Entrepreneurial Opportunity inSocialPurpose BusinessVentures

Chaptersubmittedforpublicationin:HandbookofResearchinSocialEntrepreneurship. Eds.JohannaMair,JeffRobertson,andKaiHockerts,Palgrave,forthcoming2006.

ENTREPRENEURIAL OPPORTUNITYIN SOCIAL PURPOSEBUSINESSVENTURES

KaiHockerts

AssociateProfessor,CopenhagenBusinessSchool,CenterforCorporateValues andResponsibility,DK2000Frederiksberg(Denmark),Tel:+4538153175, http://web.cbs.dk/centres/cvr/,kho.ikl@cbs.dk

Entrepreneurial Opportunity inSocialPurpose BusinessVentures

ENTREPRENEURIAL OPPORTUNITYIN SOCIAL PURPOSEBUSINESSVENTURES

Literatureonsocialentrepreneurshipembracesanexceedinglybroadrangeoftopics.Itcovers individual,organizational,aswellasinterorganizationallevel phenomena(Bornstein,1996 Boschee,1995Brinckerhoff,2000Dees,Emerson,&Economy,2001aDrayton,2002 Emerson,2003Johnson,2002Leadbeater,1997Mair&Marti,2004).Thispaperfocuses ontheorganizationallevelphenomenonofsocialenterprises.However,eventhistermleaves ampleroomforambiguity. Scholarshaveusedtheexpressiontodescribe aspecificownershipstructure cooperativesandothermutuallyownedorganizations (suchasproducerorconsumercooperatives)areoftenreferredtoassocialenterprises, fundraisingventuressubsidiariesofnonprofitorganizations,whoseonlypurposeis toraisefundsfortheprincipalcharitableobjective(suchasinthecaseoftheWWF merchandisingarm),canalsobeconsideredsocialenterprises (Dees,1998aFowler, 2000), socialpurposebusinessventuresafinal variety ofsocialenterpriserefersto forprofitbusinesses(suchasinthecaseofmanyfairtradecompanies)whosemain purposeofexistenceistocreate (external)socialbenefits.(Campbell,1998Foryt, 2002Hockerts,2003Larson,2000Mair&Noboa,2003aSchaltegger,2002 Volery,2002)

Entrepreneurial Opportunity inSocialPurpose BusinessVentures

Scholarsmayfindthesourcesofentrepreneurialopportunity thatIsuggestbelow tobeof relevancetocooperativesandfundraisingventuresaswell.However,inthispaperIam principallyinterestedinthethirdtypeofsocialenterprisethesocialpurposebusiness venture(SPBV). Theexistenceof SPBVsispuzzlingfromapurelyeconomicpointofview. Socialpurposebusinessventurespurporttoexistprimarilytocreateapublicgood.However, whilethebenefitstheycreatearepublictheyarenonethelessincurringprivatecosts.Howcan theymanagetodoso?Puttingsocialwelfarefirstandstill beingaprofitablebusinessiscoun terintuitive.Managementresearchhasnotheoreticalexplanationforthesephenomena,nor doesitofferguidanceforsocialentrepreneurswhoneedtonavigatethefaultlinedelineating forprofitstrategiesfromthedomainofpublicandnonprofitmanagement. InthispaperIwilloutlineaconceptualframeworkfor thesourcesofentrepreneurial opportunityforsocialpurposebusinessventures.FirstI reviewbrieflytheextantliteratureon socialentrepreneurship.NextIdevelopaconceptualframeworkforsocialentrepreneurship identifyingthreetypesofsocialentrepreneurialopportunity.

SocialEntrepreneurshipasaNewOrganizationalConstruct Thetermsocialentrepreneurshiphasemergedfrompracticeratherthanacademicdebate. Accordingly,eventoday thedefinitionofsocialentrepreneurshipremainsquitefuzzy,as remarkedonbyForyt:

'SocialEntrepreneurship'isabroadtermthatdoesnothave awidelyacceptedprecisedefini tion.Inpractice,itisusedtodescribeeverythingfromrevolutionaryleadersinthirdworld countrieswhoarenotatallinvolvedinbusinesstofirstworldbusinessmenandwomenwho

Entrepreneurial Opportunity inSocialPurpose BusinessVentures

startasociallyresponsiblebusinessintheirhomecountry.ThusMahatmaGandhiandBen CohenofBen&Jerry'scouldbethrownintothesamecategory.(Foryt,2002:1)

Althoughthemotivationtobuildaviablebusinesscanbepartofsocialentrepreneurship, manyauthorsdonotthinkthistobeanecessarycondition.Social entrepreneurscanthusbe communityleaders,activistsinnonprofitgroups,orgovernmentalemployeesthatidentify andimplementanykindofinnovationthatfurtherssocialwellbeing.Theterm social entrepreneurship emergedinthelate1990sintheU.S. (Bornstein,1998Boschee,1995 Brinckerhoff,2000Dees,1998a,bDees,Emerson,&Economy,2001aDrayton,2002 Henton,Melville,&Walesh,1997),andin theUK(Leadbeater,1997SSE,2002Warwick, 1997Zadek&Thake,1997).However,asMairandMarti (2004)emphasize,examplesfor socialentrepreneurshipcanbefoundaroundtheglobe. Thedefinitionsforsocialentrepreneurshipemergingfromtheliteratureareverydisparate.At theindividuallevelsocialentrepreneurshipfocusesonpersonsdrivingsocialchangeand innovation.Thesesocialorcivicentrepreneurscanbeindividualcitizens,communityacti vists(Hentonetal.,1997Leadbeater,1997Swamy,1990Thompson,Alvy,&Lees,2000) orcivilservants(James,2001Leadbeater,2000) whouseentrepreneurialspiritinorderto reachsocialobjectives.Bornsteindefinesasocialentrepreneurasapathbreakerwitha powerfulnewidea,whocombinesvisionaryandrealworldproblemsolvingcreativity,who hasastrongethical fiberandwhoistotallypossessedbyhisorhervisionforchange. (Bornstein,1998:36)MairandNoboa(2003b)identifyempathy,moral judgment,self efficacy,andsocialsupportasthekeyaspectsthatdistinguishsocialentrepreneurs. Attheorganizationallevel socialentrepreneurshipisconceptualizedinthreedifferentways. Afirstperspectivecouldbydescribedascommercializinganonprofitorganization.Ines sencethisviewofsocialentrepreneurshipbringsaforprofit philosophytothemany

Entrepreneurial Opportunity inSocialPurpose BusinessVentures

nonprofitsthatexperiencedafinancialcrunchinthe1980sastheyfounditmoreandmore difficulttofinancetheirworkthroughdonationsandgrants.Boschee(1995:21) reportsthat, whilenonprofitshad27%oftheirannualoperatingfundsinreservein1977,thisproportion hadfallentojust1.4%bythemid1990s.Bygoingatleastpartly forprofit some organizationshavestartedtosellwhattheyusedtogiveawayforfreeinordertoraise alternativeincome.Manynonprofitsremainfearfulofcommercialoperationsundercutting theirsocialmission (Dees,1998aFowler,2000).However,aviablebusinesscanoftenbethe bestoptiontogenerateadependableincometopayforcharitableactions(Grimm,2000). Amoreupbeatinterpretationofsocialentrepreneurshipinnonprofitorganizationsisthe notionthatagooddoseofmarketorientationwillhelpsocialorganizationstodelivermore socialvalueforthemoneytheyspend.Byapplyingsuccessfulbusinesspractices(i.e.by focusingonthemosteffectiveprogramsandusingstrategicplanningandcontrol mechanisms)nonprofitorganizationscanincreasetheirefficiencyandthushaveahigher impactwithagivenbudget(Boschee,1995Dees,1998aDeesetal.,2001a,bDrucker, 1989Sagawa&Segal,2000SSE,2002Warwick,1997Zietlow,2001).Thisapproachof bringingbusinessexpertiseandmarketbasedskillstothenonprofitsector (Johnson,2000: 6)canbebestsummarizedasefficientnonprofitmanagement. Thereisalsoaresearchtraditiontolinkaspecificownershipstructuretosocialenterprises. Cooperativesandothermutuallyownedorganizationsareoftenreferredtoassocial enterprisesbycertainscholars Afourth viewattheorganizationallevelfoundinliteratureisthatofsocialentrepreneurship associalpurposebusinessventures(Campbell,1998Foryt,2002Hockerts,2003Larson, 2000Mair&Noboa,2003aSchaltegger,2002Volery,2002)Inthiscaseanemerging socialinnovationisseenasabusinessopportunityandturnedintoacommercialforprofit
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Entrepreneurial Opportunity inSocialPurpose BusinessVentures

businesscreating,intheprocess,newmarketspacewhilealsoattainingasocialobjective. TypicalexampleswouldbeTheBodyShoporWholeFoodsMarket. Atthesocietallevelsocialentrepreneurshipisoftenunderstoodasnetworksforsocial entrepreneursandventurephilanthropy.Inthiscaseinformationandpracticalsupport,as wellascharitabledonationsorequitycapital,aremadeavailabletoentrepreneurial individualsandorganizationsthathaveaclearsocialmissionandrequireatargetedamountof fundstorealizeit(Christopher,2000EMFK,2002JoshuaVenture,2002Orloff,2002).A typicalexampleistheAshokaFellowprogram thathasnetworkedover1200recipients worldwidewhoareworkingonradicalsocialinnovationandprovidedgrantstoallowthemto realizetheirobjectives(Ashoka,2002Bornstein,1998Drayton,2002).BillDrayton,a formerMcKinseyconsultantandassistantadministratorattheUSEnvironmentalProtection Agency(EPA),foundedAshokaintheearly1980s,andisprobablyoneofthemostvocal promotersofsocialentrepreneurship.OtherexamplesincludeTheSchwabFoundationfor SocialEntrepreneurshipinGenevaandLondonbasedUnLTD theFoundationforSocial Entrepreneurs. Sofarpractitionershavebeenthemaindrivingforceforsocialentrepreneurship.Research contributionshavetendedtospreadtheword throughanecdotalevidenceanddescriptive casestudies.AliteraturereviewconductedbytheCanadianCentreforSocial Entrepreneurshipyieldedonly sevenjournalarticlesagainstahostof16contributionsfrom newsmagazinesandwebsites.Notsurprisinglytheauthorconcludesthatresearchonsocial entrepreneurshiplagsfarbehindthepractice (Johnson,2000:2) afindingsharedbyother scholars(Prabu,1999 Thompson etal.,2000). InanalyzingsocialenterprisesIfocusthispaperon thesourcesofentrepreneurial opportunitiesforsocial purposebusinessventures.
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Entrepreneurial Opportunity inSocialPurpose BusinessVentures

SOURCESOFSOCIALENTREPRENEURIALOPPORTUNITY

Social purposebusinessventuresarehybridenterprisesstraddlingtheboundarybetweenthe forprofitbusinessworldandsocialmissiondrivenpublicandnonprofitorganizations.Thus theydonotfitcompletelyineithersphere.Inordertokeeptheirbalancethesesocial enterprisesneedtodiscoverandexploitopportunitiestocreatebothsocialandeconomic value.Emersoncallsthisblendedvaluecreation(Emerson,2003).InthispaperIintroduce threesourcesofsocialentrepreneurialopportunity thatcanexplaintheexistenceofsocial purposebusinessventures:activism,selfhelp,andphilanthropy.Iproposethemainactors thatcontributetothegenerationofopportunitiesaswellastheirsocialandeconomicvalue propositions.

============================================ InsertTable1abouthere ============================================

Activism Onesourceofsocialentrepreneurialopportunity isactivistinterferenceinthemarketplace. Activistsaimtoinfluencepoliticiansandmanagersthroughmostlyconfrontationaland sometimescooperativecampaigns(Rondinelli&London,2003Spar&LaMure,2003

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Entrepreneurial Opportunity inSocialPurpose BusinessVentures

Yaziji,2003).Yet,uponrealizingthattheymay bestmeettheirgoalsthroughthesupportof socialpurposeenterprises,someactivistgroupshavebeguntoexplorethatroutemore systematically. Atypicalexampleisthefairtrademovement.Traditionallydevelopmentactivistslobby politicianstoprovidemoredevelopmentaidtopoorcountriesandblastmultinationalsthey perceivetoexploitsmallholderproducersinunderdevelopedcountries.However,inrecent yearstheyhavealsoinitiatedandsupportedfairtradeenterprisessuchasCafdirect(today thesixthlargestcoffeebrandintheUK)orAgrofair(afastgrowingfairtradefreshfruit wholesalerintheNetherlands).Theseorganisationsarenotonlysuccessfulbusinessesintheir ownright,buttheyarealsogovernedbytheprincipalofsocialwelfaremaximisationforthe producersofcashcropsindevelopingcountries(Robins&Roberts,1997Tallontire,2000). Thereasontheseenterpriseshavesucceededinacompetitivemarketplaceliesintwokindsof supporttheyhavereceivedfromactivists. Firstly,developmentactivistsprovidelegitimizationinthemarketplace.Implicitorexplicit endorsementfromorganisationssuchasOxfamandCAFODintheUKorSteun OnderontwikkeldeStreken(SOS)andSolidaridadintheNetherlandshashelpedtomakefair tradeaproductdistinctionthatcustomerstrust.Atthesametimecampaignsputindustry incumbentslikeKraft,Nestl,Procter&Gamble,andSaraLeeonthespot,agoodexample beingOxfamscampaignreportMuggedPovertyinyourcoffeecup (Economist,2002 Oxfam,2002). Secondly,activistsorganisedinchurchgroups,developmentinitiatives,orlocalcitizen committeesprovidefreemarketinganddistributiontofairtradeenterprises.Knockingon doors,stagingboycottsoutsidelocalretailersuntiltheylistfairtradeproducts,andspreading newsbywordofmouth all provideinvaluablefreemarketingtothesebuddingbusinesses.
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Entrepreneurial Opportunity inSocialPurpose BusinessVentures

Asthemarketshareoffairtradehasgrown, traditionalplayershavestartedtocrowdinon thisopportunity.IntheUK,SainsburysandtheCoop,forexample,havelaunchedownbrand fairtradelabelsthatareregisteredwiththeactivistgroupsandbeartheofficialfairtrade mark.EvenKraftFoodsInc.hasbeguntosellfairtradecoffeecertifiedbytheRainforest Alliance.Increasingeconomicpressurehasbeendrivingsomefairtradepioneersoutofthe market.Oxfam,forexample,stoppeditsownimportingoffairtradeproductsfocusinginstead ondevelopment(Stevens,2001).OtherfairtradeenterprisessuchasCafdirecthavesince revampedtheircommunicationstowardstressingproductqualityandthusmovingmoreinto thedirectionoftraditionalbusiness. Activismprovidessocialenterpriseswithasetofsocialentrepreneurialopportunities primarilybymakingthekeyassetsofactivistgroupsavailabletothesocialenterprise.Yaziji (2003)suggestslegitimacy,awarenessofsocialforces,distinctnetworks,andspecialized technicalexpertiseasthemostrelevantresourcesactivistgroupspossess.Forbuddingsocial venturestartupstheseresourcescanmakethedifferencebetweensurvivalandfailure. However,activismdrivensocialenterprisesarealsoatrisksincepublicpressuregroups usuallyhaveashortattentionspan.Theyoperateinaworldofcampaignsandthus, ultimately,mediaattention.Assoonassocialenterprisesbecomeestablished,activistgroups begintoloseinterest:theyarenotintheinstitutionbuildingbusiness. Inthelongrun activistbasedsocialenterprisesfacetwooptions.Eithertheytonedowntheir socialwelfaremissionandmutateintotraditionalbusinessescompetingprimarilyonprice andquality,orthey leavethebusinesssidetotheincumbentsandslidebackintotheactivist world.Thelatterisnotnecessarilyafailure.Oxfamsdecisiontostopimportingfairtrade productswasatthesametimetestimonytothefactthattheactivistorganisationhad succeededinkickstartingthefairtrademovement.Nowthatmoreandmoreprofessionalfair

Entrepreneurial Opportunity inSocialPurpose BusinessVentures

tradeenterpriseshaveemerged,Oxfam canmovebacktoitsoriginalmissionofalleviating povertyandlobbyingpolicymakers.

Selfhelp Thebeneficiariesofthesocialenterpriseareasecondsourceofsocialentrepreneurial opportunity.Usuallybeneficiariesofsocialinitiativeswouldbeexpectedtobepowerless. Whyelsewouldtheyneedsupportandprotectionfromsocialenterprises?However,oftenthe needycanpullthemselvesupgiventheopportunity.Thus,ropingthebeneficiariesintothe businesscanbeanothersourceofopportunityforsocialenterprisestheycanprovidethe enterprisewithvaluableresources. Taketheexampleofmicrofinance(Bornstein,1996).Traditionallyaidorganizationshave focusedonprovidingdonations.Yetcharityisnotthemosteffectivewaytohelpthepoor. Fromthisrealizationhasemergedahostofmicrofinanceenterprisesthatprovidethepoor withmicroloans,whichinturnhelpthemescapefrompoverty.Howcansocialenterprises succeedatthistaskwhentraditionalbankshavefailedatprovidingsuchservicestothepoor profitably?Aprimaryassetofmicrofinanceisthefactthatitencouragesthepoortosave. Thesefundsinturnareusedtofinancethemicroloans.Secondly,socialenterprisessuchas GrameenBankusetheirbeneficiariesasemployeesthusreducinglaborcost.Finally, knowingthattheyarethebeneficiariesclientsofmicrofinancebanksarehighlyloyalclients andthisresultsinlowerdefaultratesthanpureforprofitbanksencounter.Attractedbya growingmarketforfinancialservicesamongthepoor,banksandinsuranceprovidershave recentlybeguntoduplicatetheideasofmicrofinanceinaforprofitcontext.This,inturn,is puttingthepioneeringsocialenterprisesunderpressureandforcingthemtochoosebetweena

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Entrepreneurial Opportunity inSocialPurpose BusinessVentures

returntothefoldofcharityoramoveforwardintocommercialcompetitionwiththemarket incumbents. Selfhelpcanbeastrongassetforsocialenterprisesinallkindsofareas.GrameenPhone,for example,isemulatingthevillagebankconceptinbringingmobiletelephonytothepoorin ruralBangladesh (Malaviya,Singhal,Svenkerud,&Srivastava,2004Quadir,2003).Car sharingisanotherphenomenontakingonmarketincumbentsbyleveragingonitsclients.This typeofsocial enterprisehasgrownoutofthedesireofasmallnumberofpeopletosharetheir vehicles.Thesepeoplewerecriticalaboutcarownershipfromanecologicalpointofview,but stillhadanoccasionalneedtouseacar. Startingasaninformalselfhelpnetworkfoundedby ahandfulofpeople,carsharingcooperativeshavemushroomedalloverEurope.Themarket leader,MobilityCarSharing(MCS)inSwitzerlandservesover50,000clientsandowesits strongpositionlargelytoitscooperativemembers(Hockerts,2004).Apartfromputtingup capital,cooperativemembersalsodonatetimeandeffortto operatingthecarsharingsystem whilespreadingnewsaboutthebusinessbywordofmouth. Socialenterprises,drawingonselfhelpasasourceofentrepreneurialopportunity,findthis reflectedinthreeprimarycategories.Firstly,beneficiariesareasourceofcheapandpatient capital.Whiletheindividualcontributionofeachparticipantissmall,theaggregateresultcan beconsiderable.Secondly,recipientscanprovidecheapaccesstolabor.Theycanalsoknock ondoorsandgetthewordout.Incontrasttoactivistdrivenenterprises,beneficiariesbringthe additionaladvantageofbeingthesocialenterprisesclients.Thustheirmessagewillbe perceivedasmoreobjectivethanthatofapoliticalactivist.Thirdly,selfhelpenterprisescan besureoftheirclientele.Wherecommercialoperatorsmightlosefrustratedclients,the customersof socialenterpriseshaveahigherlevelofpatience.Thisisessentialastheyare

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Entrepreneurial Opportunity inSocialPurpose BusinessVentures

oftenfiguringouttheirbusinessmodelonthefly.Atleastinitially,thismayresultinlower qualityproducts. Adrawbackforselfhelpinspiredsocialenterprisesliesintheirinertia.Heretheyarethe exactoppositeofactivistenterprises.Havinggrownoutofaveryspecificneedoftheir beneficiaries,selfhelpenterpriseswilltendtosticktotheinterestsoftheserecipients,even whenitwouldmakesensetoemploytheresourcesofthesocialenterpriseinnewregionsor toaddressnewtargetgroups.

Philanthropy Athirdsourceofopportunitycanbephilanthropicventurecapitalists(Roberts,Emerson,& Tuan,1999).Whereascommercialbusinessesareexpectedtogeneratecompetitiveratesof returnthisisnottrueforphilanthropydrivenenterprises.Herethealtruisticmissioncanbe sufficientpaybackforphilanthropicinvestors.Asaconsequenceofsubsidizedcapital,social enterprisescancompetewithmarketincumbents. Goodexamplesof philanthropydrivenenterprisesareRubiconBakeryandRubiconLand scapeServices,basedintheBayArea,California(Moore,1999).Bothbusinessescompete withtraditionalfirmswhileprovidingjobsandtrainingfordisabledorhomelesspeople.In ordertodeliveritsproductsandservicesatacompetitivepriceRubiconreliesoncharitable supportfromphilanthropicventurefunds.TheRobertsEnterpriseDevelopmentFund(REDF) isoneofthecontributorstoRubicon.REDFassistsitsportfolioorganizationsinavarietyof ways,mostnotablybyprovidingfinancingfororganizationalinfrastructure,accessto additionalfundsforcapitalexpensesandstrategicbusinessdevelopmentassistance.Italso

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Entrepreneurial Opportunity inSocialPurpose BusinessVentures

providesaccesstobusinessnetworkingopportunities,socialoutcomemeasurementand technologicaltoolsandtraining. Overthepastyearsventurephilanthropistsfocusingparticularlyonsocialenterpriseshave sprungupinmanycountries.TheyincludeorganizationssuchasAshokaintheUS, the SchwabFoundationforSocialEntrepreneurshipinGeneva,andLondonbasedUnLTD the FoundationforSocialEntrepreneurs. Philanthropydrivensocialenterprisesbenefitfromthreeadvantages.Firstly,venturephilan thropistsareasourceofsubsidizedcapital.Secondly,ratherthanjustprovidingcharitable grantsventurephilanthropycomeswithvaluableadviceonlaunchingandgrowingsocial enterprises.Finally,socialenterprisefundslinktheirportfolioinvestments,intheprocess creatinguniquenetworksofsocialenterprisesinwhichtolearnandcooperate. Atthesametimeventurephilanthropistsdemand,morethananyotherpartner,accountability foranenterprisessocialperformance.Thisrequiresthesocialenterprisetokeepitseyevery closelyonitssocial missionandthusavoidingadriftawayfromtheunderlyingsocialwelfare objectives.Atthesametimephilanthropydrivenenterprisesmayalsoberestrictedbythe altruisticfocusof theirinvestors.Moreimportantly,mostphilanthropicfundshave investmentcycles oncetheycometoanend,socialenterprisesareexpectedtobeableto succeedinthemarketplaceontheirown.Thosethatcannotachievethiswilltendtodriftinto anonprofitstateofmind.

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Entrepreneurial Opportunity inSocialPurpose BusinessVentures

CONCLUSIONS

Scholarsworkingon developingatheoryofsocialentrepreneurshipfacetwochallenges. Firstly,theircontributionsriskbeinglostinaquagmireofdefinitions.Grandsocialentrepre neurialtheoryneedstocoversobroadanareathattheresultisoftenlittleconvincing.More focusedmidrangetheoryseemstoofferamorepromisingvenuetomovesocialentrepre neurshipresearchfromitsinfancystagetoamorerigoroustheoreticallevel.Ihave,therefore, focusedthispaperonjustoneelementinthemosaicthatissocialentrepreneurship.By studyingthesourcesofentrepreneurialopportunityforsocialpurposebusinessventuresI intendtoprovidescholarsinourfieldwithaninitialframeworkthatIhopewillbefurther developedandextendedbyfutureresearch. Asecondchallengeofsocialentrepreneurshipresearchliesinthelackofrigorousempirical studiesgroundingortestingtheoriesaboutsocialentrepreneurship.Aparticularproblemis thelackofsystematicdataonsocialenterprises.Todate, thereisnoCompustatequivalentfor socialenterprises.AnotableresearchendeavorinthiscontextistheStanfordProjecton EmergingNonprofits(SPEN),studying200randomlyselectedoperatingcharitiesintheUS andintheprocess,generatingavaluablebodyofdata.Itwouldbehighlydesirabletoseea similareffortforsocial purposebusinessventures.Futureresearchcouldalsoprofitablyuse matchedpairdesignstostudysocialenterprises.Itmight,forexample,beilluminatingto study threeotherwisesimilarsocial purposebusinessventures, oneofwhichisprimarily activistdriven,oneofwhichisselfhelpbased,andoneofwhichisdrawingonphilanthropic capitalasitsprimarysourceofsuccess. Researchersmayfindtheconceptualframeworkproposedinthispaperusefulintwoways. Currentliteratureoftenintimatesthatthereexistsomegenerallyapplicablemanagementrules

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Entrepreneurial Opportunity inSocialPurpose BusinessVentures

forsocialenterprises.Theframeworkintroducedheresuggeststhatpractitionersneedtothink systematicallyaboutthetypeofentrepreneurialopportunityunderlyingtheirsocialenterprise. Dependingontheprimarysourceofopportunitytheymayhavetoadoptsignificantly differentstrategies.Asecondvenueofresearchcouldbethestudyoforganizationsthatdraw simultaneouslyonseveralsourcesofopportunity.Hereitwouldbeinterestingtostudy tensionsbetweenactivism,selfhelp,andphilanthropy.Theresultwouldbeamorefine grainedunderstandingofhowthedifferentsourcesofopportunityinteractwitheachother.

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Entrepreneurial Opportunity inSocialPurpose BusinessVentures

TABLE1 AConceptualFrameworkforSocialEntrepreneurialOpportunities

Opportunity Activism

MainActors Activists

EconomicValueProposition

SocialValueProposition

Providesmorallegitimization Socialconcernschampionedbythe to the socialenterprise activistgroup CommunicationandDistribution throughactivistnetworks Cheaplabourandmarketing Cheapandpatientcapital Loyalandpatientclients Charitablegrantsanddonations Businessdevelopmentadvice Networkingwithothersocial entrepreneurs Socialneedsorconcernsof main beneficiariesofthe socialenterprise Socialissuesdefinedbythedonor

Selfhelp

Beneficiaries

Philanthropy

Donors

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Entrepreneurial Opportunity inSocialPurpose BusinessVentures

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