The Truth about Social Enterprise


We are often approached at dinner parties, in train stations, at conferences, in line for the loo, with the dubious, difficult, eyebrow raising question of, “So, what do you do?” I find myself pause each time to size the interrogator up. I evaluate what kinds of clothes they are wearing, which accessories and colors, I try to assess how jaded their face appears, I stare straight into their eyes in attempt to look deep into their soul to find out if they truly want to know. In all honesty what I’m really doing is passing slightly ridiculous judgement upon this person. I’m judging not only how interested they seem, telling me which of the 5 word, 1 minute, or half hour schpeels I want to dive into, but also how much they may already know about what I do. Sometimes I’ll begin by peppering them with a number of seemingly random and tangential questions derived from what I have surmised in my former physical assessment. A scarf from South East Asia tells me this person has travelled and knows a thing or two about poverty- I can start there. A kitschy bracelet made of colorful strings tells me this person has made friends with someone from my target customer base- a simpler start. An autobiography by Jacqueline Novogratz tells me this person is already a fan of “this space”- I can jump right in. Yes, I am vaguely aware of how off base this methodology is. But wait, what am I jumping into exactly?I am jumping into an explanation and thesis defense of the space we’ve come to call “social enterprise.” Depending upon what experiences you’ve had, where you’ve lived, how old you are, and your proximity to the poor, you may or may not have any clue what this is. Some of the best responses have been, “You mean, like Facebook?” (no, that’s social media) “Hm, is that like the Anna Hazaare fasting thing?” (No, that’s a social movement, but we’re getting warmer!) There are various ways I’ve attempted to explain this recent phenomenon, most falling short of successfully articulating what I do. Then I realized even I’m not sure how to appropriately define what I do.

I could tell you it’s similar to microfinance, where rather than throwing money at the poor, we enable them with access to the same tools middle and high income people have, empowering them to lift themselves out of poverty. I could tell you about how over the past few decades, developed country’s governments throwing money at poor countries has resulted in little avail, likening it to feeding a man for a day rather than teaching him to fish-we try to teach (wo)men to fish. I could also tell you what most social entrepreneurs would cringe at the sound of, that it’s basically non-profit work that is a little more dignified for the end customer. Or even worse, that it’s actually just like all other enterprises, because at the end of the day, putting the word “social” in front just makes us feel better.

The question is, today what is the difference between a social enterprise and a non-profit? And what is the difference between a social enterprise and a normal enterprise? Furthermore, tomorrow, should there be a difference? If so, what should it be? If not, what are we doing wrong today to have created this misconception amongst ourselves and others?

A non-profit’s end goal is to enhance the life of a disadvantaged person by providing them with a product of service, often free of charge. The common criticism of old school non-profit work is that it’s as bad and as ineffective in the long run as feeding someone for a day. I argue this is only true for a certain segment of the world’s population. My argument is this: There needs to be a redefinition of poverty. There are those who save and those who do not save. Those who do not save a pesa, a penny, an ounce of money for a rainy day because they need every little bit to get by every single day, they DO need help. They need charity and non-profit help because they lack the foundational skills that the rest of the population was afforded. Those skills must be nursed and experimented with in a safe space just as a child would learn the skills to take their first steps. This segment of the population requires our Good Samaritan work- clothes, books, classes, money, if given in an intelligent way, can truly bring this population into the other segment: the one that saves. The non-saving population is who non-profits should exist for, exclusively. But for those of us who save, whether they are “below” the imaginary, flawed poverty line we’ve invented or not, require enterprise. (I’m speaking about people as individuals here, as opposed to the way we categorize people in the “BPL: Below the Poverty Line family” categorization. A child in a family that is wealthy and saving DOES NOT SAVE on her own. That child requires free services just as the child in the family that cannot save requires.)

A normal enterprise’s end goal is to provide a product or service to people that makes their life a little simpler or enhanced. Their product, price, target customer, marketing, etcetera all vary by company. It seems by attaching the “social” prefix to it, what we’re hoping to clarify is that the target customer variable of our company is non-variant- that we only serve the old definition of the “poor.” Does this enhance our image and uplift our abilities as an enterprise or does it limit us from creating a diversified set of products for a diversified set of customers? I argue that it limits us and furthermore that it alienates our end customer by labeling them, suggesting they require a difference kind of company than the rest of the world requires. Is that the truth? If we went with the redefinition of income classes as the savers and the non-savers, we would have to categorize ourselves as serving the savers, and hence, a normal enterprise like the rest. Which, in truth, we should strive to be. A big conglomerate like Bose, whose profits are primarily in selling big fancy speakers to big fancy people, may also develop the speaker in the next $20 Nokia handset. They therefor serve the entire gamut of savers.

Savers have purchasing power. Savers need enterprises. By limiting our end customer to a small segment of the population, we limit our reach, our profits and sustainability, and most of all, our customer’s empowerment.

We are entrepreneurs, serving people, bringing them products and services to simplify or enhance their lives. Period.


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About Shabnam Aggarwal

Shabnam worked at MILLEE for 1 year, 2009-2010, using mobile phones to bring educational games to rural children in India. Then she started The Teach Tour mid 2010, which took her around India and the US uncovering why we've failed to educate children worldwide, with various organizations and people. Then she started HobNob earlier this year, 2011, which is a mobile phone enabled feedback mechanism that gives students a voice in their classrooms. She simultaneously started Hindsight Conference which is a conference focused on all the failures that it takes to get to the incredible success stories we normally speak about in public. Both are still in the works, HobNob and Hindsight, but she is about to embark upon a new journey with a company called Digital Green to help them bring access to better practices in farming through the use of video.Shabnam would love to connect to experts in education, edutech, mobile learning, or some combination there of (or anyone interested in learning more about her insights)!


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