Social Entrepreneurship - Emerging Scenario in India

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With such wide variety of enthusiastic entrepreneurs taking up the responsibility as social entrepreneurs, I am personally very optimistic about the future of the nation. Let me take up few points related to social entrepreneurship:

1. What is social entrepreneurship?

Social entrepreneurship is about having a social objective as a goal of the venture. The objectives can range in the areas of education, healthcare, culture, microfinance etc. with the aim of societal benefits. The venture in itself can be operated as a "For-profit" or as a "Non-Profit" entity. Some of the famous social entrepreneurship ventures include Grameen Bank (Bangladesh) and SKS Microfinance, India(recently came out with an IPO in stock exchanges). Few corporates also follow this as a part of their corporate social responsibility initiatives.

2. Is profit maximization an objective of a social entrepreneur?

Traditionally, profit maximization has always been the objective of any business - coming from a pure capitalist and commercial mindset. However, for last few years, people are realizing that a "Triple Bottomline" - caring for profits, society and environment, leads to long-term sustainability compared to a short-term pursuit for profits. It does not mean that social entrepreneurs do not want profits, they want sustainability over profits. For example, SKS Microfinance focuses on creating impact by giving small loans (upto Rs 10000), to ladies in groups of five, with/without collateral - which a large bank may not do from a commercial angle.

3. How does a social entrepreneur raise funds?

As there are social entrepreneurs, so there are social investors too. There exist various sources of funds for social entrepreneurs:

- Grants - Foundations like Michael and Susan Dell Foundation, Bill and Melinda Gates Foundation, GiveIndia

- Venture Capital - Song Advisors, Acumen Fund, Ventureast, Aavishkar, Lok Capital, Accion, Bellweather

- Angel Investors - Mumbai Angels

- Incubators - RTBI, Villgro

Government and corporate sectors are other major sources of funding for social entrepreneurs. For example, Edelweiss has a Edelgive Foundation, which does funding of social ventures.

4. How to register a social venture?

Depending on the type of venture (profit/non-profit), the venture can be registered as a private limited company, a NGO, a society or as a trust. There are various tax exemptions available for social ventures, and you need to keep in mind the long-term objective before deciding the entity to register.

Among the organizations working for social entrepreneurs, the notable ones include DASRA, Ashoka Foundation and Villgro - who aim at bringing the social ventures into limelight by training, mentoring and advisory activities and also by connecting entrepreneurs to investors. With so much action across the eco-system, social entrepreneurship is being seen as an impactful way to create a meaningful difference.

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