Socialpreneurship: What it is, Why it’s Needed & Why you Should Care

13th Aug 2021
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You need some new socks. Who would you rather buy them from:

a) A company that keeps 100% of its profits to develop and grow

b) A company that keeps 50% of its profits to develop and grow and donates the other 50% to a 3rd world country

Research shows that 33% of consumers would actively choose to buy from a brand that’s doing some kind of environmental or social good, over one that isn’t.

This is exactly what socialpreneurship is all about: It’s for-profit businesses that have a mission to not only make money and grow but to also do good in the universe.

This article is all about the shift towards socialpreneurship and how you and your clients can encourage socialpreneurship within your own business.   

What is socialpreneurship?

What business entrepreneurs are to the economy, social entrepreneurs are to social change.” – Net Impact

Although it might seem like a modern-day buzzword, socialpreneurship (or social entrepreneurship) has been around since the 19th century: Nurse Florence Nightingale and landscape architect Frederick Law Olmsted are considered to be the first social entrepreneurs.

But what exactly is socialpreneurship?

Social entrepreneurship is, at its most basic level, doing business for a social cause. It might also be referred to as altruistic entrepreneurship.” – Shopify

Socialpreneurship is about developing a profitable business that has an overriding objective to tackle global issues such as alleviating hunger, improving education, and combatting climate change.

Socialpreneurship combines capitalism with a humanitarian mentality: It utilises a business model to create social value. Success to socialpreneurs doesn’t relate to how much profit they’ve made or how many markets they’ve conquered. Success for socialpreneurs is centred around how much impact they’ve been able to make on social or environmental issues and how much they’ve managed to change the world with their business.

Socialpreneurship vs entrepreneurship

Entrepreneurship is the act of setting up a business and taking on all the stress, unknowns and financial risks in the hope of making a decent profit. Whereas socialpreneurship is the act of setting up a business and taking on all the stress, unknowns and financial risks, but to achieve social change rather than turn a huge profit.

So, the biggest difference between socialpreneurship and entrepreneurship is the end goal: Socialpreneurship is less about high-profit margins and more about making sure business operations benefit or support social and environmental issues.

The types of socialpreneurship

The term ‘socialpreneurship’ is commonly associated with building a standalone business specifically to support social endeavours, like Cracked It, for example.

Cracked It is a smartphone repair business that has been set up to provide employment and income opportunities to previously incarcerated people who are struggling to find work and have been dismissed by society.

However, there is another form of socialpreneurship.

There is also room within the term ‘socialpreneurship’ for entrepreneurs in regular, for-profit businesses to fund programs or collaborate with other socialpreneurs to support social issues.

Take ice cream pioneers Ben & Jerry’s, for instance.

Ben & Jerry’s are not only known for their outlandish ice cream flavours, but they’re also known for their dedication to supporting environmentally friendly farming and manufacturing processes, racial justice, and LGBTQ+ issues.

The 2 key benefits of socialpreneurship

It’s estimated that partnering with and supporting social entrepreneurs could have a positive impact on the lives of nearly 1 billion people.” – Wikipedia

But aside from wanting to do their bit to save the planet and support people and communities that need it, what other benefits does socialpreneurship offer businesses?

Customers like to buy from socially responsible companies

As we established earlier, a large percentage of the population, especially millennials, prefer to buy from brands that contribute to social or environmental causes.

If customers know that their purchase will contribute to a social cause such as preventing disease by providing soap to underprivileged areas, they feel better about spending their money on something they need or want.

Socialpreneurship provides a USP  

In a crowded marketplace, companies need to stand out to survive. So, what better way to differentiate themselves than to develop innovative solutions to promote social change. Developing partnerships and collaborations with other social entrepreneurs and businesses allows them to develop an offering that gives them an edge and sets them apart from the crowd.

Any business benefits from having an edge, and social enterprises can benefit from the selling point of positive impact.” – BetheChange  

Socialpreneurship gives companies the ability and the freedom to explore and create innovative solutions for change.

How to get involved in socialpreneurship 

Whether they’re setting up a social enterprise from scratch or integrating socialpreneurial initiatives into their existing business activities, companies from across the globe, from small start-ups to big conglomerates, are making a significant shift towards adopting a socialpreneurship outlook.

Regular for-profit organisations such as IKEA, for example, have been prioritising collaborations with socialpreneurial businesses since 2012. This initiative was first designed to support one of their core values which was to “care for the people and the planet.” They started selling products and services that these collaborative socialpreneurs were offering, alongside their own.

Collaborating with social entrepreneur artisans – mostly women – gives us the possibility to offer tailor-made services and beautiful, unique products to our customers while contributing to jobs for refugees and vulnerable groups.” - IKEA

Today, their socialpreneurship programme works with over 100 social entrepreneurs to generate work for over 30,000 people (with the aim of reaching 95,000 jobs by 2025), help over 750 million children in poverty and support over 1 billion people with disabilities.

Some companies actively look for opportunities to recycle, repair refurbish, customise and create services that contribute to building a circular economy.  And others prioritise developing innovative solutions for change by taking advantage of the government-backed R&D tax relief scheme. With this incentive, they get to claim up to 33% of the costs associated with researching developing their innovative socialpreneurship projects.

If you or your clients want to prioritise social innovation too, find out more about this R&D tax relief scheme by either dropping R&D tax specialists, Myriad Associates, a message or calling them on 0207 118 6045.

Having been in the R&D tax and grant industry for over a decade, Myriad Associates are experts in getting clients the maximum amount of R&D tax relief possible.