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Foundations of Social Entrepreneurship
Foundations of Social Entrepreneurship presents defnitions of social entrepreneurship,

explains its benefts and challenges, describes the components of an ecosystem of
support, and presents practical tools to approach social entrepreneurial projects. It
is designed to be easily approachable by anyone without prior in-depth knowledge
of the subject. The book is divided into two parts; the frst provides readers with
theoretical foundations to understand the phenomenon of social entrepreneurship, its
different interpretations, the context in which it developed, and its socio-economic
function. The second part of the book covers what it takes to create and manage a
social entrepreneurial initiative. Pedagogical features are incorporated throughout to
aid learning. They include summary tables, international case studies of social entre-
preneurs from both developed and emerging economies, as well as suggested exercises
and examples of how the tools presented are used in practice. Truly global in its
scope, with a strong emphasis on combining theory with practice, this text should be
core reading for advanced undergraduate and postgraduate students studying Social
Entrepreneurship, Enterprise, and Responsible Business. Online resources include
links to resources, chapter-by-chapter PowerPoint slides and instructor’s manual.
Tanja Collavo is Senior Teaching Associate at the Cambridge Institute for

Sustainability Leadership, where she acts as director of the Master of Studies (MSt)
in Sustainability Leadership, fexible route and of the Postgraduate Diploma in Sus-
tainable Business.
Foundations of Social
Entrepreneurship
Theory, Practical Tools and Skills
Tanja Collavo
Cover image: Getty Images
First published 2023
by Routledge
4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2023 Tanja Collavo
The right of Tanja Collavo to be identifed as author of this work has been
asserted in accordance with sections 77 and 78 of the Copyright, Designs and
Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in writing from the
publishers.
Trademark notice: Product or corporate names may be trademarks or registered
trademarks, and are used only for identifcation and explanation without intent
to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Collavo, Tanja, 1988– author.
Title: Foundations of social entrepreneurship : theory, practical tools and
skills / Tanja Collavo.
Description: Milton Park, Abingdon, Oxon ; New York, NY : Routledge, 2023. |
Includes bibliographical references and index. |
Identifers: LCCN 2022023284 (print) | LCCN 2022023285 (ebook) | ISBN
9780367640217 (hardback) | ISBN 9780367640231 (paperback) | ISBN
9781003121824 (ebook)
Subjects: LCSH: Social entrepreneurship. | Social values—Economic aspects.
Classifcation: LCC HD60 .C589 2023 (print) | LCC HD60 (ebook) | DDC
658.4/08—dc23/eng/20220531
LC record available at https://lccn.loc.gov/2022023284
LC ebook record available at https://lccn.loc.gov/2022023285
ISBN: 978-0-367-64021-7 (hbk)

ISBN: 978-0-367-64023-1 (pbk)
ISBN: 978-1-003-12182-4 (ebk)
DOI: 10.4324/9781003121824
Typeset in Sabon
by codeMantra
Access the Support Material: www.routledge.com/9780367640231
Contents
List of figures xi
List of tables xiii
About the author xv
Acknowledgements xvii
Introduction 1
PART 1
Theoretical foundations of social entrepreneurship 5
1 Introduction to social entrepreneurship 7

1.1 A first glimpse into social entrepreneurship 7
1.2 Historic and global overview 9
1.2.1 Social entrepreneurship as an activity 9
1.2.2 Social entrepreneurship as a concept 10
1.2.3 The trends behind the rise of social entrepreneurship 12
1.3 The many definitions of social entrepreneurship 14
1.3.1 The Innovation School of Thought 14
1.3.2 The Business School of Thought 15
1.3.3 The Community School of Thought 16
1.3.4 Additional definitions of social entrepreneurship intersecting
multiple schools of thought 17
1.4 This book’s definition of social entrepreneurship 19
Summary box 22
Check box – Self-reflection and discussion questions 23
Exercises 23
2 Social entrepreneurship and social change 25

2.1 Social change, social innovation, and social impact 25
2.1.1 Social change 25
2.1.2 Social innovation 27
2.1.2.1 Digital innovation 28
2.1.2.2 Frugal innovation 29
2.1.3 Social impact 30
vi Contents
2.2 Distinguishing social entrepreneurship from related activities and
organisational forms 32
2.2.1 Social entrepreneurship and traditional entrepreneurship 33
2.2.2 Social entrepreneurship and charities 34
2.2.3 Social entrepreneurship and social movements 35
2.2.4 Social entrepreneurship and its close relatives: Fair Trade
Organisations, B Corps, and Corporate Social Responsibility 36
2.3 The roles of social entrepreneurship in society 37
Summary box 40
Exercises 41
3 Characteristics of social entrepreneurship 45

3.1 Portrait of a social entrepreneur 45
3.1.1 Motivation of social entrepreneurs 45
3.1.2 Personality of social entrepreneurs 46
3.1.3 Skills of social entrepreneurs 47
3.1.4 Challenges for social entrepreneurs 49
3.2 Portrait of a social enterprise 52
3.2.1 Social business models for social enterprises 53
3.2.2 Options to connect impact and revenues for social enterprises 53
3.2.3 Legal forms for social enterprises 54
3.2.4 Governance of social enterprises 56
3.3 Social entrepreneurship’s sectors of operation 60
Summary box 61
Exercises 62
4 The social entrepreneurship ecosystem 64

4.1 Ecosystems – what they are and why they matter 64
4.2 The stakeholders of social entrepreneurship ecosystems 66
4.2.1 Intermediaries 67
4.2.2 Public authorities 69
4.2.3 Funders 71
4.2.3.1 Traditional funders 71
4.2.3.2 New funders 72
4.2.4 Universities and other training providers 75
4.2.5 Incubators and accelerators 76
4.2.6 Businesses 76
4.3 Environmental forces affecting social entrepreneurship ecosystems 77
4.4 Differences in social entrepreneurship ecosystems 79
Summary box 81
Exercises 82
Contents vii
5 The present and future of social entrepreneurship 86
5.1 The achievements of social entrepreneurship 86
5.2 Limitations of social entrepreneurship and ongoing challenges for
social entrepreneurial organisations 88
5.3 Sustaining the development of social entrepreneurship 92
5.4 The way forward for social entrepreneurship – systems change 93
5.4.1 Defining systems 93
5.4.2 Analysing a system 95
5.4.3 Introduction to systems thinking 99
5.4.4 Introduction to systems leadership 100
Summary box 104
Exercises 105
PART 2
Practical foundations of social entrepreneurship 109
6 Identifying an opportunity for social entrepreneurship 111

6.1 The importance of gathering knowledge 111
6.2 Understanding the status quo 112
6.2.1 Creating a codebook 113
6.2.2 Creating a mind map 116
6.3 Learning about existing competitors, solutions, and the context 119
6.3.1 Running a competitive analysis 120
6.3.2 Analysing the solutions’ landscape 122
6.3.3 Analysing the context 123
6.4 Identifying the right idea to develop 124
Summary box 125
Exercises 127
7 Developing a social entrepreneurial idea 128

7.1 Developing ideas through Design Thinking 128
7.1.1 The foundations of Design Thinking 129
7.1.2 The process of Design Thinking 130
7.1.3 The strengths and limitations of Design Thinking 132
7.2 Translating an idea into a narrative – the importance of a mission
statement 134
7.2.1 The mission statement 135
7.2.2 Developing a mission statement 137
7.3 Elaborating on the existing opportunity through the Theory of
Change 137
7.3.1 The components of a Theory of Change 138
viii Contents
7.3.2 How to build a Theory of Change 141
7.3.3 The benefits and risks of the Theory of Change 145
Summary box 147
Exercises 148
8 From developing to implementing a social entrepreneurial idea 151

8.1 From theory to practice – the importance of business models 151
8.1.1 Business models 152
8.1.2 Social business models 153
8.1.2.1 Archetypes and characteristics of social business models 154
8.1.2.2 Characteristics of strong social business models 155
8.2 The social business model canvas 156
8.2.1 How to build a social business model canvas 157
8.3 Marketing fundamentals for social entrepreneurial organisations 160
8.3.1 The practice of marketing 162
8.3.1.1 Segmentation and targeting 162
8.3.1.2 The marketing 7Ps 163
8.3.2 Basics of digital marketing 166
8.3.3 Using marketing in social entrepreneurship – the importance
of ethics 168
Summary box 169
Exercises 170
9 Creating strong foundations for social entrepreneurial organisations 173

9.1 The birth of a social entrepreneurial organisation 173
9.2 Legal form and governance structures 174
9.3 Organisational structure 177
9.4 Leadership styles 178
9.5 Human Resource Management 180
9.5.1 Human Resource Management practices for employees 181
9.5.2 Human Resource Management practices for volunteers and
interns 183
9.6 Organisational culture 184
9.7 Organisational ethics 185
Summary box 189
Exercises 190
10 Funding and growing social entrepreneurial organisations 192

10.1 Funding social entrepreneurial organisations 192
10.1.1 The challenges of funding social entrepreneurial organisations 193
10.1.2 Funding options and their advantages and disadvantages 194
10.1.3 Finding the right funding mix 198
Contents ix
10.2 Managing networks and risks 201
10.2.1 Managing networks 201
10.2.2 Managing risks 202
10.3 Managing growth and scaling impact 203
Summary box 208
Exercises 209
11 Measuring impact 211

11.1 The what and why of impact measurement 211
11.2 The challenges of impact measurement for social entrepreneurial
organisations 213
11.3 The main approaches to measure impact 214
11.3.1 Social Return on Investment 215
11.3.2 B Impact Assessment 218
11.3.3 Balanced Scorecard 219
11.3.4 Impact measurement approaches derived from practices in
economic development 220
11.3.5 Impact measurement approaches derived from sustainable
business 222
11.3.6 Simplified tools to measure impact and approaches used by
funders of social entrepreneurial organisations 223
11.4 Understanding what to measure and how 224
11.4.1 Selecting metrics 224
11.4.2 Establishing an impact measurement system and measuring
impact 225
11.5 Reporting Impact 228
Summary box 229
Exercises 230
Appendix – Case study: Mayamiko 233

Glossary 242
Bibliography 253
Index 273
Figures
1.1 The location of social entrepreneurship in relation to traditional sectors 9

2.1 Social entrepreneurship in relation to social change 26
2.2 Social entrepreneurship in relation to social change and
social innovation 28
2.3 Social entrepreneurship in relation to social change, social
innovation, and social impact 32
2.4 Social entrepreneurship and related activities 33
2.5 Social entrepreneurship and all related concepts
discussed in the chapter 37
3.1 Portrait of a social entrepreneur 51
3.2 Options to connect impact and revenues
(adapted from Alter, 2007, p. 18) 54
3.3 Portrait of a social enterprise 58
4.1 The social entrepreneurship ecosystem 66
4.2 The functioning of Social Impact Bonds 74
4.3 The environmental forces shaping social entrepreneurship 78
5.1 Persona involved in the issue of deforestation – member
of the Waiapi tribe 98
5.2 The iceberg model of deforestation 98
5.3 Feedback loops impacting illegal logging and, through it, deforestation 99
6.1 Gender inequality in Italy 118
6.2 Zoom in on the section about teenage girls, within the mind map
on Gender Inequality in Italy 119
6.3 Porter’s Five Forces (adapted from Porter, 1979, p. 141) 120
6.4 SWOT matrix 121
6.5 Framework for the analysis of a solutions’ landscape 122
7.1 The Theory of Change represented as a logic model 138
7.2 More detailed illustration of a Theory of Change as represented by
a logic model 140
7.3 Illustration of how to build a Theory of Change 141
7.4 Example of a Theory of Change 144
8.1 The social business model canvas (inspired by the work of the
Social Innovation Lab, of the business model canvas originally
developed by Strategyzer) 156
8.2 Example of social business model canvas 160
8.3 The role of marketing 161
11.1 How to choose the metrics to measure impact 226
Tables
1.1 Different schools of thought 18

1.2 Most well-known defnitions of social entrepreneurship 20
3.1 Roles, personality traits and skills of successful social entrepreneurs 48
4.1 Key stakeholders of social entrepreneurship ecosystems and their roles 66
4.2 Main characteristics of ecosystems at different stages of development 80
5.1 Challenges for social entrepreneurial organisations in Kenya and the UK 90
5.2 Main achievements and challenges of social entrepreneurship 92
5.3 Stakeholders in a system and how to approach them 95
5.4 Stakeholders involved in deforestation 97
5.5 Characteristics and activities enabling systems leadership 101
6.1 Matrix for a SWOT analysis of a solutions’ landscape 123
10.1 Key funding options for social entrepreneurial organisations 194
10.2 Spectrum of most common funding options used by social
entrepreneurial organisations 199
10.3 Issues and risks associated with organisational growth 204
11.1 The main approaches for impact measurement 216
11.2 Example of Balanced Scorecard metrics for social enterprises
(adapted from Mamabolo & Myres, 2020, p. 80) 220
11.3 Examples of metrics of operations-driven and value
proposition-driven impact 225
About the author
Tanja Collavo is Senior Teaching Associate at the Cambridge Institute for Sustain-
ability Leadership, where she acts as director of the Postgraduate Diploma and
Master of Studies (MSt) in Sustainability Leadership, Flexible Route. Since 2017,
she has been a tutor for the course on Social Entrepreneurship delivered by the
University of Oxford, Department of Continuing Education, through which she
has tutored over 500 aspiring social entrepreneurs and people of various ages and
from various backgrounds interested in learning more about social entrepreneur-
ship. Previously, she has worked as stipendiary lecturer in general management
for Jesus College and Exeter College, University of Oxford, and has supported the
teaching of various subjects including strategy, leadership, and rethinking business
to undergraduate and MBA students at Saïd Business School, University of Oxford.
She has completed a PhD in Management Studies at Saïd Business School in
2018, with a thesis on the brokerage strategies that enabled four organisations
to develop the social entrepreneurship sector in England. After her PhD, she con-
tinued her research in social entrepreneurship and social innovation as research
assistant at the Skoll Centre for Social Entrepreneurship, Saïd Business School, and
attempted the co-foundation of a social enterprise. Her research interests include
social entrepreneurship, stakeholders’ management, and networking strategies to
foster multidisciplinary and multi-sector collaborations.
She has published journal articles on social entrepreneurship in the Journal of
Entrepreneurship, Management and Innovation and in the New College Collec-
tion, and she co-authored with Prof Alex Nicholls a book chapter on the same
topic for the Atlas of Social Innovation. She also presented her research at inter-
national conferences such as the Academic of Management Annual Meeting and
the Annual Conference on Social Entrepreneurship and she is working on the
publication of a journal article and on a book on collaborations.
Acknowledgements
This book would not exist without the precious support and inspiration provided by
my students. In my work as tutor and lecturer I have had the privilege to interact with
many bright and curious students, whose questions and contributions have kept on
refning my understanding of social entrepreneurship and have given me the motiva-
tion and determination to write this book. I wish I could thank each of them individ-
ually – this book is for them and for those who will come after them.
I also would like to thank Paola Masperi, for the support and access given to build
the case study on Mayamiko, and Goya Gallagher, for the support and access given
to build the case study on Malaika.
Finally, I would like to thank my partner, Matt Bilyard, and my close friend, Kate
Heathward, for reading signifcant parts of the book and providing me with feedback
from the perspective of someone not familiar with social entrepreneurship, and the
several colleagues – Professor Alex Nicholls, Professor Jaideep Prabhu, Fons van der
Velden, Dr Deborah Anderson, Dr Heli Helanummi-Cole, and Dr Lilia Giugni – who
provided precious expert comments on chapters or sections of this book, and sug-
gested resources and ways to improve them.
Introduction
Tutoring a course on social entrepreneurship for several years has brought to my

attention the knowledge needs of very diverse cohorts of students, comprising people
from all over the world and aged anything in-between 18 and 80. Some of the students
I have had the privilege of tutoring were aspiring social entrepreneurs, keen to learn
the tools of the trade and the social business models they could potentially adopt in
their organisation. Some others were simply interested in learning more about social
entrepreneurship or were looking for inspiration to become social intrapreneurs or
support social entrepreneurs. What they were looking for ranged from a basic under-
standing of social entrepreneurship, to support in setting up their own organisation or
specifc insights on topics such as fundraising or impact measurement. In each of the
countries they came from, which span four continents and various levels of economic
development, social entrepreneurship meant something different and was applied and
supported in different ways. So how to bring and teach something valuable to all of
them, given such diversity?
This book is the result of my answer to that question and of my work as a tutor,
as well as of what I learnt through my now almost decade-long research on social
entrepreneurship and my interaction with many social entrepreneurs and supporters
of social entrepreneurship. It combines all that I learnt in relation to what social
entrepreneurship means, theories about what it should achieve and how it should be
supported, and best practice in relation to creating and managing social entrepreneur-
ial organisations. As such, I hope it will help many more students become passionate
about social entrepreneurship in the years to come and to realise their social entrepre-
neurial ideas and impact goals.
This book targets students and readers from any country and of any age who are
curious and keen to learn more about social entrepreneurship but have relatively lit-
tle experience or prior knowledge of it. In order to support their learning journey,
the book features a mix of theoretical insights, practical examples, and case stud-
ies from all over the world, to see how theory relates to practice, as well as exer-
cises to experience frst-hand and refect further on what is presented in the various
chapters, practical frameworks and tools to engage in social entrepreneurship (e.g. to
spot opportunities, further develop a social entrepreneurial idea, and start the crea-
tion of an organisation that will hopefully deliver positive social or environmental
impact while achieving fnancial sustainability), and open-ended questions to verify
and challenge their understanding of social entrepreneurship. This makes this book
particularly suitable for undergraduate courses on social entrepreneurship and related
concepts, such as social impact and social innovation, or for professionals who are
approaching social entrepreneurship as part of a career change or life-long learning.
DOI: 10.4324/9781003121824-1
2 Introduction
The book is divided into two parts. The frst part provides readers with theoretical
foundations to understand the phenomenon of social entrepreneurship, its different
interpretations, the contexts in which it developed and operates, its socio-economic
functions, and its future prospects. Chapter 1 introduces social entrepreneurship both
as a concept and as an activity, discusses its historical development and its various
defnitions, and specifes how social entrepreneurship is conceptualised in the book.
Chapter 2 introduces and explains concepts that are related to social entrepreneur-
ship, such as social change, social impact, and social innovation, and activities and
organisations that are frequently associated with social entrepreneurship (e.g. tradi-
tional entrepreneurship, charities, B Corps, social movements), explaining how social
entrepreneurship overlaps with and differs from each of them. Chapter 3 discusses
common features attributed to successful social entrepreneurs and the main charac-
teristics of social enterprises, to help students understand how social entrepreneurship
might look like in practice. Chapter 4 introduces the concept of “ecosystem” and
discusses the various stakeholders that are fundamental for social entrepreneurship to
thrive and the roles that they play in relation to it. It also presents the key environmen-
tal forces shaping social entrepreneurship ecosystems around the world and the main
stages of development that social entrepreneurship ecosystems present. Chapter 5
concludes the frst part of the book with some refections on the achievements and
limitations that social entrepreneurship has presented up to date, focusing on recur-
ring challenges that social entrepreneurial organisations have to face and overcome
and on ways in which the development of social entrepreneurship can be sustained
going forward. The chapter fnishes by introducing the concept of systems change,
which is increasingly popular in social entrepreneurship ecosystems, and by explain-
ing the basics of systems analysis, systems thinking, and systems leadership, which are
approaches thought to support the realisation of systems change.
The second part of the book covers practical tools and insights to spot opportuni-
ties for social entrepreneurship, develop a social entrepreneurial idea, and establish
a social entrepreneurial organisation. The goal of this second part is to introduce
readers to what it takes, in practice, to engage in social entrepreneurship, and to
key considerations that aspiring social entrepreneurs need to make to increase their
chance of realising positive social and/or environmental impact and to effectively real-
ise something that can be defned as social entrepreneurship. Chapter 6 discusses the
importance of gathering knowledge to spot opportunities and presents some tools –
codebooks and mind maps – that can help in this regard, as well as tools and frame-
works, such as Porter’s Five Forces, SWOT analysis, PESTEL analysis, and variations
thereof, that can be used for assessing competitors, the landscape of existing solutions,
and the environmental forces at play. Chapter 7 introduces Design Thinking as a pro-
cess that can both support the gathering of knowledge and the development of social
entrepreneurial ideas and solutions, providing an overview of how to conduct it and of
its main advantages and limitations. Additionally, it explains the importance for any
social entrepreneurial organisation to elaborate a mission statement, and how to do
so, and to translate its mission into concrete plans, actions, and, eventually, impact.
For this purpose, the chapter discusses the concept of Theory of Change and how to
build one. Chapter 8 continues the journey began in Chapter 7 by introducing social
business models as a way to plan and strategise how to realise a Theory of Change,
and by explaining how to build a social business model canvas. It then presents
some marketing fundamentals that can help social entrepreneurial organisations to
Introduction 3
attract resources to implement their social business model and to deliver their value
proposition. Chapter 9 discusses the main elements that make up a social entrepre-
neurial organisation – its legal form, governance structures, organisational structure,
leadership style, human resource management, organisational culture, and adherence
to ethics – focusing on the challenges and characteristics related to each of them that
are specifc to organisations wanting to realise social and/or environmental impact
adopting an entrepreneurial and innovative approach. Chapter 10 presents the chal-
lenges that social entrepreneurial organisations face in securing the necessary funds
to operate and the main funding options available to them. It then introduces three
elements that successful social entrepreneurial organisations need to learn how to
manage – networks, risks, and growth – presenting some tools and insights that can
help to manage them. Finally, Chapter 11 discusses impact measurement, refecting
on the challenges it presents, explaining the main approaches used to engage in this
activity in social entrepreneurship ecosystems, and providing some tips on how to
identify helpful metrics, set up an impact measurement system, and report the impact
achieved.
I hope this book will inspire and engage many students and aspiring social
entrepreneurs, and support many social entrepreneurial organisations, providing
them with the knowledge and tools to increase their understanding of social entre-
preneurship and their chances of success in realising social and environmental impact
in innovative ways. In a world characterised by global challenges, a climate crisis,
and wicked problems, social entrepreneurship is needed more than ever, not only to
directly create positive social and environmental impact but also to act as catalysts of
attention, resources, and solutions. I hope you will enjoy the journey and fnd your
own special way to contribute to a more just and inclusive society!
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Foundations of Social Entrepreneurship

Foundations of Social Entrepreneurship presents defnitions of social entrepreneurship,

Tanja Collavo is Senior Teaching Associate at the Cambridge Institute for

ISBN: 978-0-367-64021-7 (hbk)

1 Introduction to social entrepreneurship 7

2 Social entrepreneurship and social change 25

3 Characteristics of social entrepreneurship 45

4 The social entrepreneurship ecosystem 64

6 Identifying an opportunity for social entrepreneurship 111

7 Developing a social entrepreneurial idea 128

8 From developing to implementing a social entrepreneurial idea 151

9 Creating strong foundations for social entrepreneurial organisations 173

10 Funding and growing social entrepreneurial organisations 192

11 Measuring impact 211

Appendix – Case study: Mayamiko 233

1.1 The location of social entrepreneurship in relation to traditional sectors 9

1.1 Different schools of thought 18

Tutoring a course on social entrepreneurship for several years has brought to my

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