The tagline for this blog reads confluence of social startups & civil organizations in India. Before I outline what this blog will be about, it behooves one to define some relevant terms. At the risk of sounding redundant, I’ve included definitions from multiple sources.
Social enterprises (broad definition): Social enterprises are social mission driven organizations which apply market-based strategies to achieve a social purpose. Whereas a business entrepreneur typically measures performance in profit and return, a social entrepreneur assesses success in terms of the impact on society. Social enterprises are for ‘more-than-profit’, using blended value business models that combine a revenue generating business with a social-value-generating structure or component.
Social enterprises (in India): A social enterprise may be structured in 3 different ways: (1) A non-profit Non-Governmental Organization (NGO), often registered as a Society under Indian Societies Registration Act, 1860, (2) A Trust registered under various Indian State Trust Acts or, (3) A Section 25 Company registered under Indian Companies Act, 1956.
Social enterprise vs social startup: A social startup is essentially the same as a social enterprise registered as a Section 25 Company. The “startup” term is preferred by the more ‘hip’ generation inspired by the mother of all startup ecosystems – Silicon Valley.
Bottom of Pyramid (BOP): In economics, the bottom of the pyramid is the largest but poorest socio-economic group. In global terms, this is the 2.5 billion people who live on less than $2.50 a day. The most current usage of BOP was defined by Professors C.K. Prahalad and Stuart Hart and subsequently expanded upon by both in their books: The Fortune at the Bottom of the Pyramid by Prahalad in 2004 and Capitalism at the Crossroads by Hart in 2005. [Related post: The various connotations and implications of BOP (Bottom of Pyramid)]
NGOs (Non-Governmental Organizations) and NPOs (Non-Profit Organizations): NGOs are defined by the World Bank as private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development. The NGO moniker is more widely used in India and Australia while the NPO moniker is more a US specific term.
SBOs and CSOs: There’s growing movement within the NGO/NPO sector to define itself in a more constructive way (as opposed to the current negation/”not” this moniker). The alternative names that have emerged are: SBO (Social Benefit Organization), Civil Society Organization (CSO), and Citizen Sector Organization (CSO). Some have argued that CSO is not particularly helpful, given that most NGOs are in fact funded by governments and/or profit-driven businesses and that some NGOs are clearly hostile to independently organized people’s organizations. The term “social benefit organization” seems to avoid that problem, since it does not assume any particular structure, but rather focuses on the organization’s mission.
What this blog intends to cover: According to this 2008 study published on OneWorld.net, there are an estimated 3.3 million active non-governmental, not-for-profit organizations in India. This represents an NGO for every 400 Indians or, put in a different way, more NGOs in India than schools and health centers. There are no reliable statistics available yet on social enterprises. It’s safe to assume that the total number of social enterprises is significantly lower than 3.3 million. But, anecdotal data suggests that the social enterprises sector is definitely growing faster than the NGO sector. Against the backdrop of a burgeoning Indian economy, NGOs are increasingly under pressure to become more “self-sustaining” and not be overly reliantÂ on philanthropic grants – be it from the government, corporate or high net worth individuals. Some NGO’s are also morphing themselves into two distinct (but closely related) entities – retaining the NGO identity and creating a new social enterprise entity which isn’t limited by the tax burden of being an NGO.
It is the intent of this blog to cover both social enterprises and CSOs/NGOs, the main criteria being impact and potential.