Social business entrepreneurship: the only sustainable solution

KARACHI: There is no dispute today that Pakistan needs a disproportional focus on developing its social sector. Unfortunately very little support is being provided by the government for miscellaneous reasons. As a consequence, conscientious members of our civil society feel the urge to step in and help make a difference.  Individuals who take the initiative to address, fund and fix a social problem are known either as ‘philanthropists’ or ‘social entrepreneurs’.

Philanthropists versus social entrepreneurs 

Both of these individuals are focused on bringing a social impact, but with a key fundamental difference.  Philanthropists have an innate passion to help using their personal wealth and funds. They help the poor and needy by donating to NGO’s and foundations, but they personally do not get involved in its operation.

On the other hand, a social entrepreneur finds innovative solutions to pressing social problems. He or she invests their time and money in an opportunity that has a measurable social and environmental impact. But more importantly, within the design of such an activity is built-in a financial return – a business idea with social benefits.

Philanthropy or charity is unfortunately not a sustainable solution.  After a while, donor fatigue settles in – especially as the demands and expectations for additional funds keeps on piling up with no clear relief in sight.  Social entrepreneurs, on the other hand, seek to place their capital in the positive power of enterprise, with the clear intention of helping people at the bottom of the pyramid while making a respectable return on their investment. Social impact in this case is sustainable, as the entrepreneur does not think twice when the need arises for additional capital in order to expand the venture into different areas and sectors.



The most critical stage for a social entrepreneurship venture is in its inception, when the need to ‘validate’ a business model for financial viability and scalability manifests itself. This is an iterative process which requires running market trials and testing various assumptions to fine-tune the business model. Many ambitious ideas die at this stage. This is where a philanthropist can help plug the gap and fund the validation process without any expectation of a return. Once the business model has been validated, the social entrepreneur can use their investment to sustain and scale it further.

Two key advantages of social entrepreneurship is that efforts are both sustainable and scalable. Just like any business venture, the owner expands and continues to invest as long as they keep getting a respectable return.

What drives a social entrepreneur?

Social entrepreneurs are businessmen with hearts of gold. They are driven by a passion to bring about wide-scale social change and dedicate their lives in achieving these goals. They are very persistent, as a social enterprise ‘working model’ requires a lot of testing and efforts to garner the support of communities in order to have a widespread and meaningful impact.



Interestingly, social entrepreneurs have existed throughout history, but today this is developing into a mainstream vocation. In Pakistan, the social sector is doing amazing work, running complete hospitals, imparting education, providing health insurance, rehabilitating disabled workers and street kids, but these are unfortunately run on donations and are not sustainable. My request and challenge to these organisations is to look for a sustainable idea, convert the social work into a business venture with investment, return and shareholders. This way the much needed social impact will be sustainable, scalable and not under threat in case their passionate founder or volunteers depart.

THE WRITER WORKS IN THE CORPORATE SECTOR AND IS ACTIVE ON VARIOUS BUSINESS FORUMS AND TRADE BODIES

Published in The Express Tribune, December 3^rd, 2012.