The social enterpreneurs controversy

Cause Global reports on the charge of elitism against social enterprise funding and control.


“There’s a growing debate in the social enterprise world, not only about who’s a social entrepreneur but about who’s being left out of the club.

True, the exceptions and misconceptions abound, but the debate settles around two main points — that unless you’re a Caucasian and unless you’re an MBA, it’s tougher to get support for your good work trying to start a social enterprise.

Is that fair? Consider the arguments. The first point being raised by some across the sector is that MBAs seem to be preferred by social ventures and the foundations willing to fund aspiring social entrepreneurs. Employers, the argument goes, also seem to prefer MBAs, but the truth is that not everyone who can make a difference or start a social enterprise can afford business school—nor think they should have to get an MBA in order to get funding to develop their ideas. “I have no MBA nor do I want one,” says Martin Montero, the founder of Austin Social Innovation Fund. Montero tweeted me the other day in response to one of my queries about a story in today’s Wall Street Journal Online that cites the surge of interest by business school students in “socially-responsible money-making.” The article also notes how business schools are being pushed to create a whole host of courses and study tracks to help MBA students sort out the best way to build companies that both make money and help to solve social problems. Montero and others, including a number of Justmeans community members who messaged me earlier this week, said the fuss over socially-minded MBAs tends to leave out a great deal of people who are not in business school but who already have been making a big difference in the sector. ” We most definitely need more non-MBA social entrepreneurs,” Montero wrote.

A second point I keep hearing is that the developing world is, more or less, being left out of the conversation. community member Gerard Ww, in a comment responding to my introductory column as social enterprise editor of Justmeans, said that “no company, organization, or individuals (seems) willing to really get their hands truly dirty side-by-side with us (those people at the bottom of the pyramid) while trying to help the BoP!” Describing himself as one of the billions at the bottom of the pyramid, he said that “we are never included in the [potential] interventions; it’s always the so-called academics and ‘successful’ business persons who dictate terms and conditions. Too few of us will ever be helped by the continued exclusion, but who else knows the conditions [at the bottom of the pyramid] better” than the people who live there?”

2 Comments The social enterpreneurs controversy

  1. AvatarAbhay Agarwal

    Based on my analysis of the situation, this can be attributed to an understanding within MBA candidates that traditional value chains and business models do not ‘sell’ anymore. With social enterprises portrayed as the new light at the end of the tunnel, this leaves them with little option but to pursue these programs, without the proper knowledge of what it means to be a struggling citizen of the developing world.

    Since most social enterprises are targeting the developing world (either products or services), i think it would be excellent to require social enterprise business school candidates to have real world development experience first. I am calling for a greater integration between students of the fields of development (public health, international development, economic development) with students attemtping to create social enterprises. Extended MBA programs such a 1+1 year studying development or sustainability combined with a year of studying the business side of social enterprises is an ideal solution.

  2. AvatarStan R

    A very poignant article. I’ve been detecting a lot of ripples along these lines. Along with Abhay Agarwal’s observation about what sells, I’m also skeptical that all the money flowing into ventures would still be there for actual BoP. Investors, even with good intentions, are more likely to be trusting similar “elite.” And, many MBAs probably believe their quasi-business acumen can help save the world, and may talk a good game. However, they do not spend enough time learning about actual subjects and building the domain knowledge needed to help see good solutions in a particular domain. They also do not understand or plan for the massive information loss that comes from top-down solutions. They also don’t tend to see that what their company does–or whether their company even survives–is not as important and empowering the BoP to solve problems. It’s just not the mindset taught in an MBA program, as near as I can tell. I’m speculating based on a handful of MBAs I’ve talked to, and curriculums I’ve peeked at. The focus should not be building businesses, the focus should be enabling BoP to solve problems, and assisting them in doing so where and how needed.

    There’s another side to the “social enterprise” coin. In the United States, plenty of people are claiming to be social entrepreneurs or have social enterprises with no evidence or action to support that claim. However, no one questions it–that would be impolite. It’s not that all these people are scam artists (some are), it’s just that they find it’s easy to “fudge” it a little.

    It’s essentially no different than “greenwashing,” where one claims to be green, or “fair trade,” or some other buzz term that has a slight ring of enviro-social justice. Consumers turn their brains off when seeing these terms, and indeed, they don’t have time to investigate each and every one. It’s no surprise that so many businesses and starting businesses are getting into the action. We should expect this. In a world of competing businesses, businesses gaining an edge by being perceived in a good light–while not changing their bottom line–will out compete businesses that don’t have that edge, everything else equal.

    I have still not seen a solid set of principles for social entrepreneurship. The SEA in the US defines a social enterprise as “an organization or venture that advances its primary social or environmental mission using business methods.” That carries no weight at all.

    There need to be a tangible principles to actually classify social enterprise, and they most likely need to be written right into the operating agreement, and be actively open with information from the start (“you can check our records if you want” is not good enough.) That may be a really high bar, but honestly, the bar needs to be high, because the term “social enterprise” is becoming increasingly meaningless. Once principles are made by a few brave adopters, I hope we will see something roughly like bringing transparency to companies claiming social enterprise status. It could be a social enterprise in itself. Easier said than done…

Leave A Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.