As an agency that serves organizations and businesses in many different industries, we’re well versed in the characteristics of not-for-profits and for-profits alike. Each is made up of a group of people driven toward their organization’s mission, but there are nuances between them—both altruistic and entrepreneurial traits that work together to create what is known as social entrepreneurship.
The Altruist
At the heart of the nonprofit organization is an altruistic spirit—a person who is passionate about making a difference for fellow people, the animal kingdom, and our larger planet. These people care about elevating the well-being of others. They help during times of hardship and celebrate during times of joy. At their core, altruists are:
- Empathetic: altruists seek to fully understand another’s experience
- Just: altruists believe in what is morally right and fair
- Accepting: altruists believe that all people deserve to be taken seriously
- Humble: altruists place importance on others (human or natural world) before themselves
- Empowered: altruists have an internal locus of control, believing that they are truly capable of creating positive change
Not surprisingly, most altruists are drawn toward nonprofits. Here, they find a space to practice their values while serving others. That said, these people do face their fair share of challenges. For example, nonprofit leaders are constantly navigating policy changes, fundraising concerns, and volunteer recruitment snafus—all distractions from achieving their individual missions.
The Entrepreneur
At the heart of the for-profit business is the entrepreneurial spirit—a person who is passionate about developing a product or service that generates profit. These people are usually full of ideas, and want to see the idea financially prosper. At their core, entrepreneurs are:
- Inspired: entrepreneurs feel compelled to shift a negative experience to a positive one
- Creative: entrepreneurs think outside of the box, innovating to develop solutions that don’t currently exist
- Action-oriented: entrepreneurs generate momentum, taking concrete steps to bring their ideas to life
- Courageous: entrepreneurs understand consequences, but aren’t afraid to take risks
- Resilient: entrepreneurs can withstand adversity, and are driven to see their ideas through market adoption
Entrepreneurs thrive in the startup world. Here, they get to tinker with ideas, experiment with implementation strategies, and constantly iterate as they receive customer feedback. While the pace of the startup environment is thrilling, for-profit does come with its challenges as well. Entrepreneurs are constantly navigating risk management, financial investment, and increased competition—all distractions from designing truly meaningful products or services.
How Altruism and Entrepreneurship Align
The primary difference between altruists and entrepreneurs is that the latter is generally motivated by financial gain. With this in mind, they do share similar traits. For example, empathy can serve as inspiration, illuminating an opportunity for improvement. Humbleness can serve as courage, making space for personal vulnerability and risk-taking. Empowerment can serve as resilience, providing the energy and encouragement to quickly overcome challenges on one’s own.
These two different ideals—altruism and entrepreneurship—pair together to create what is known as social entrepreneurship.
Social Entrepreneurship Defined
Social entrepreneurship is a relatively new term in today’s market. It is a hybrid between the nonprofit organization and the for-profit business. Inspired by Roger L. Martin & Sally Osberg’s “Social Entrepreneurship: The Case for Definition” in Stanford Social Innovation Review, social entrepreneurship follows these three elements:
- Identifying a common yet unjust environment that is exclusive, perpetuates marginalization, or causes suffering to groups of people who lack the financial or social capital to achieve a transformative benefit
- Identifying an opportunity in this unjust environment, developing a value proposition, and promoting inspiration, creativity, action, courage, and fortitude to challenge the unjust environment
- Forming a new, just environment that releases the trapped potential or alleviates the suffering of a specific group, and scaling this change to ensure a better future for society at large
In this definition, the value proposition is what distinctly differentiates the altruist from the entrepreneur. It creates a for-profit model that is no longer incentivized by profit, but by impact. The outcomes of the traditional for-profit model are deemphasized, while the mission (and ability to influence) are elevated.
There is still much to be explored in the social entrepreneurship model. However, we believe that all organizations—nonprofit or for-profit—may be inspired by the parallels between altruism and entrepreneurship. After all, the more we understand about one another, the more we advance lasting and transformative change.
Interested in the pursuit of social entrepreneurship? Check out Nexus Impact Center. They help businesses and organizations overcome the barriers to creating impact.