Social Entrepreneurship: Value Creation through Different Models

Posted: February 5, 2012 by Brett Smith in Ecosystem, People, Social Entrepreneurship, Startup

Contrary to popular belief social entrepreneurship does not equal nonprofit organizations. While social entrepreneurship may occur within and through 501(c) 3 organizations, the legal entity is not the primary criterion for social entrepreneurial activity.  In social entrepreneurship, it is the explicit social mission that distinguishes social entrepreneurship from other start-ups. In this way, social entrepreneurship can occur along a continuum of for-profit to non-profit organizations where the social mission is central and explicit.  Following are a few of the many examples in the Cincinnati area that use different models to deliver social value.

Nonprofit focused on social value creation: GCEA

Greater Cincinnati Energy Alliance (GCEA) is a nonprofit organization whose explicit social mission is to lower consumer, business and nonprofit use of energy. The Department of Energy provided early stage funding with goals of reducing energy / environmental costs and of creating jobs for Greater Cincinnati and Northern Kentucky. A recent study indicates that energy efficiency could save residents and nonprofits more than $60 million and create more than 300 jobs, adding another $13 million in economic benefit to the area. In this way, the founding of GCEA by Andy Holzhauser created a nonprofit organization focused on creating social value by reducing unnecessary energy consumption.

For-profit focused on social value creation: Nehemiah Manufacturing

Although GCEA started as a nonprofit organization, Nehemiah Manufacturing organized their business as a traditional for-profit manufacturing company with one primary difference: the goal to generate social value through the company. Launched by Dan Meyer and Richard Palmer, Nehemiah Manufacturing has an explicit purpose of building brands, creating jobs and changing lives. As brands are developed and grown, Nehemiah Manufacturing creates jobs for people who have challenges finding employment, including those with criminal records or gaps in employment.  As a result, the for-profit organization, that manufactures licensed products such as Kandoo personal care products, creates the social value of providing jobs for those who may not have otherwise found employment.

Organizations that accelerate social value creation: Flywheel Cincinnati

While nonprofit organizations have often relied on grant and donation models to fund their operations, an increasing trend is occurring where nonprofit organizations create revenue generating strategies, commonly referred to as social enterprises. Flywheel Cincinnati  is a social enterprise hub, where services range from initial training classes to one-on-one consulting, designed to meet organizations wherever they are in the process of considering or executing a social enterprise.  Flywheel Cincinnati is working with nonprofit organizations in Greater Cincinnati and Northern Kentucky to accelerate the development and execution of revenue generating strategies that improve financial sustainability and deliver their social mission. In this way, Flywheel Cincinnati helps nonprofit organizations take greater control over their destiny by integrating economic and social value creation.

Each of these entrepreneurial organizations launched within the last few years in Greater Cincinnati. More importantly, these organizations represent both the diversity and promise of the field of social entrepreneurship creating value in our region through the identification, development and execution of an explicit and central social mission.

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