We have heard the terms social entrepreneurship countless time and its best-simplified definition was given to me by a social entrepreneurship lecturer. She said, “Social entrepreneurship is entrepreneurship that places our societies first and money second. We employ all the techniques and principles of entrepreneurship to solve a social problem.” In a broadly capitalistic economy, this model is not only tough to maintain but also hard to kick start. Most ventures on this lane die out or shift to mainstream entrepreneurship in order to survive the brutality. There are numerous challenges involved in starting and running any venture but running a social venture presents a new set of additional limitations.
First and foremost, access to financing is extremely difficult with this model. Banks and financing institutions are typically capitalistic creations and therefore funding an organization whose main focus is not to for the money but for positive impact is a challenge because they believe they might lose money. On the other hand, donors have been reported to distrust the model because these organizations also have an aim to make money and therefore they believe their operations might be skewed towards the profitable side rather the social impact due to pressure.
Image from http://ico.nida.ac.th/curriculum/master-of-managemententrepreneurship/
Secondly, competition has been on the increase in all sectors with most companies left to compete on a price basis. Mostly, social ventures are at grass root levels offering cheaper options for the less fortunate and there have been numerous cases of the local government authorities for example city council stepping in and providing the same services at a lower price. These local governments are heavily subsidized by the government and are therefore able to afford the low prices, a luxury unknown to social ventures.
Additionally, the possibility of changing the venture’s mission over time cannot be overlooked. Notably, social ventures are run the same way other for-profit entities are run. It is therefore very possible to shift their focus as soon as the profits start streaming in and fully decide to focus on this area mainly because it benefits the shareholders and management and to be able to retain their market share through competition.
Lastly, some social ventures in Kenya have roots in a developed country and this means that the top decisions and management exclude locals and the low-level employees. With time, this brews resentment which in turn will end up frustrating any organizational efforts to run the venture. Also because of this exclusion, most ventures end up focusing on areas that they think are paramount to the local community which could be untrue.
Social ventures have the potential to provide sustainable solutions in Kenya if the government streamlines its operations and improves on infrastructure. Amidst all these challenges and many others, social enterprises are still afloat and surviving. We should support such ventures as they serve a need that the community has, and in the end, we also benefit from these ventures, in one way or another.