Introduction
Entrepreneurship occupies a significant role in the world because it is typically associated with obtaining economic benefits. However, this concept is broader because social entrepreneurs use “business concepts and methods to pursue a social purpose” (Worth, 2020, p. 446). This quotation demonstrates that these individuals invest efforts in making the community better for everyone. Scholars and experts have not arrived at a consensus about the precise meaning of social entrepreneurship, denoting that different approaches are available. The social innovation school of thought offers a more satisfactory definition, while private and government efforts should be united to promote economic development and reduce poverty.
Social Entrepreneurship Definition
To begin with, one should mention that there are two approaches to defining social entrepreneurship. On the one hand, the social enterprise school highlights “the importance of nonprofits freeing themselves from reliance on government and philanthropic support and achieving sustainability through revenue-producing business activities” (Worth, 2020, p. 446). In other words, this approach stipulates that market-based activities and processes can help solve any social problem. On the other hand, the social innovation school emphasizes achieving social outcomes through innovation and transformational approaches (Worth, 2020). This articulation reveals that the given approach does not prioritize obtaining earned income but is not excluded.
According to the information above, I believe that the social innovation school of thought offers a more satisfactory definition of social entrepreneurship. It seems that revenue generation is the secondary objective because the leading goal is to promote social change. Consequently, entrepreneurs should identify opportunities, find innovative approaches, and take specific actions to bring positive outcomes. Thus, I am sure that the selected school perfectly describes the term under consideration.
Philanthropy and Government Efforts
When there is a task to promote economic development and reduce poverty, both government and philanthropy involvement can contribute. It is now rational to analyze the advantages and disadvantages of these activities. Firstly, governmental support is a widespread financial source for nonprofit organizations. On the one hand, this approach is advantageous for nonprofits because governments are typically concerned with addressing current social and economic issues. That is why federal, state, and local agencies tend to allocate financial resources to allow organizations to solve the problems. On the other hand, this approach implies significant disadvantages for nonprofits. Since the number of such organizations keeps increasing, it is challenging for them to compete with others and obtain governmental funds (Worth, 2020). Furthermore, governments typically offer resources for specific purposes, denoting that companies that have obtained funds are limited in choosing what social change should be promoted. Nonprofits should consider these positive and adverse characteristics while relying on governmental funding.
Secondly, philanthropy is another popular source of funds for nonprofits, and it also implies advantages and disadvantages. A positive aspect refers to the fact that a growing number of organizations have started relying on private giving (Worth, 2020). In addition, philanthropy provides nonprofits with relative freedom because these organizations obtain money and are free to decide what issues they will address. Such a strategy brings flexibility to the field, which ensures that versatile problems are addressed. However, the given funding source implies particular drawbacks that deserve attention. Private giving can be subject to taxes, and not all nonprofit organizations are aware of legislation governing this sphere (Worth, 2020). That is why many nonprofits tend to refuse to obtain private gifts to avoid legal issues in the future. These pros and cons define the reliance on philanthropy resources.
One cannot stipulate which approach is better for nonprofit organizations. The rationale behind this statement is that the two options imply advantages and disadvantages, denoting that government assistance can be appropriate for some organizations while others can benefit from philanthropy. This description demonstrates that nonprofits should not limit themselves to a single source of funding while an optimal approach would be to unite them. Such organizations will reckon on two-fold benefits in this case. On the one hand, governmental assistance can provide nonprofits with resources to address the most acute issues. On the other hand, private gifts will allow these organizations to diversify their activities and respond to unexpected challenges. Consequently, one can state that private and government efforts should be combined.
Conclusion
The paper has demonstrated that social entrepreneurship is a significant phenomenon in the present world because it contributes to positive consequences. However, experts have not reached a consensus, and the social innovation school of thought offers a more satisfactory definition. This approach denotes that social entrepreneurship aims at achieving social outcomes through innovation and transformational strategies. In addition, sufficient attention has been drawn to governmental and private funding sources. Each of them implies specific advantages and disadvantages, denoting that it is impossible to claim which approach is better. A suitable strategy is to rely on the combination of the two because philanthropy and governmental assistance can provide nonprofits with improved opportunities to address current issues. In this case, these organizations will have sufficient resources to solve acute and topical problems.
Reference
Worth, M. J. (2020). Nonprofit management: Principles and practice (6th ed.). SAGE Publications, Inc.