The Search for Social Entrepreneurship

306 Pages·2008·1.044 MB·English

by  Paul Charles Light

search
The for
social
entrepreneurship
The SEARCH for
SOCIAL
ENTREPRENEURSHIP
SEARCH
The for
SOCIAL
ENTREPRENEURSHIP
PAUL C. LIGHT
BROOKINGS INSTITUTION PRESS
Washington,D.C.
ABOUT BROOKINGS
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Copyright © 2008
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Library of Congress Cataloging-in-Publication data
Light, Paul Charles.
The search for social entrepreneurship / Paul C. Light.
p. cm.
Includes bibliographical references and index.
Summary: “Outlines the debate on how to define social entrepreneurship, examining
the four main components of social entrepreneurship: ideas, opportunities, organizations,
and the entrepreneurs. Presents research on high-performing nonprofits, exploring how
they differ across the four key components. Offers recommendations for future action and
research in this burgeoning field”—Provided by publisher.
ISBN 978-0-8157-5210-3 (cloth : alk. paper) — ISBN 978-0-8157-5211-0 (pbk. : alk.
paper)
1. Social entrepreneurship. 2. Nonprofit organizations—Management. I. Title.
HD60.L544 2008
658'.048—dc22 2008025541
9 8 7 6 5 4 3 2 1
The paper used in this publication meets minimum requirements of the American
National Standard for Information Sciences—Permanence of Paper for
Printed Library Materials: ANSI Z39.48-1992.
Typeset in Sabon with Myriad display
Composition by Cynthia Stock
Silver Spring, Maryland
Printed by R. R. Donnelley
Harrisonburg, Virginia
CONTENTS
Preface vii
Acknowledgments xiii
1 Declaring Assumptions 1
2 Building Sites 30
3 Creating Strategies 52
4 Exploring the Evidence 88
5 Selecting Cases 144
6 Comparing Activity 169
7 Drawing Conclusions 196
v
vi CONTENTS
Appendixes
A
Mission and Purpose Statements from the
Sample of Highly, Moderately, and Not-Too
Entrepreneurial Social Benefit Organizations 219
B
The 2006 Survey Questionnaire and
Responses 239
C
Differences between Highly and Not-Too
Entrepreneurial Organizations in the 2001
and 2006 Surveys 259
References 265
Further Reading 277
Index 283
PREFACE
R
esearch on social entrepreneurship is finally catching up to its poten-
tial for supporting socially entrepreneurial activity in society as a whole.
Drawn by increasing financial support and public interest, researchers
are laying the foundation for a distinctive field of inquiry.
The increased research activity can be seen in a number of indicators,
including the number of recent articles cited in the references at the end
of this book. Many schools of business and public affairs have launched
new training programs for nascent social entrepreneurs, which in turn
have created demand for teaching cases and curriculum and which in
turn again have created demand for rigorous research.
This demand curve is already producing results. Major journals have
started to feature occasional articles and special issues on social entre-
preneurship, the Stanford Social Innovation Review remains a faithful
outlet for applied research, and three new volumes of research studies
and cases have been released in the past year, one edited by Alex Nicholls
of Oxford University’s Saïd Business School; a second by Jane Wei-
Skillern, James E. Austin, Herman Leonard, and Howard Stevenson of
the Harvard Business School; and a third by Johanna Mair, Jeffrey
Robinson, and Kai Hockerts of the IESE Business School at the Univer-
sity of Navarra.
The demand curve is also creating long needed dialogue about research
opportunities and assumptions, some at star-studded conferences, some
vii
viii PREFACE
on interactive Internet platforms, and some in more intimate venues as
researchers and entrepreneurs meet one on one. The curve is also driving
the expansion of traditional research outlets, for example, the Social Sci-
ence Research Network, which is now organizing and searching the
growing inventory of social entrepreneurship research using a new tax-
onomy designed by Susan Davis of Ashoka.
This momentum is creating a fertile environment for attracting faculty
to the study of social entrepreneurship, which Johanna Mair and Ignasi
Martí described in 2006 as a “source of explanation, prediction, and
delight.” As the infrastructure of social entrepreneurship grows, so does
the demand for applied research. It is a magnetic effect that often shapes
a field of research—if you pick a compelling question and provide rea-
sonable support, the researchers will come.
There are other reasons for the recent spike in research, not the least
of which is the remarkable publicity surrounding Muhammad Yunus,
who won the 2007 Nobel Peace Prize for his work with the Grameen
Bank, one of the most studied and admired socially entrepreneurial
efforts in the world. The spike is also driven by the exponential growth
in the number of cases for study and the basic excitement surrounding
the notion that intractable problems such as poverty, hunger, and disease
can actually be solved. “On the most basic level,” Roger Martin and
Sally Osberg wrote in 2007, “there’s something inherently interesting
and appealing about entrepreneurs and the stories of why and how they
do what they do.”
Yet, as Martin and Osberg continue, “interest in social entrepreneur-
ship transcends the phenomenon of popularity and fascination with peo-
ple. Social entrepreneurship signals the imperative to drive social change,
and it is that potential payoff, with its lasting, transformative benefit to
society, that sets the field and its practitioners apart.” The same might be
said for researchers who study social benefit organizations,the term I use
in this book as a substitute for nonprofits out of respect for Bill Dray-
ton’s plea that researchers stop using “non” terms in the field. As he
wrote in 2007, “You cannot describe half of the world’s operations by
what they are not.”1
The rest of this book will explore the recent spike in more detail, start-
ing with what I believe to be a healthy debate about the definition of social
entrepreneurship and ending with a discussion of a research project
1. Drayton (2007, p. 5)
PREFACE ix
designed to compare the characteristics of high-performing social bene-
fit organizations engaged in socially innovative activity with their less
socially innovative high-performing peers. Drawing upon lessons learned
from the literatures on business and social entrepreneurship as well as a
survey of 131 highly, moderately, and not-too entrepreneurial social ben-
efit organizations, this book is divided into seven chapters. (I use the
term not-too entrepreneurialthroughout this book out of respect for the
high-performing organizations that focus most of their energies on deliv-
ery of basic services.)
The first chapter examines the current debate about the basic definition
of social entrepreneurship. Given the growing convergence about the goals
of socially entrepreneurial activity, this chapter discusses the need for
greater clarity about the underlying assumptions that shape the dialogues
about who becomes a social entrepreneur, what constitutes a socially
entrepreneurial idea, when socially entrepreneurial opportunities arise,
and where socially entrepreneurial activity occurs. Greater transparency
of these underlying assumptions is essential if we are to advance efforts to
distinguish social entrepreneurship from other forms of social action.
The second chapter compares new and existing organizations as
launch sites for socially entrepreneurial activity. The prevailing wisdom
in business and social entrepreneurship suggests that new, small organi-
zations are the best location for changing the social equilibrium. How-
ever, there is also growing evidence that old, large organizations can be
just as successful in developing new ideas as their younger peers. The
growing research base on corporate entrepreneurship also suggests that
the development of new ideas need not occupy the entire organization.
The key to success is not the size or age of the organization so much as
the underlying culture needed for imagination.
The third chapter explores strategies for linking the four components
of social entrepreneurship: entrepreneurs, ideas, opportunities, and
organizations. The chapter introduces the notion that these components
can be treated as separate, yet interactive, components of social entre-
preneurship. It then turns to the search for strategies that might increase
the chances that these components will succeed. As the literatures on
business and social entrepreneurship suggest, there is very little hard
research that shows a clear path through the ecosystem that surrounds
these four components.
The fourth chapter examines these two literatures in search of evidence
on the basic assumptions that should guide future research. Although the
x PREFACE
knowledge base is relatively young, recent years have produced dozens of
new insights on how entrepreneurs think and behave, why some ideas
succeed when others fail, when opportunities open and close, and how
organizations shape entrepreneurial success. To the extent possible, I
focused my search on the period 2005 to 2008, which produced more
than a third of the 230 articles and handful of books that formed the
basis of my literature review, several of which involve studies of studies.
All counted, this book is based on more than 500 studies. Scholars might
call this a very informal meta-analysis in which a large body of research
is distilled to its core findings.
The fifth chapter introduces my 2006 survey of socially entrepreneur-
ial organizations. The first step in comparing highly, moderately, and
not-too entrepreneurial organizations is to translate abstract definitions
and assumptions into a usable framework for actually assigning organi-
zations to categories. Because this process is highly subjective, readers
are warned to consider the coding process as an illustrative approach for
building larger samples of organizations for deeper statistical analysis.
Even accepting the caveats, however, the chapter suggests that there may
be more socially entrepreneurial activity in the social benefit sector than
previously suggested.
The sixth chapter presents the results of my 2006 survey. In present-
ing the similarities and differences among the 131 highly, moderately,
and not-too entrepreneurial organizations in my sample, the chapter asks
how these organizations differ across the four components of social
entrepreneurship. As the analysis suggests, highly entrepreneurial organ-
izations are more alike than different from their less entrepreneurial
peers—they have many of the attributes of high-performing organiza-
tions, as well as occasional vulnerabilities that perhaps are due to their
lack of access to unrestricted revenue. Their great strength is their com-
mitment to their vision, which is manifested at the very top of the organ-
ization in the continued involvement of their founders and is driven
down through the organization. This strength also creates potential vul-
nerabilities as the highly entrepreneurial organizations occasionally
ignore tools that might strengthen their organizations. Appendix C pro-
vides a comparison of the key trends, significant and suggestive, between
the survey in 2006 and its predecessor in 2001.
The seventh and final chapter of this book offers an overview of this
study and recommendations for future action. The chapter also asks how
the study affects the underlying assumptions embedded in the definition