The tough economy brings out two strong desires in potential entrepreneurs – to take control of their own future and to make a difference in the world around them. Social entrepreneurship is the new term to define this professional path. In some circles, social entrepreneurs are limited to those who launch nonprofit organizations only, but the changes afoot in society are broadening the definition. Now, social entrepreneurs include any innovative, independent business owner who uses entrepreneurial skills to contribute to the betterment of society.
The toughest part of joining the ranks of social entrepreneurs is deciding exactly what route works best for you and your situation. Launching a nonprofit is still presumed to be the most selfless, truly philanthropic way to give back, and launching a for-profit venture is still sometimes viewed as less likely to make a real difference. Hopefully, these attitudes will begin to change as more dedicated individuals make their choice for the right reasons. That is, the right choice depends on a number of factors, but neither option is inherently better than the other in terms of the contributions you can make to the world at large.
Launching a nonprofit organization is no cake walk. First, your organization must have a relatively narrow purpose that serves a very specific population to be effective. Second, you are relying on the willingness of individuals and grantmakers, for the most part, to fund a good portion of your efforts. The work you put in to developing and growing a legitimate nonprofit is certainly not any easier or less stressful than launching a for-profit, in fact typically requires an even stronger dedication to the venture. And, changing direction in terms of what the organization does or the purpose it serves, is quite difficult and requires approval of the board as well as significant paperwork and effort to retain the all-important 501 (c) (3) status.
There is little to no personal benefit in working on a nonprofit except, of course, the satisfaction of sacrificing yourself for the cause. You will not retain ownership of the organization to any realistic extent. By definition, nonprofit organizations are owned by the public, and in order to qualify for the larger grants and contributions, your organization will have to display a clear separation between the individuals involved in the venture and how the money is handled.
On the other hand, nonprofit organizations are at the forefront of making an actual difference. Whether your beloved cause is in health issues, poverty and homelessness, animal care, or even youth sports, running a nonprofit puts you in constant, close contact with the population you serve. You will not likely grow any personal wealth from the work, but you might be able to grow the organization enough to support a reasonable salary as the executive director. While the executive director still answers to the board, they tend to wield sufficient power within nonprofits to keep the efforts focused on the priority the organization started with.
Starting a for-profit business with a social focus offers a best-of-both-worlds situation. You are less limited on what the venture actually does, and in fact can change direction at any time, for any reason, without fighting for approval from a board. In addition, it is up to you how much, or even whether, you contribute and you can change the amount or the benefactor at any time. If you disagree with how a certain nonprofit is handling their funds, you can pull your contributions and find a group doing a better job of taking care of their target population. And, you can spread your contributions among any number of causes that are important to you, rather than dedicating all of your time, effort, and cash to a single issue.
Most importantly for most entrepreneurs, owning a for-profit business allows you to take care of your own financial needs in concert with helping others. The past ideas of finding glory in being broke are tired – there is nothing wrong with making you and your family secure, as long as you are alert to the responsibilities you have to the rest of society. Owning your own business gives you the flexibility and opportunity to do both, at whatever balance works for you.
Social entrepreneurship is the wave of the future. Whether you are totally committed to a single cause and wish to apply entrepreneurial skills to developing a high-impact nonprofit or have a great for-profit business idea, it is the obligation of the new generation of entrepreneurs to help out. Deciding the best route for you depends on your own situation and priority, and how you want to spend your days. But in either case, there is plenty of opportunity to take control of your worklife while giving back to the community.