Social Entrepreneurship

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What is social entrepreneurship? Many people have a wrong idea of what this means. This definition has actually been around for sixty years or so. It just describes a person that uses basic business principles to impact others for good, instead of simply making money.

This doesn’t mean that you can’t turn a profit. As long as you use a portion of your income to benefit society, you are considered a social entrepreneur. An example would be giving a certain percentage of your profits to charities.

It’s no secret that giving back is critical. People who are givers are generally much happier and healthier than those who aren’t.

So is it better to start a for-profit or non-profit company as a social entrepreneur?

It depends on your circumstances. Starting a non-profit company is not easy. For just about any cause, you need money. And to get this money, you are totally dependent on donations and grants if you can’t turn a profit.

Getting these is not easy. There are so many charities out there that it’s hard to convince others to donate to yours. And if you ever want to change your organizations’ focus, this is extremely difficult. In most cases, this has to be approved by a board of directories, and this is a very difficult process.

On the other hand, having a for-profit company enables you to be more flexible. This is because you can pick and choose which charity you want to donate to. And you don’t have to ask the permission of a board of directors if you ever want to change it.

Also, it’s easier to be demanding of employees as opposed to volunteer workers. Therefore, harsher deadlines are easier to reach.

And the most obvious benefit of for-profit companies is that they make you money. Earning a liveable income takes time. Having a non-profit company often requires time after your paid work is done. However, by having a for-profit firm, you can combine your good deeds with your livelihood and therefore often be more effective.

So which should you choose?

Again, it just depends on your situation. If you know exactly what cause you want to support, and have lots of time, it might be good to start a non-profit. However, if you aren’t sure which cause you want to support, and are limited on time, it might be wise to start a for-profit company. Hopefully the differences outlined will help you make the right choice.

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