Some social entrepreneurs and social enterprises are expressing the desire to avoid such a label. Additionally, knowledge among citizens of what social entrepreneurship is and means is still generally low, even though the sector has been around for several decades. What might be amiss? I argue that the ongoing failure to coalesce around a recognised definition or model of social entrepreneurship is part of the problem, revealing risks and opportunities for the sector at a worldwide level.
My research on social entrepreneurship in England suggests there are three different – and only partially overlapping – conceptions of what social entrepreneurship is and of how it should be supported. The first and most prominent part of the sector is focused on the concept of social enterprise, that is, businesses trading for social purpose. It is very heterogeneous in terms of players involved and ways in which social enterprises are described and organised. Within it, the main source of funding for both social enterprises and sector intermediaries is the government, and both the citizen and business sectors are mostly seen as customers.
The second and more “niche” part of the sector is more cohesive and focused on social entrepreneurs, described as lone heroes disrupting the system to eliminate the root causes of social inequality and injustice. Here, the role of the government is very limited and businesses and charities are seen as advisors and funders, rather than customers, while communities are the beneficiaries.
The third one, despite being the original conception of the term in England and the most widely adopted “on the ground”, is presently the most neglected by the public discourse. It describes social entrepreneurs and enterprises as acting to enhance their communities, either through involving community members in economic activities and decision making, or redistributing resources within a given area or population of interest. In this part of the sector, boundaries and players’ roles are very blurred and there are multiple typologies of social entrepreneurial activity, sometimes overlapping with other areas above.
Is this division a trivial matter interesting only for academic debates? I argue that there are a number of important practical issues, which either directly or indirectly stem from the lack of a clear definition. First of all, it hinders the ability of government or international bodies to create tax benefits or effective funds to support social entrepreneurship. Without being able to constrain the field of organisations entitled to receive such support, such efforts are frequently ineffective.
Secondly, the lack of a clear definition contributes to maintaining low levels of knowledge about what social entrepreneurship and social enterprises are, and what their value for society is. This, in turn, often hampers their ability to attract private funds. I know, indeed, from the interviews I conducted for my PhD project that some social enterprises and entrepreneurs face the problem of being perceived as “too business-like” for foundations, charities and private donors and “too social” for traditional investors and businesses (and sometimes even for the social investment sector).
Thirdly, the lack of a clear definition means that it is also much harder to establish roles and rules of interaction within the sector. Businesses are sometimes requested to be commercial partners or to involve social enterprises in their supply chain and sometimes they are requested to act as advisers and philanthropists. Government and local authorities would like to outsource public services to social ventures rather than to businesses but often they find themselves unable to distinguish between the two and to obtain the guarantee that there will be no “mission drift” once a contract is awarded.
Finally, the lack of a clear definition implies a lack of clear sector boundaries and of a clear positioning within the wider economic system. Many supporters and insiders continue to proclaim their hope that social entrepreneurship will become mainstream and either change the way that all businesses operate (‘social enterprise’) or will make the whole third sector more efficient and financially sustainable (‘social entrepreneurship’). Can these things happen while the sector keeps pushing in different directions, thus reducing its relevance both within the business and the third and public sectors?
I would like to conclude this post with two thought-provoking questions. First of all: why not refer to social enterprises as sustainable businesses? This might be the first step to merge this part of the sector with movements such as the B Corporations, in order to jointly represent a new, more socially-savvy side of the business sector, able to ask for tax incentives and to attract social investors and funds. Social entrepreneurship could be reserved as a definition of innovative projects carried out by third sector organizations trying to tackle the root causes and not just the symptoms of social issues, thus distinguishing them from the traditional charities and NGOs delivering fundamental but more traditional social products and services. Activities not fitting with these two definitions but that are important at community-level could be labelled as “community-based entrepreneurship” or just be re-included in the broader third sector.
Secondly, can sector supporters and intermediaries try to find a compromise sector definition accepted by all? As expressed by some interviewees contacted for my PhD research, the most influential organisations in the sector appear to be connecting and networking with one another but are in reality very territorial. They all hold on to their own conception of social entrepreneurship and they all hope to drive the sector in their desired direction, thus making it increasingly difficult to find a solution to the definitional and support debate. Sometimes creating a good ecosystem of support might entail stepping back and coordinating what happens as a skilled director rather than as the star of the show. Allowing the formation of clarity around the sector, its definition and its boundaries, while continuing to lobby and campaign for it, might really unlock those financial resources, public support and understanding that many organisations are craving for.