How Social Entrepreneurship Is Challenging Big Business Social Impact

By Eric Goldschein, GenFKD

When discussing big business social impact, it’s not a stretch to say that, historically speaking, most American businesses haven’t been too community-focused. From Pullman company towns and West Virginia coal wars to modern shoe factories and resource extraction, humans have often taken a backseat to profits throughout our history.

But over the last couple of decades, a shift has occurred. As Ashoka founder Bill Drayton puts it, the citizen half of the world is no longer lagging behind the business half. A tipping point has been reached: social entrepreneurship is now seen as a “credible avenue” for driving change. Not only that, but increasing evidence of its financial benefits has resulted in more companies capitalizing on the newfound consumer affinity for social responsibility. Big business, in ways small and large, is responding to this new reality.

What changed and made social entrepreneurship more viable?

The first thing that should be noted is that labor laws and collective organizing in the United States has helped make working conditions safer and more humane than in the days of Upton Sinclar’s “The Jungle.” However, the spread of technology, specifically the Internet and social media, is one of the main reasons that we’ve gone not just from poor to decent conditions, but all the way up to companies giving back to workers, communities and causes.

Thinking back to large-scale charitable movements, one of the biggest philanthropic events of the 1980s (when social entrepreneurship first truly emerged) was LiveAid, a dual-continent concert where the proceeds went to help abate famine in Ethiopia. Broadcasting the music worldwide via satellite was cited as a major reason for the project’s success.

Today, we share important issues and social dilemmas with a click. This not only makes company supply chains more transparent and subject to immediate backlash in the form of viral news, but it keeps people informed of the need to improve conditions for workers and people all over the world.

Of course, nonprofits and charitable organizations have been around for much longer than the social entrepreneurship movement. But historically, one of the biggest issues with nonprofits is that, to some degree, many were inefficient. Non-profits often feel pressure to pour their money into fighting their cause rather than investing in themselves—which might result in garnering more productive tools and means. Meanwhile, businesses often invest in themselves and ignore the issues. The latter is no longer sustainable from a marketing and…

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