Lucas Lin
Thomas Jefferson High School for Science and Technology
Alexandria, VA
11th Grade
3rd Place, Virginia
 

Social Entrepreneurship: Reifying the American Dream


     Our nation’s history is saturated with the notion of entrepreneurship, from Henry Ford’s Industrial Age breakthrough of the assembly line to Steve Jobs’ modern transformation of the handheld mobile device industry. This spirit intertwines with the American Dream to form the foundation of our country. Entrepreneurial sentiment has propelled the development of the business sector for a long time, and now our contemporaries are beginning to apply this ethic for a social purpose. The definitive difference between business entrepreneurship and social entrepreneurship lies in objectives. While business entrepreneurs strive to create profit for shareholders with innovative ideas, social entrepreneurs use wealth and adaptive thought to create change in current social injustices through a variety of mediums including non-profit, for-profit, and hybrid organizations. The focused purpose of creating lasting change as opposed to a monetary incentive gives social entrepreneurs the unique ability to actuate significant improvements to American lives and rekindle the American Dream for marginalized populations within the next decade. 

     The effects of social entrepreneurship will eclipse that of business entrepreneurship primarily due to motivation. The drive to cause a difference gives social entrepreneurs an advantage in effectiveness as change-makers in the society. According to business thinker Daniel Pink in his New York Times bestseller Drive: The Surprising Truth About What Motivates Us, the extrinsic profit motivation of business entrepreneurs actually hinders decision-making and creativity; in contrast, the intrinsic stimulus of “purpose maximization”1 that social entrepreneurship uses sets a clear goal and increases creativity. Additionally, the traditional entrepreneurial mindset takes advantage of a receptive market in order to generate new ideas and products for profit, whereas the social entrepreneurial mindset prioritizes disadvantaged populations who lack the financial means to benefit from business entrepreneurs. By specifically aiming to benefit marginalized populations, social entrepreneurship supports those who are incapable of a solid life instead of merely giving more advantages to those who are well off like business entrepreneurs do. This means that not only do social entrepreneurial ventures drive the needed social change, but they also are usually more enthused and include more pioneering thought when compared to business entrepreneurs. 

     It is not as if business entrepreneurship fails to create any meaningful change; on the other hand, business entrepreneurship is responsible for the speeding up of innovation, increase in efficiency, and profusion of new products on the market, and all together, these effects play a critical role in the growth of the United States economy. However, simply promoting economic growth is insufficient to generate substantial improvements in life for the majority of Americans. Since the 1970s, the United States has witnessed a decoupling of economic growth from poverty alleviation2, and because of the capitalist structure of our economy, the improvements that regular business entrepreneurship bring usually involve the rich obtaining more money with only a slight possibility for the trickle-down of wealth. Thus, social entrepreneurship, through effectively targeting the root issues of social injustice such as income inequality, poor education, and lack of health care of marginalized groups, will more effectively galvanize positive change for those who actually need it in the United States. 

     Though America was founded upon principles that eschewed class stratification, income inequality has squashed the opportunity for social mobility and effectively poisoned the American Dream. Unfortunately, the United States ranks number one among developed countries in income inequality and number five in terms of poverty rate among the Organization for Economic Cooperation and Development countries.3 Furthermore, according to a survey done by The Associated Press, 79% of Americans suffer from economic insecurity, defined by joblessness, dependence on government aid, and income near the poverty threshold.4 Nevertheless, social entrepreneurs are striking back at the income gap, attempting to alter the cycles of poverty such that low-income individuals can take back control of their lives, and these endeavors are starting to trigger change. 

     One notable local example of a successful social entrepreneurial venture that combats this problem resides in Charlottesville, Virginia. Local business owner Toan Nguyen dreamed of making conditions better for other people, to impact businesses more than making money, so he created the Community Investment Collaborative (CIC) to help low-income individuals successfully create their own businesses. Both a microfinancing and business education project, the CIC gives the needed push, monetarily and intellectually, for struggling entrepreneurs. Because banks routinely decline loaning money to low-income clients due to various risks involved, the poor frequently could only rely on lenders who practice usury. In addition to the CIC, Mr. Nguyen also founded C’ville Central, another social entrepreneurial venture aimed at helping small business owners with management and marketing.5 Both of Toan Nguyen’s initiatives have seen remarkable success, supporting tens of local businesses and getting ready to take on larger contracts, proving the ability for social entrepreneurship projects to grow and see a larger sphere of influence. 

     As both a component of income inequality and as a separate issue, education gaps in America, particularly between income and racial lines, must also be addressed when referring to social improvement within the United States. A study by sociology professor Sean F. Reardon of Stanford University discovered that standardized test score differences between wealthy and underprivileged students have grown 40% since twenty-five years ago.6 Additionally, there is a stark contrast in salary levels between individuals with a college education and those without, meaning the currently dysfunctional education system perpetuates adversity for low-income families and minorities. 

     Reforming education would go a long way towards improving life for America’s marginalized populations as education lies at the root of many social ailments, and social entrepreneurs have the will and capabilities to endeavor and triumph. In contrast, current educational spending by the government has increased in the last few decades, but performance from our schools have languished. The revolutionary ideas envisioned by social entrepreneurs have already seen impact in local communities across the United States. Steven Barr, CEO of Green Dot Public Schools in Los Angeles, remodeled his school system to focus on personalized learning, college exposure, and family involvement, which caused his schools to drastically improve performance.7 Wendy Kopp founded Teach For America, a program that incentivizes teaching in high-poverty communities for the most promising college graduates, resulting in an increase of quality educators dedicated to low-income students.8 Lastly, College Summit, a non-profit organization established and run by social entrepreneur and U.S. Ashoka Fellow J.B. Schramm, seeks to empower underprivileged students with the knowledge and mindset to enter college. With the organization’s efforts so far, 79% of low-income College Summit students have enrolled in college, a profound amount compared to the national average of 46%.9 The results of social entrepreneurship are slowly causing an equalization of education opportunities for marginalized population and with it, the foundation for further success and a better life. 

     When considering the physical welfare of human beings, health care access is arguably more important than income and education. Despite current laws prohibiting hospitals from turning away uninsured patients with emergency medical conditions, many hospitals try to exploit loopholes. For the sake of making more profit, hospitals are using entrepreneurial tactics to the detriment of the uninsured, such as relocating facilities to wealthier areas10 and transferring patients to public hospitals even in medical emergencies11, and consequently sacrificing the low-income and jobless Americans who fall in this category. Yet, social entrepreneurs are fighting this battle as well. In 1996, Dr. Williams S. Barnes founded the Shepherd’s Hope Health Center, created solely for the purpose of seeing uninsured, low-income patients. A decade later, Shepherd’s Hope has grown to four clinics and serves patients under 200% of the poverty level, having provided a total of over 170,000 free visits and supplied no-cost prescription medications.12 With the actions of social entrepreneurs like Dr. Barnes, the underprivileged can slowly gain access to health care, which constitutes a human right necessary for a decent quality of life. 

     Around two centuries ago, both the American Dream and the entrepreneurial spirit of our then nascent country blossomed, but since then, the Dream has become harder to achieve for our nation as a whole due to social injustice. Nevertheless, the coming decade will see the same mentality that spurred Henry Ford’s vision of the inexpensive, ubiquitous automobile and Steve Job’s revolution of the mobile and music industries reify the American Dream for the underprivileged and change their lives through the purpose-driven social entrepreneurship, which the profit-driven business entrepreneurship cannot sufficiently achieve. 


Endnotes

  1. Daniel H. Pink, Drive: The Surprising Truth About What Motivates Us (New York: Penguin Group, 2009), 26
  2. Economic Policy Institute, “Poverty.” http://stateofworkingamerica.org/fact-sheets/poverty/ (last accessed 6 November 2013).
  3. “Inequality in America: The Data Is Sobering,” New York Times, 30 July 2013, B1. http://www.nytimes.com/2013/07/31/business/economy/in-us-an-inequality-gap-of-sobering-breadth.html?_r=1& (last accessed 6 November 2013)
  4. “4 in 5 in USA face near-poverty, no work,” USA Today, 17 September 2013. http://www.usatoday.com/story/money/business/2013/07/28/americans-poverty-no-work/2594203/ (last accessed 6 November 2013)
  5. “Can social entrepreneurs close the local income gap? Toan Nguyen thinks so,” C-ville Weekly, 3 September 2013. http://www.c-ville.com/can-social-entrepreneurs-close-the-local-income-gap-toan-nguyen-thinks-so/ (last accessed 6 November 2013)
  6. “Education Gap Grows Between Rich and Poor, Studies Say,” New York Times, 9 February 2012. http://www.nytimes.com/2012/02/10/education/education-gap-grows-between-rich-and-poor-studies-show.html (last accessed 6 November 2013)
  7. Green Dot Public Schools, “The Green Dot Difference.” http://www.greendot.org/page.cfm?p=1649 (last accessed 6 November 2013)
  8. Steven Barr, Kevin Johnson, Wendy Kopp and Michelle Rhee, “The Role of Social Entrepreneurship in Transforming U.S.A. Public Education.” 14 October 2008. http://www.hbs.edu/centennial/businesssummit/business-society/the-role-of-social-entrepreneurship-in-transforming-usa-public-education-2.html (last accessed 6 November 2013)
  9. Noga Leviner, Leslie R. Crutchfield and Diana Wells, “Understanding the Impact of Social Entrepreneurs: Ashoka’s Answer to the Challenge of Measuring Effectiveness,” Research on Social Entrepreneurship: Understanding and Contributing to an Emerging Field. (Indianapolis: ARNOVA, 2006), 94
  10. “City Hospitals Moving Away from the Poor,” 219 Magazine, 16 May 2009. http://www.219mag.com/2009/05/16/city-hospitals-moving-away-from-poor/ (last accessed 6 November 2013)
  11. “Uninsured Americans Still At Risk For Getting Turned Away By Hospitals,” Medical News Today, 9 August 2012. http://www.medicalnewstoday.com/articles/248854.php (last accessed 6 November 2013)
  12. Shepherd’s Hope, “Our Story.” http://shepherdshope.org/our-story/ (last accessed 6 November 2013)