The most successful business ideas, products and services were often inspired by the need to solve a problem. This approach is used by social entrepreneurs who find opportunities to build sustainable businesses that address the specific needs of their community and drive economic growth in historically disinvested neighborhoods.
Sometimes social entrepreneurs are confused with nonprofit organizations, but social entrepreneurship can be a nonprofit, for-profit, or hybrid endeavor that places a greater emphasis on creating positive social or environmental changes. These entrepreneurs prioritize impact over profits.
Social entrepreneurs generally share four characteristics:
The beginning of social entrepreneurship could be traced to the 1980s with the emergence of cause-related marketing. Businesses realized customers and potential customers cared about environmental, health, education, and other social causes. They began publicly supporting these causes to increase customer loyalty and attract new customers.
An oversaturation of cause-related marketing campaigns that lacked authenticity sparked a backlash that created an opportunity for professionals truly interested in driving social and environmental change.
The social enterprise sector has grown significantly over the past decade. A career that didn’t formally exist a generation ago is becoming an increasingly popular degree option and career path. The opportunity to use traditional business skills to address specific problems and revitalize communities attracts many entrepreneurs who increasingly seek more than a paycheck from their career.
As the private sector struggles to adapt to changes driven by racial inequality, COVID-19, and countless other social challenges, it’s apparent that the social entrepreneurship business model is here to stay. Social entrepreneurship works and a new wave of entrepreneurs are proving they can improve their communities by building sustainable social enterprises.
In Baltimore, social entrepreneurship holds the potential to reduce neighborhood and racial wealth inequality by empowering entrepreneurs to build and own successful businesses that invest back into their communities and create sustainable neighborhood economies.
Many barriers prevent individuals living in economically distressed communities from upward economic mobility, but entrepreneurship is a proven alternate route that can help close the wealth gap. Entrepreneurs often create small businesses that contribute to a thriving neighborhood community. Supporting minority entrepreneurs, especially those leading social enterprises, is vital to drive economic progress in neighborhoods and increase the quality of life for residents.
Innovation Works supports neighborhood economic development through the determined efforts of social entrepreneurs leading impact-driven businesses throughout the city. Innovation Works sees a unique opportunity to tackle the racial and neighborhood wealth divide by accelerating the rate of economic mobility and healthy communities for Baltimore’s most vulnerable.
With the launch of Ignite Capital in Spring 2020, IW made vital progress toward our goal of identifying and supporting local social enterprises that are committed to creating a better future for low-income communities and communities of color. The fund is designed to empower people of color and low-income individuals, spur hyper-local economic activity, and elevate historically under-resourced neighborhood economies.