Challenges Facing Social Entrepreneurs

Social entrepreneurs have been around for many years, but the explosion in global connectivity and intense
competition for philanthropic funds seems to have propelled the sector into a more central position in the
business world. The essential difference between social enterprises and traditional businesses is that the
mission is central to the business of a social enterprise, and income generation takes an important, but
secondary, supportive role. The social entrepreneur seeks to implement innovative and creative ideas to solve
large-scale social problems in a sustainable way. A social enterprise faces the same issues that any traditional
business faces in its growth and operations. But social entrepreneurs also face unique challenges in delivering
the social value, social returns or social impact of the enterprise in addition to commercial value.
1. Funding
Social enterprises can be run as for-profit or non-profit and sit somewhere in the middle
of the traditional corporation and a purely charitable organization. Some organizations
are able to generate sufficient income through the sale of socially beneficial goods or
services, but many are not. Other funding opportunities include corporate investment,
donations and government funding. Approaching investors may not be easy, however,
if the organization is perceived as more non-profit than profit-oriented and not likely to
make a reasonable return for investors. On the other hand, many donors are distrustful
of a social enterprise being run as a for-profit company where too much focus may be
placed on wealth generation and too little on social value.
2. Communicating Value Objectively
The social enterprise delivers more than commercial value, and it is the additional social
value that often ignites the passion of the social entrepreneur. This in combination with
the fact that social value is not easily measured can make it difficult to communicate
the bottom line to investors, donors or the community at large. It is important to stay
objective to remain convincing, and to make the right decisions in moving the enterprise
toward its goals.
3. Strategy and Long-Term Focus
It is important to any business to identify a long-term strategy, define appropriate goals
and drive growth in a sustainable manner. Difficulties for social enterprises again stem
from the fact that the purpose of the organization is to create social benefits. It is often
the case that multiple social benefits can mean multiple goals, all of which must be
evaluated in terms of cost of provision to ensure true value creation. A strong strategy
will identify a unique value proposition compared to other organizations and indicate
clearly what the organization will not do. Activities of the social enterprise should work
together and reinforce each other.
4. Remaining True to the Mission
Establishing a good strategy for the social enterprise will help to mitigate the possibility
of mission creep. It is often easier to fight fires and not focus on the long-term goals of
the organization, but this could result in an undesirable shift in the social value
provided. A successful organization will continuously review strategy and work to
improve it, but changes in the mission can cause confusion and dilute the organization's
impact.
5. Lack of skilled work force and challenge of talent retention:
 It is easy for every social entrepreneur to find volunteers. The challenge is to have
volunteers who are really talented in what they are expected to do. For example, if a
social enterprise wants to go and teach computers in an orphanage, there is no use of
100 volunteers if they themselves are not fluent with computers. Talented man force is
a major concern for most social enterprises. There is a requirement of dedicated,
hardworking, committed people who understand the ideologies and social mission of
the enterprise. Generally, there is very little training required working in a social
enterprise, hence it is important that the enterprise takes the initiative to train their
volunteers because only then can get the best out of them. Further not only talent
acquisition poses a challenge to social enterprises, but talent retention is yet another
major challenge
6. Lack of Structure
Appropriate organizational structure is very important for an organization to get the
best out of its employees. It is even more important in a social enterprise because there
is no way to measure the productivity of any employee. Employee productivity can
only be felt by their colleagues. Hence to get the best out of any team it is important to
have proper structure in the team. The hierarchy of order must be maintained in a social
enterprise as much as it needs to be maintained in any for profit organization
7. Lack of Education in Entrepreneurship
Entrepreneurship in India is still encumbered by the traditional educational system of the
country. As education is the main source for promoting entrepreneurship in the business
sector of the economy, there is still a lack of specific curriculum on entrepreneurship
development in the Indian education system. Due to the increasing demand of this sector,
currently, the entrepreneurship education is a “new cup of tea” limited to graduates of
business schools and management institutes, whereas for other streams of education like the
sciences and arts there is not a single course on entrepreneurship in the curriculum. Due to
this gap in the Indian education system the country’s entrepreneurial sector is still
underdeveloped and struggling. Even business schools that have developed curriculum on
entrepreneurship are lacking in terms of social entrepreneurship. This lack of social
entrepreneurship knowledge presents a major challenge for social enterprises in finding
competent and skilled promoters
8. Social and Cultural Effect
In India, the social and cultural perception of social entrepreneurship sometimes becomes a
challenge for social entrepreneurs in running their business activities. As in the case of Water
Health International, the major focus of this social venture was to awaken the people about
various water diseases and how they can be cured, but people were still sceptical about how,
and why, WHI is providing the purified water at such a low cost. This impression shows the
lack of knowledge or foresightedness of the local community in distinguishing a social business
from a normal profit‐driven business.
9. Lack of Government support
Lack of government support is a major hindrance for social business development in India.
Currently, the government is not providing any kind of assistance for promoting these social
cause ventures. The government’s policies and regulations for social entrepreneurs are very
complex and strict, with no tax incentives or subsidies being provided for a social business,
the combination of which acts as major impediment to the growth of social businesses in India