact – Teach for America strives to enlist gifted graduates who could teach in economically weak schools, while Habitat marshals volunteers to develop affordable housing for the poor.
Despite widespread development in this field and efforts in pipeline to find an innovative social entrepreneurship definition, many people consider it as non-profits making earned income. Some social organizations consider this as a dangerous narrow view that needs to be rectified. Earned income is nothing more than a means towards a social objective and it is not one of the best options. It might even have negative effects on the organization by taking away on its talent resources that could be concentrated more towards meeting its social mission. It is only one of the strategies for funding and it requires to be evaluated on a case to case basis.
The focus on earned income develops a troublesome idea with two bottom lines. Social results cannot be matched in terms of profits or given equal importance. A failure or loss on the social impact front cannot ever be compensated with any amount of profit. It is considered a waste if a social entrepreneur succeeds in making profits, but not in turning them into effective social impact. Even though on the platform of management view, financial success is quite important, but it could never match with the level of social impact. Hence, more or less, social entrepreneurship definition intends to blend the financial bottom-line along with social impact in a cost-effective manner.