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Monday, August 2, 2010

Social Entrepreneurship: Concepts and Implications for Problem Solving

Scott J. Jackson
Reference Assistant

Glennon J. Harrison
Specialist in Industry Policy

As part of the reauthorization of the National and Community Service Act of 1990, the Edward M. Kennedy Serve America Act (P.L. 111-13) established a Social Innovation Fund (SIF) to invest in social entrepreneurs and other non-profit community organizations in the United States. The intent of the legislation is to provide funding that will enable individuals and organizations to develop "innovative and effective solutions to national and local challenges." The law requires that federal funds be matched on a one-for-one basis by the grant-making organizations and on a one-for-one basis by sub-grantees (i.e., the community organizations). This match is designed to leverage Federal investment with funding from private and other sources. In FY2010, $50 million was appropriated to the SIF and, for FY2011, $60 million has been requested in the President's budget. Concurrently, the Obama administration created the White House Office of Social Innovation and Civic Participation, under the Domestic Policy Council which, among other things, seeks to encourage social innovation and support community solutions. Other legislative and government initiatives—such as H.R. 5191, S. 1425, and H.R. 5533—have similarly incorporated "social entrepreneurship" and "social innovation" into efforts to address such issues as economic opportunity, education, and international development.

"Social entrepreneurship" describes the efforts of highly motivated individuals and organizations to solve economic and social problems for the benefit of society in general through the use of business methods and innovative strategies. These solutions are the result of the application of new resources or new combinations of existing resources and of the mobilization of diverse funding mechanisms which increase the sustainability, quality, and scalability of social enterprises. Interest and involvement in this model have grown substantially over the past thirty to forty years among development organizations, the nonprofit sector, universities, and governments around the world. However, the evidence and research base is lagging. As a result of a number of factors, proponents of social entrepreneurship have adopted differing definitions of the term—sometimes depending on their audience. One major issue is the lack of common understanding of definitions and a statistical base for measuring achievement. The field frequently relies on anecdotal evidence rather than empirical data.

This report provides an overview and analysis of the differing interpretations of social entrepreneurship, provides a review and discussion of its contributions, examines some case studies, and details recent legislation, as well as legislative proposals and legislative options.

Date of Report: July 29, 2010
Number of Pages: 20
Order Number: R41348
Price: $29.95

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