Social Entrepreneur

DEFINITION of 'Social Entrepreneur'

A person who pursues an innovative idea with the potential to solve a community problem. These individuals are willing to take on the risk and effort to create positive changes in society through their initiatives.


Examples of social entrepreneurship include microfinance institutions, educational programs, providing banking services in underserved areas and helping children orphaned by epidemic disease. The main goal of a social entrepreneur is not to earn a profit, but to implement widespread improvements in society. However, a social entrepreneur must still be financially savvy to succeed in his or her cause.

BREAKING DOWN 'Social Entrepreneur'

While most entrepreneurs are motivated by the potential to earn a profit, the profit motive does not prevent the ordinary entrepreneur from having a positive impact on society. As Adam Smith explained in "The Wealth of Nations" (1776), "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest." Smith believed that when individuals pursued their own best interests, they would be guided toward decisions that benefited others. The baker, for example, wants to earn a living to support his family. To accomplish this, he produces a product, bread, that feeds and nourishes hundreds of people.

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