Social Entrepreneurship is About Innovation and Impact, Not Income

By J. Gregory Dees

Despite efforts to spread an innovation-based definition, far too many people still think of social entrepreneurship in terms of nonprofits generating earned income. This is a dangerously narrow view. It shifts attention away from the ultimate goal of any self-respecting social entrepreneur, namely social impact, and focuses it on one particular method of generating resources. Earned income is only a means to a social end, and it is not always the best means. It can even be detrimental-taking valuable talent and energy away from activities more central to delivering on the organization’s social mission. Though it is very popular right now, it is just one funding strategy among many and must be assessed on a case-by-case basis. The key is finding a resource strategy that works. Focusing on earned income leads people to embrace the problematic idea of a “double bottom line.” Profits should not be treated with equal importance to social results. No amount of profit makes up for failure on the social impact side of the equation. Any social entrepreneur who generates profits, but then fails to convert them into meaningful social impact in a cost effective way has wasted valuable resources. From a management point of view, the financial “bottom line” is certainly important, but it is not on the same level as social impact. Social entrepreneurs have only one ultimate bottom line by which to measure their success. It is their intended social impact, whether that is housing for the homeless, a cleaner environment, improved access to health care, more effective education, reduced poverty, protection of abused children, deeper appreciation of the arts, or some other social improvement.

Published in The Skoll Foundation’s Social Edge (September 2003) and the CASEconnection Newsletter (October, 2004)