Balancing Value and Markets in Social Enterprise

Columbia University’s Research Initiative in Social Entrepreneurship (RISE),  conducted a study in 2006 that compiled the findings of conversations with more than 200 CEOs of social enterprises based with operations in the US and globally. The study was aimed at understanding the kind of social value that was being created by social enterprises, and the associated challenges that they faced. The report, “RISE For-Profit Social Entrepreneur Report: Balancing Markets and Values” is a follow-up on an earlier reports that looked at the double bottom line capital markets.

Some highlights from the report are:

• CEOs mentioned difficulty in raising money from people who may or may not understand the businesses commitment to a social mission.
• Identifying best definitions and labels for the business venture, and deciding when to use the company’s mission to educate and connect with people and when to avoid doing so.

The report also identifies four types of CEOs of Social Ventures. These were classified based on their prioritizing of social and financial priorities. The four classes of CEOs identified are by the report are: Activits (socially oriented, and explicit about this with their customers), Change Agents (socially oriented, but not explicit about this with their customers), Market Pioneers (financially oriented and explicit to customers), Market Influencers (financially oriented and not explicit about this to their customers).

A majority of the respondents of their survey worked towards creating value in environmental issues, followed by health and community development. The most common vehicle to disseminate this social value created was through a product or service offering. However, this varies by sector. For example, advocacy and philanthropy as vehicles for creation of value is widely used by those in the media.

Read more about the survey and its findings here.