By guest blogger Jim Schorr, professor for the practice of business & society, Vanderbilt University
Since the late 20th century, a new breed of organization has been emerging to tackle social and environmental problems that have been inadequately addressed by traditional nonprofit and government approaches. Like nonprofits, these organizations revolve around a social mission. But they differ from traditional nonprofits in their use of business approaches to advance their missions. These organizations have come to be known as “social enterprises,” reflecting their hybrid approach.
The promise and potential of social enterprises is compelling: efficient, effective and sustainable models for dealing with critical social issues. Social enterprises often are efficient and effective because their business models subject them to the discipline that comes with a market orientation. They have the potential to be financially sustainable because they can self-generate most or all of the income they need to cover their costs, and are thus much less reliant on philanthropy and government support.
Today, social enterprise is both a global movement and growing local phenomenon: In developing countries, microfinance has evolved from the notion of Muhammad Yunus, a Vanderbilt Ph.D. student in the 1970s, to a full-blown industry sector that has successfully provided an estimated $25 billion in small loans that have empowered more than 1 billion of the world’s poorest people. Dr. Yunus and his Grameen Bank received the Nobel Peace Prize in 2006 for pioneering this field.
Locally, the ecosystem for developing social enterprises is encouraging as well: With a variety of established and emerging models such as Thistle Farms and Nashville Mobile Market, academic offerings at Vanderbilt and Belmont, new resources like the Entrepreneur Center and a Social Enterprise Alliance chapter, and growing interest among key funders and investors, the future looks bright for social enterprise in Nashville.
The Nashville Area Chamber of Commerce and the Entrepreneur Center have identified social enterprise as a specific category in which to recognize excellence in entrepreneurship. Visit http://NEXTNashville.com
to see criteria, nominate a worthy company or entrepreneur or apply. Deadline is July 31.