Development Economics

Innovation In Social
Entrepreneurship
Presented to Professor Hugo Ruiz


Prepared by
Macky Chorghe
Katherine Naud
Theresa Krupka

April 9, 2014
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TABLE OF CONTENTS
1. INTRODUCTION......................................................................................................... 3
2. CONCEPT OF SOCIAL INNOVATION ................................................................... 4
2.1 PARADIGMS IN DEVELOPMENT COOPERATION ........................................................... 4
2.2 SOCIAL ENTREPRENEURSHIP VS OTHER PARADIGMS ................................................ 6
2.3 CHALLENGES IN SOCIAL ENTREPRENEURSHIP ............................................................ 7
2.4 NEGATIVE CRITICS FOR SOCIAL ENTREPRENEURSHIP .................................................. 8
3. DIFFERENT OPINIONS IN SOCIAL ENTREPRENEURSHIP ........................... 9
3.1 FOR-PROFIT AND NOT-FOR-PROFIT: TWO MASTERS? ................................................ 9
3.2 UNCLEAR EXPECTATIONS FOR TRANSPARENCY ....................................................... 10
3.3 IMPACT OR CLEVER MARKETING? ........................................................................... 11
3.4 NAIVETY .................................................................................................................. 12
4. CURRENT TREND IN THE FIELD OF INNOVATION IN SOCIAL
ENTREPRENEURSHIP ................................................................................................ 14
4.1 EVOLUTION OF SOCIAL ENTREPRENEURSHIP ............................................................ 14
4.2 CURRENT PRACTICES ............................................................................................... 15
4.3 ROLE OF TECHNOLOGY IN SOCIAL INNOVATION ...................................................... 15
4.4 SOCIAL ENTERPRISES AND INNOVATORS .................................................................. 17
4.4.1 ASHOKA: Innovators for the public formed by Bill Drayton .......................... 17
4.4.2 Grameen Bank: Muhammad Yunus ................................................................. 18
4.4.3 TOMS: Blake Mycoskie .................................................................................... 18
5. CONCLUSION ........................................................................................................... 19
BIBLIOGRAPHY ............................................................................................................................... 20







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Innovations in Social Entrepreneurship
1. Introduction
We are in a world that is changing: the population is growing, the urban regions are
taking more space than rural areas, the poverty gap is getting bigger in certain cities and
we know we will soon or later face the scarcity of natural resources. Social
entrepreneurship tries to respond to these issues, usually concentrating more on issues
like lack of education, poverty, hunger, bad health system, etc. through innovation. Social
entrepreneurship is viewed as a process that catalyzes social change and addresses
important social needs in a way that is not dominated by direct financial benefits for the
entrepreneurs (Mair & Marti, 2006). It requires a unique kind of individual; this
individual must be driven, innovative, creative, resourceful, and inspired by the desire to
improve their community. The traditional entrepreneur must discover a gap in the
market for a product or service that its target market desires or will desire. A social
entrepreneur however, must also do this and, in addition, must seek to fulfill a need that
is socially fulfilling and that seeks to improve society as a whole. The beauty of social
entrepreneurship is that it encourages the innovative entrepreneur to tackle the tough
social problems that the government and other efforts have failed to aid.

The focus of todays society has shifted into this perspective that we must not work to
improve our lives, following the survival of the fittest mentality, but rather we should
consider how our actions might affect others. Small business, as an example, are now
considering their impact on the environment; many have started to use environmentally
friendly packaging, encourage recycling by both staff and customers, and support local
community efforts to improve the areas in society that need the help. This is only the
beginning of the social entrepreneurship movement. Not only are businesses starting to
consider their impact on their environment, but also businesses are forming based solely
on the idea that they must strive to help others. The challenge is not in finding a cause,
but rather in gaining access to the capital and resources necessary to make a business
successful, and profitable. For some, this challenge was overcome, and their success is in
their story. In this document, we will explore more about the concepts of innovation and
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social entrepreneurship and its evolution, but also see some other types of nonprofit and
for-profits organizations, challenges that the industry of development cooperation is
facing, opinions and critics about social entrepreneurship, current trends and what are
doing the agencies in the field of development.
2. Concept of social innovation
What is social innovation? There are as much definitions as people that analyzed its
concept! Here is one of them: a new idea, product, service or model that simultaneously
meets social needs and creates new social relationships or collaborations. Social
innovations are not only important for the new specific solutions to societal needs, but
they can furthermore impact on society's capacity to innovate. We will later explore
different examples of social innovations and social entrepreneurship enterprises.

Interestingly enough, the success of several entrepreneurs shows us that there is a strong
connection between the concept of seeking for opportunities and creating innovation. In
the book of John Bessant, Innovation and Entrepreneurship (Page 6), we learn that
innovation is driven by the ability to see connections to spot opportunities and to take
advantage of them. The more we seek opportunities, the more we are aware of what the
market looks like, the more we find new contacts, share ideas and create innovation. This
definition of Mr. Bessant can also be applied to social entrepreneurship.

2.1 Paradigms in Development Cooperation

It might be interesting to take a look at the market of development cooperation, in which
social entrepreneurship is evolving. We can provide several different types of help when
it comes to development cooperation. Usually, the origin varies from public initiative to
markets. First, there is the Official Development Aid, involving institutions like OECD,
UN, World Bank, national administrations, bilateral aid agencies, etc. They mainly do
promotion and encourage economic development of developing countries. Trade and
investment is another paradigm in development cooperation that does not only include
importations and exportations, but also be made through foreign direct investment.
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Foreign Direct Investment is an amount of capital invested in the private sector of a
foreign country. An example of that could be an American multinational enterprise that
would create a subsidiary in China in the goal of taking advantage of a lower cost of
labour. A third paradigm is the emigrant remittances, which are an amount of money that
an emigrant (usually working in a developed country) sends to his family (generally
located in a developing country) in order to help them to afford basic needs. The numbers
are impressive: worldwide remittance flows are estimated to have exceeded $414 billion
in 2009, of which developing countries received $307 billion. More specifically, here is
a 2009 chart stating top 10 countries that received emigrant remittances, by percentages
of their GDP:

FIGURE 1: Top 10 recipients of migrant remittances


Figure 1. Top 10 recipients of migrant remittance. Adapted from the World Bank. Retrieved from
www.web.worldbank.org.

Then, the philanthropy is also a very traditional and popular way to contribute to
development cooperation; it is also sometimes call social investment. A good example of
philanthropy is the Bill and Melinda Gates Foundation, where millions of dollars are sent
every year to developing countries in order to improve health and poverty conditions.
There is also the Corporate Social Responsibility (CSR), which means how does a
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company includes the triple bottom line (economy, society and environment) in its
strategy in order to have a positive impact on society while growing and making profits.
These companies usually also have to take in account legal constraints, for example:
making sure they leave the land the way it was when they bought it, etc. The Bottom Of
the Pyramid (BOP) is another interesting paradigm, where we consider a poor person as
potential consumers. This theory might change the way we do development markets
because there are over 3 billion people living on less than 2.50 $ per day, which opens a
larger marker than traditionally. Different well-known companies have already adopted
this strategy, for example Danone, Unilever, etc. And finally, we have NGOs, also called
non-profits that are organization that financially depends on public funds and charity in
order to do projects for developing countries.

2.2 Social Entrepreneurship VS Other Paradigms

Even if all these different forms of aid had contributed to improve the conditions in poor
countries, we could do some critics about them, compared to social entrepreneurship. For
example, while today's companies engage in corporate social responsibility, they have
limited flexibility and are often unable to deliver high impact results. Also, corporate
social responsibility is a lot more accessible to big companies than SMEs. However,
large corporations primarily contribute by means of philanthropy as opposed to
sustainable business. Additionally, regarding our current model of philanthropy, while
having certain uses, has limited impact as compared to social entrepreneurship. And
finally, NGOs dont create value, they depend on help coming from public funds or
charity from private sectors, which can vary from a year to another. Social
entrepreneurship, on the other hand, have long lasting impact as they do not rely on a
donation model, but actually create their own revenue to sustain the business. Here is an
interesting chart that put in relation nonprofits and for-profits enterprises, which will be
explained later in this document.





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Figure 2: Profit and Non-Profit view of Social Entrepreneurs

Figure 2. Profit and Non-Profit view of Social Entrepreneurs. Adapted from Technology Innovation
Management Review by A. Saifan, February 2012.

2.3 Challenges in Social Entrepreneurship

When we work in social entrepreneurship, we meet a lot of challenges in every project.
As we have seen in the project cycle management, there are different steps to follow
when we do a project and they may involve challenges. First, it is difficult to know the
market or to have data about for whom the project is for; we call it a hidden population.
That is the case of drug addicts, sex workers, illegal immigrants, etc. Then, another
problem for social enterprises is that we also have to make sure the projects meet some
basic criteria as being effective and efficient, relevant, having an actual impact, etc.
During the implementation phase, a lot of external constraints are also generally met
when it is time to implement the project in a developing country: bad governance and
corruption, poor infrastructures, lack of help on site, etc. One the main challenges,
according to us, is to make sure the project that is done (or the enterprise that is created)
is sustainable. After the project has been implemented, the source of money stops coming
in, but the impact still needs to continue. Finally, another challenge that could meet social
entrepreneurship is the difficulty to evaluate and audit their impact. In fact, it is difficult
to measure qualitative data like when it comes to social issues.

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2.4 Negative critics for social entrepreneurship


While social entrepreneurship is a buzzword nowadays and a very popular concept that
people have a lot of faith in, it is not completely flawless. Mat Despard, teacher of
nonprofit management at School of Social Work at the University of South Carolina
(USA), raised few negative critiques about social entrepreneurship that could help us
pounder. According to him, social entrepreneurship would promote to elevate the
individual (the entrepreneur) more than the team behind him that worked hard to
implement the project. The second critic was that there is poor economy of scale,
generally because social entrepreneurs of often too young and not enough experimented.
This results in the need to raise unrestricted revenue to build infrastructure book
keeping/accounting, program evaluation, information systems, etc. albeit with poor
economies of scale. Energy and resources get diverted from problem solving to
organization building. The third critic is that, even if the social entrepreneurship
companies are very innovative, they are not recognized enough and their ideas are not
heard. He says: I hear about and interact with organizations in developing countries
with very innovative ideas that routinely go unheard. Another critic is that social
entrepreneur tends to lack of evidence to prove their ideas, as many of them are largely
untested. Its great that these ideas represent new approaches to tackling social
problems, but promotion of these ideas tends to be far out in advance of sufficient
evidence that they merit promotion as the next big thing. Having a commercial
assumption would be another critic we could say. According to Mr. Despard, a strong
bias exists in favor of commercial approaches to addressing social problems, but often
public or private subsidies are needed to catalyze change. The last critic raised by him is
that some social entrepreneurship project lack of ethical framework. Because of the
attention that a social entrepreneur would receive for his ideas, he might be seen as a
desired activity or way of being, not as a tool (among other tools such as political
advocacy and grassroots organizing) to be used to advance human rights. These critics
are a subjective opinion that might help us to ponder, but that still need to be put in
context and are not necessarily generalized in the social entrepreneurship field.

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3. Different Opinions in Social Entrepreneurship
3.1 For-Profit and Not-for-Profit: Two Masters?
Social enterprises could completely transform the way business transform the world.
Before social entrepreneurship, there were two types of enterprises: (1) for-profit
enterprises, in which the primary objective was to make a profit, and (2) not-for-profit
enterprises, in which the primary objective was to fill a social or environmental need.
Social entrepreneurship seeks to fit comfortably into both types. Social enterprises make
a profit and fill a social need, a double bottom line.

However, not everyone agrees on how to fulfill this goal. The existing system is designed
for the previously mentioned types of organizations. Questions arise. Should social
enterprises be classified as for-profit or not-for-profit organizations?

If social enterprises seek private or public ownership, they cannot file as nonprofits.
Nonprofits have no owners, and therefore, no shareholders. This means that all profits
must fund the mission. While this system can work well for charities, it interferes with
the social entrepreneurs goal to create a fundamentally beneficial organization that
generates profit. Further complications arise with the transparency required for not-for-
profits. Such transparency is not required for normal businesses and can lead to conflict.

An example of such conflict involves Kiva, a micro-lending website that encourages
individuals to lend small amounts of money to people who need it. According to the
Harvard Business Review, their advertisements create the illusion of person-to-person
giving, which fosters donation, even though the funding process is much more complex.
A normal business could be forgiven for such simplification, but nonprofits are held to a
higher standard of transparency, thus creating controversy. Kiva is willingly transparent,
but in this way threatens the very mission that it is trying to fulfill. Would Kiva and other
such enterprises have an easier time if they filed as for-profit companies?

On the other hand, for-profit social enterprises must play a careful balancing game.
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They have responsibilities to both shareholders and stakeholders and must be certain not
to shortchange either. This requires talent and commitment from the organizations
leaders, especially in times of controversy and change.

According to Nonprofit Quarterly, Some say the distinction between for-profit and
nonprofit is overrated. In other words, social enterprises could theoretically file as either
one and still serve their function. The article continues, However, when we look at the
issues of ownership, transparency, and profits, we see that the distinction between
nonprofit and for-profit is fraught with questions of democracy, responsibility, and the
highly subjective concept of social good. Those details (ownership, transparency, and
profits) immensely affect how an organization works, especially when it is still starting
out.

For these reasons, the way we see social enterprises may be changing. Instead of having
to choose whether to be considered nonprofit organizations or for-profit companies, some
have proposed a new legal form that more closely matches the dual goal of social
enterprises: Community Interest Companies (CIC). This would combine features of a
company with features of a charity.

3.2 Unclear Expectations for Transparency

Transparency means different things for nonprofit and for-profit organizations.
Businesses are generally required to post their financial statements, whereas nonprofits
must also make public information about exactly where donations go and other more
specific information. This makes a radical difference between nonprofit social enterprises
and for-profit social enterprise because public expectations radically change. However, as
social enterprises enter the picture, so do new expectations about transparency across the
board. The dualism that used to be seen in business types is replaced by a spectrum of
models, and the dualism that used to be seen in transparency expectations is replaced by
stronger expectations of transparency for every type of business model.

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According to the ASAE Center for Association Leadership, Transparency is being
hailed as the new competitive advantage, and "trustworthiness" is the new mantra for
leadership both in and out of the nonprofit sector. Therefore, it is becoming more and
more necessary that social entrepreneurs embrace this mindset. Where does this stronger
expectation come from? According to the article, technology. Technology in the form of
the Internet, social media, and organization websites, has both created the expectation
and also produced the tools to deliver greater organizational transparency. It makes
sense.

Organizations are jumping in. Buffer, a social media sharing company, has revealed its
pay structure, including the salary of its CEO, according to The Guardian. And Everlane,
a clothing vendor, includes precise details on its website, from which factories produced
which clothing to the waist size of the model and the size shirt shes wearing. This new
trend is likely to grow, instead of disappear, and it is in this environment that social
enterprises must develop.

The information that social enterprises share in order to be transparent will not always
help their image. In fact, it can threaten to destroy them. Kiva, a micro-lending
organization, has been attacked for misleading advertising. This attack is only possible
because Kiva proactively makes itself and its operations transparent. Over time, however,
Kiva saved its reputation and today continues its mission. Transparency requires
authenticity and willingness to respond. This will be a new valuable skill for all business
leaders, including social entrepreneurs.

3.3 Impact or Clever Marketing?
Social entrepreneurs face another challenge when developing and implementing their
social enterprises. First they must maintain a balance between service and profit, then
they must clearly transmit their deeds to the public, then they must monitor the way in
which they advertise.

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Monitoring advertisements is very important, especially for the reasons described with
Kiva. Managers must also remember their ethical responsibilities as leaders to fulfill their
missions without misleading or taking advantage. The Fair Trade label, for example, is an
attempt to alert consumers to products that humanely treated everything and everyone
involved in production. Many argue, however, that the increased price on these products
is unnecessary. If people are still willing to pay these prices, then companies can get
away with price increases, but they should carefully weigh all the implications.

Another point to note is that when discussing social enterprise, social entrepreneurs can
learn from both charitable and profitable organizations. Each of these models lends
experience that can help the social entrepreneur as this new sector further develops.

3.4 Naivety
Social entrepreneurship is not a new concept, but it has only become popular in the late
twentieth century. As a new type of organization in practice, this sector is especially
prone to certain types of naivety in regard to: current efforts, ethics, and public reception.

According to professor Neil Edgington, Too often aspiring (and usually young) social
entrepreneurs assume they need to start their own organization. This assumption comes
from two sources, which both include a lack of research. The first source of this
assumption is lack of knowledge of current projects. When a social entrepreneur comes
up with a mission, he often skips the step of seeking out other organizations that are
already serving the same mission. When he skips this step, he destroys opportunities to
partner with the existing organization and instead must spend precious donations or
investment capital on creating an entirely new organization. In this way, instead of
creating a large economy of scale, the mission is now scattered into many organizations
that are trying to serve the same people without streamlined operations.

The second source of this assumption is lack of research into proven methods. In the field
of social entrepreneurship, innovation is welcome. This innovation, however, should be
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carefully backed by previous research and planning. If not, the entrepreneur risks wasting
donors and investors money on a model that will not work.

A third assumption is not necessarily part of an entrepreneur's decision to begin a social
enterprise, but he should consider before beginning that one insufficient reason to start a
new organization is pride. Without proper research, planning, or commitment, an
entrepreneur can seek to build a social enterprise for self-serving reasons. This ultimately
causes the mission to suffer, and is not a sufficient reason to begin a project.

Social enterprises can also fall prey to naivety in regards to ethics. Because of social
media, big names in social enterprise can become very famous and highly praised. We
have previously discussed the ethical considerations of blending for-profit and nonprofit
business models. Now, however, let us consider the ethical implications of new social
enterprises. Like any new organization in a fragile environment, new social enterprises
can drastically throw off the current system balance. For example, Toms may supply
shoes to a community that needs them, but this could put the local shoemaker out of
business and unable to provide for his family. This is a consideration that the company
should take before flying into a new area.

In a similar vein, social entrepreneurs should not think of themselves as the cure for an
impoverished population. Ultimately, outside forces providing for a local community is
an unsustainable way to live. The best social enterprises are ones that empower the local
population to improve their own situation. A social enterprise should eventually be able
to hand off its work to the local people.

Finally, many social entrepreneurs can enter a naivety with public reception. Just because
they have good intentions does not mean that their work will be praised. People will
almost always be able to think of more direct ways to help somebody with their money,
and many people have not adjusted to the idea that a profit-making business can also help
people.

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If social entrepreneurs consider each of these points when planning their businesses or
organizations, they may be able to avoid much of the costly ignorance that can come
when a lot of passion for a cause is not matched by research.

4. Current Trend in the field of Innovation in Social Entrepreneurship
The concept of Social Entrepreneurship is not a famous idea, but it has recently
become famous amongst researchers and society. After the publication of the famous
read The Rise of Social Entrepreneur by Charles Leadbeater, activities related to
societal development falls under the category of Social Entrepreneurship. Even though
the term Social Entrepreneur is a modern term, the people who strived to transform the
society can find its rubric way back in the late 19th century. However, the current trend
focuses on socio-economic practices that balance earning profits and non-profit change
for the community.

4.1 Evolution of Social Entrepreneurship

Social Entrepreneurship is relatively a new term. It came into notice just few decades
ago. But its usage can be found throughout history. It is a result of a great contribution of
brilliant social workers that took the initiative to directly confront social needs through
their products and services rather than indirectly socially responsible business practices.
It all started in 1840, when the workers cooperation was set up in Kochdale to provide
high quality affordable foods in oppose to highly processed factory foods. There were
several social entrepreneurs whose main intention was to bring positive change in the
society. An online blog titled Management Study Guide (History of Social
Entrepreneurship) provides us with some examples of the social enterprise even before
the term was known. This includes Vinoba Bhave, the founder of Indias Land Gift
Movement, Robert Owen, the founder of the first nursing school and the developer of the
modern nursing practices. They had established such foundations and organizations in the
19th century that is much before the concept of Social Entrepreneurship used in
management. In addition, there are many societies and organizations that work towards
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empowering child rights, women equality, sustainable environment and proper disposal
of waste goods. Along with societal development, social entrepreneurs also work towards
addressing the environmental problems and financial issues for rural and urban poor.

4.2 Current Practices
Nowadays, the concept of social entrepreneurship has widely been used in different
forms. The initiation of Grameen Bank by Muhammad Yunus, Ashoka: The innovator for
the public by Bill Drayton has spread the meaning of the term. In fact, all the well-
established firms are adopting the concept of social entrepreneurship and trying to
improvise the issues and problems in the society they are operating in. They try to
address the social issues by opening school in the remote areas, educating women for
family planning, giving access to finance to farmers and poor with low interests and
encouraging sustainable environment by going green.

Like most other organizations, non-profit and social entrepreneurs are motivated to
innovate. They are considered as innovation-centric. Many social entrepreneurs are
utilizing a hybrid and sophisticated business model that combines revenue, borrowing
and donations. They make use of unique set of strategies that will lead to incremental
Social Innovation. Social innovation is taking a wider step in the world as people
realized the need to work together to find solution to ever-lasting list of problems. New
initiatives are launched all over the place whether by research institutes, companies or by
independent organizations. Those engaged in social innovation apply their own definition
of social innovation, but all definitions have one goal in common: working together
towards a sustainable society. Social innovation has an inter-sectorial approach and is
universally accepted. In addition, it focuses on new work and new forms of cooperation.

4.3 Role of Technology in Social Innovation

The birth of social entrepreneurship was sandwiched by the entry into modern society of
the mobile phone and the personal computer, the two invention that have revolutionized
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an individuals relationship with their devices. This has led to the current reality where
digital technology influences all aspects of our professional lives. As children of the same
era, it is not surprising that social innovation and technology are interacting with each
other in constant, often profound, and ever deeper ways. Technology is imperative to the
success of the social entrepreneur. Technology simplifies processes, allows access to
broad databases of resources, and even assists in reducing costs to the entrepreneur.
Technology can be used to promote the social enterprise at a reasonably low cost, and is
requisite in a society whose main medium of communication is through the web.

The path to innovate society is to find a necessary solution to many diverse issues.
Integrating these issues by promoting social infrastructure to sophisticated technology.
Hiroki Nakanishi, the president of Hitachi Ltd. (March 2013) highlighted that, the world
is issues such as chronic traffic congestion, environmental pollution, global warming and
depletion of energy resources. Hitachi is working towards to make business and life more
comfortable by enhancing social infrastructure through information technology. The
figure 3 below explains how can we make social innovation a reality through social
infrastructure and information technology.
FIGURE 3: Social Innovation Through Information Technology


Figure 3. Social Innovation Through Information Technology. Adapted from How Information Technology
Drives Social Innovation by Hitachi Data Systems and Hitachi, Ltd., March 2013.
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The Internet technology allows for the pooling of design resources using open source
principles. These media allow ideas to be heard by broader audiences, help networks and
investors to develop globally, and achieve their goals with little or no start-up capital.
The rise of open-source appropriate technology as a sustainable development paradigm
enables people all over the world to collaborate on solving local problems just as open
source software development leverages collaboration (Pearce, 2012). One of the best
example of the same could be about the US-based nonprofit Zidisha leverages the recent
spread of internet and mobile technologies in developing technologies to provide an
eBay-style micro-lending platform where disadvantaged individuals in developing
countries can interact directly with individual "peer-to-peer" lenders worldwide, sourcing
small business loans at lower cost than has ever before been possible in most developing
countries. Technology has just begun to integrate in the field on social innovation and
there is more scope for it to develop and assist in providing sustainable solutions to the
long-term social issues.

4.4 Social Enterprises and Innovators

They come from across the country, and serve a wide variety of communities. Some are
national organizations whose names are recognized; while others are smaller local
ventures. But they are all successful social enterprises. The following are some of the
social enterprises that exist in todays economy.

4.4.1 ASHOKA: I nnovators for the public formed by Bill Drayton

Bill Drayton founded the social enterprise named ASHOKA: The Innovators for the
Public in the year 1981. This organization is dedicated in finding the social entrepreneurs
in the world and giving them access to funds through its system of social venture capital.
This organization operates around 70 countries and support the network of 3000 social
entrepreneurs, some of which have gone on to develop leading social businesses that have
made a huge impact on communities around the world. Changemakers, Ashoka U, social
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venture, and full economic citizenship are some of the programs initiated by this social
enterprise.

4.4.2 Grameen Bank: Muhammad Yunus

Grameen Bank is a Nobel Prize winning micro-finance organization and community
development bank found in Bangladesh by the famous social innovator, Muhammad
Yunus. This bank provides micro-credit loans to those in need to help them develop
financial sufficiency. Founded in 1983, the bank has brought in a net income of more
than $10 million, and his work with his organization landed Yunus a Nobel Prize in 2006.
Besides micro-credit program, the organization also initiated Village Phone pragramme
(for women to provide wireless phone services in rural areas) and Struggling Members
programme (lending small loans to the beggars).

4.4.3 TOMS: Blake Mycoskie

TOMS is a company based in California, that operates a non-profit subsidiary, friends of
Toms. When TOMS sells a pair of shoes a pair of shoes is given to an impoverished
child, and when Toms sells a pair of eyewear, part of the profit is used to save or restore
the eyesight for people in developing countries. TOMS is also a very good example of
how technology can influence social innovation. Blake Mycoskie extensively used the
Internet in piloting TOMS shoes.

The above-mentioned social enterprises are few of the successful organizations, which
serve the needs for social change. There exists high number of similar organizations,
which are continuously dedicated in bringing improvements in the society. We perceive
that social change is taking place at a very slow pace with people still in poverty and
living without basic necessity; However, we should not forget that its a long term process
and someday this enterprises will reach their goal of making this world socially stable
and connected.

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5. Conclusion
The rise of technology and a new social mentality has created social enterprise, a new
form of organization somewhere between nonprofits and for-profits. Social enterprises
must face many challenges in starting up their organizations. Not only must they find
investors that do not mind a focus on social work or donors that do not mind a profit, but
they must also continuously reevaluate their efforts to fulfill their missions, transmit their
efforts clearly to the public, and answer all the criticisms that will come their way.

Some successful examples of social enterprises include ASHOKA, Grameen Bank, and
TOMS, but these organizations have thrived in spite of criticism and challenges. Social
enterprises must research current needs, efforts, and successful methods. With proper,
careful balancing of profit and purpose, social enterprises can do a lot of good and may
become a sharpened tool good for the reformation of broken, forgotton parts of society
and the world.




























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