In the past decade, social entrepreneurship has taken off. Whether it’s Toms Shoes or The Elephant Pants, almost every modern-day consumer can name a socially responsible enterprise. Social entrepreneurship is any business endeavor that has two bottom lines: both financial profit and social impact. As a generation that is acutely aware of systemic problems and that has a unique sense of agency to enact change, it’s no surprise that millennials embrace social entrepreneurship at record levels. Millennials have grown up in a world marked by globalization and the digital revolution. News about natural disasters, famines, and genocides across the world are pervasive across social media, the Internet, and other forms of communication. Millennials take these issues to heart as both consumers and producers– they are a generation that their dollar, their like, their tweet can make a difference. 89% of millennials are likely to switch from one brand to another (if price and quality are equal) if the other brand supports a cause. Given that millennials are more likely to support businesses that combine profit and social good, it makes sense that millennials would also be more inclined to start such businesses. In fact, millennials have been so active in social entrepreneurship that Forbes has a 30 Under 30 list specifically for Social Entrepreneurs. Millennials are identifying problems, innovating solutions, forming sustainable and businesses out of these solutions.
These social enterprises come in a spectrum of models. Some are non-profits that earn income, with that income funneling back into the non-profit to further the cause. This particular model is effective because the revenues ensure that the business is self-sufficient and not wholly dependent on grants or philanthropy to continue operating. However, because it is a non-profit, these organizations still qualify for grants, gifts, donations, and tax exemptions. Other enterprises are organized as for-profit institutions. These organizations focus on the financial bottom line with the goal of turning a profit in addition to their social-driven missions. This means that founders and investors alike can actually make a profit from this venture. These socially minded businesses attract investment from angel investors and venture capitalists.
Most social enterprises are some combination or variation of these models – there’s no hard and fast rule. For example, Greg Spencer co-founded The Paradigm Project. The Paradigm Project sells cheap, clean-burning cook stoves to developing countries. Not only does this lower carbon dioxide emissions, but it also supports children’s health – the number one killer of children under five globally is lower respiratory disease that’s often related to indoor cooking smoke. After profits and revenues are distributed to employees and investors, surplus proceeds are donated to health clinics, schools, and clean water initiatives. Millennials are innovating not only products and services, but also creating entirely new business models to fit their unique goals and need. Social enterprises stand at the unique intersection of government, non-profits, and corporations to adapt the benefits of each sector. More efficient that government, more self-sustaining than non-profits, and more socially focused than businesses, social enterprises are uniquely positioned to both effect social change and generate economic growth.
Some millennials are pursuing social entrepreneurship within larger corporations, running corporate social responsibility efforts and starting cause related marketing campaigns. As consumers increasingly care about responsible production, major corporations have responded by starting these initiatives. Almost every single company of scale has a social responsibility office, generally run by millennials. This social intrapreneurship is another way for millennials to access business and social impact through the same job.
All of this change and optimism mixed with capitalism can be boiled down to the millennial expectations of their future careers. Their expectations seem self-evident to me, a millennial college student, but are actually quite radical in the history of young people entering the workforce. Rhiannon Colvin, a young social entrepreneur, summed up the career expectations of a generation when she said, “It’s simple: work should allow us to generate an income, do what we love, and have a positive impact on the world.” It’s this requirement of all three aspects that is driving social entrepreneurship, and it’s this expectation for a fulfilling career that will change the landscape of non-profit and business models for decades to come.
*Image taken from http://timreview.ca/article/523