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Alleviating Poverty through Social Entrepreneurship

Updated on September 1, 2012
Carpets for Communities is a not-for-profit organization working in Cambodia, empowering women to produce carpets, earn additional income, and hence allowing their children to go to school.
Carpets for Communities is a not-for-profit organization working in Cambodia, empowering women to produce carpets, earn additional income, and hence allowing their children to go to school. | Source

What is social entrepreneurship or social business? If entrepreneurship means creating and managing a business, then social entrepreneurship means starting a business for a social cause. Its goal is oriented towards common good for the people instead of individual good. A common aspect of social entrepreneurship is the employment of the people, especially the underprivileged, to work together in the social business for the benefit of the society.

Creativity and Sustainability

Just like entrepreneurship, there are 2 factors that are important in social entrepreneurship: creativity and sustainability. Creativity, innovation, and thinking out of the box are required to solve the lingering social problems in the society. A famous example of this is the Grameen Bank, a microfinance organization in Bangladesh initiated by Muhammad Yunus. To make the bank work, Professor Yunus learnt all the conventions of a commercial bank and reversed it. "Once I learned how they do it, I just did the opposite." Unlike the conventional bank that requires collateral as the basis for risk management, Grameen Bank did not require and collateral. Instead, they use a very ingenious method of creating a social group of lenders, where they can support each other.

The second factor in social entrepreneurship is sustainability. The purpose of social entrepreneurship is to create lasting changes to the society even after we step out. It should not just be a temporary relief like what one time donation is, where people become the passive recipient of the aid. Instead of this, social business models look for sustainability by involving the community to work together and raising up local leaders. Generally, social entrepreneurs capitalize their business by grants and donations. However, social business may aim to become a for profit business in the long run to ensure sustainability. Of course, there is nothing wrong with making money through social business as long as we didn't forget and abandon the social aspect of the business. Making money is the reality of life.

Why does social entrepreneurship focus on women?

Women play a pivotal role in their family and society. In Asia and many developing countries, women are underprivileged and discriminated. Two-thirds of adult illiterates are women, and they are less likely to have access to education and jobs. They also lack their own identity in the society. For instance, in India, women are known as someone's wife, someone's daughter, or someone's mother. They don't have their own identity in the male-dominated society. It may be surprising for people in developed countries to find out that in developing countries, husband treated their wife as no more than a housekeeper and a maid. It is of no surprise that when social entrepreneurs enter the community, there are doubts and resistances due to this perception.

Social entrepreneurship aims to change the mindset of the people and give women their deserved position and identity in society. When women earn money for the family, the husband may feel that women is more valuable, and of course more than just maid. It is about the mindset of the society, and training or education can be the cure for this incorrect mindset. In addition, research have also shown that women invested 90% of the income back to the family as compared to 40% for men. Hence, investing in women means investing for the future of the families, communities, and countries.

Project Light by Nusantara Development Initiatives aims to provide rural villages in Indonesia with sustainable sources of light, which is solar lamp. These villages fall outside the national electricity grid and are shrouded in darkness at night.
Project Light by Nusantara Development Initiatives aims to provide rural villages in Indonesia with sustainable sources of light, which is solar lamp. These villages fall outside the national electricity grid and are shrouded in darkness at night. | Source

How to Manifest Social Ideas?

Just like business in general, brainstorming with the people on the community of interest is crucial for you and your team. We will never know what those people really need if we don't talk to them. For example, we can ask what can we do to make the children go to school. The parents may reply that they need jobs to earn money and enroll their children to school. How do we get them a job according to their education level and skills? We can provide them with training to make small merchandise and distribute them to potential market. This way, jobs are created and it's just about time before we can see both tangible and intangible changes in the village.

In dealing with social business, having book knowledge is great, but the field may be different and we can learn along the way. Adaptability is equally important since the culture can be significantly different. Society changes and we need to adapt to those changes. People appreciate those who are down to earth and those who make efforts to conform to their culture and lifestyle. Sincerity does matter a lot when we work with people in rural village. Resistance is common and we need to sincerely convince them that we are there to make changes for the betterment of the community.

How Can We Survive with Social Business?

Money is not everything, but everything needs money, and that's the reality of life. Social entrepreneurs are not people who blindly sacrifice their life for social causes, disregarding their own needs and family. How to strike a balance between social causes and profit that we get rom running a social business? Just like business in general, social entrepreneurs may find that they need to sacrifice their pocket money with no return or even with some losses. Due to the social aim of the business, we can get grant and funding from government or some philanthropic organizations to kick start the business. Alternatively, donations may be raised.

The next step may be to aim for profit, so that the business is sustainable without external funding as well as expanding the business to impact more people and put more area under service. From here onwards, part of the profit can be used to pay for our teams and ourselves. The principal aim of the business, though, is for social goals. The profits generated for the entrepreneurs are secondary and should be seen as additional reward for sustainability and expansion of the social goals. The main reward for social entrepreneurs is to see the positive impact they introduced to the community and village.

In summary, social entrepreneurs aims to introduce social aspects that change the mindset of the people, creating employment for the people, and all these will break the poverty cycle in the long run. Alleviating poverty involves changing things inside the people and not just what lie outside. Social entrepreneurs utilize their creativity and entrepreneurial spirit to manifest these social ideas, aim for sustainable business, and hence introducing lasting impacts to the people. Business in general revolves around the more urbanized area, and thus the people in the rural villages are excluded from the mainstream business ventures. Social entrepreneurship is an important link that embraces those people for the betterment of the society.

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    • Goodpal profile image

      Goodpal 3 years ago

      Beautifully written article on a topic misfit in the money makers' world!

      "Alleviating poverty involves changing things inside the people and not just what lie outside."

      You have rightly pointed out the need to change people and their thinking, particularly those who rule the world with their money. Empowering the poor with microcredit and sustainable micro-business is perhaps the best way lift people out of poverty. Wage-employment in reality means endless labor just for survival. Companies would always find ways to exploit and pay the least.

      It is more dignified to have a small business that can be grown in the future or forming cooperatives than going through slavery of jobs at the mercy of others.

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      Howard Schneider 4 years ago from Parsippany, New Jersey

      Excellent Hub, Ricksen. Social entrepeneurship is and should be a key in lifting up societies from poverty. It gives people the tools to sustain their businesses. Long term solutions such as these are much better and sustainable than short term bandages.