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Social entrepreneurship

The concept of social entrepreneurship is applied when dealing with social, economic and
environmental issues in society. The idea began to be expanded in the 1980s on both sides of
the Atlantic. From a geographical perspective, it is divided into American and European schools
of thought. Authors from European business schools (e.g. Mair & Marti, 2006; Nicholls, 2006)
contribute to the discussion and rely on the concept of social entrepreneurship from the point of

view of the American school of thought while supplementing it with a European background
(Defourny & Nyssens, 2012).
According to Nicholls (2006), social entrepreneurship can be considered everything from

volunteer activism, which is founded upon voluntary resources, to entrepreneurial social
innovations that are characterized by risk capital focused on a social mission. These various
models can include different types of non-profit organizations, which range from those fully
financed by grants to those that are fully self-financed. According to Dees (1998), social
entrepreneurship describes a set of exceptional behaviors that should be supported and
rewarded.

Among others, the non-profit organization TESSEA ČR also lists its own definition of social
entrepreneurship as “entrepreneurial activities benefitting society and the environment. Social
entrepreneurship plays an important role in local development and often creates work
opportunities for individuals with health, social or cultural disadvantages. The profit is largely used

for the further development of the social enterprise. Achieving profit is just as important for a social
enterprise as is improving the benefit to the public.” (TESSEA, 2022).

The American School

The idea of social entrepreneurship was elaborated upon in the 1990s in the United States, where
two main directions were identified. On one side is the idea linked to a focus on ensuring financial
resources via own income. This stream of thought is called “earned income”. On the other side is
the direction of thought called “social innovation” (Defourny & Nyssens, 2012).

The first stream of thought regarding social entrepreneurship and social enterprises or “earned
income” deals with the use of the commercial activities of non-profit organizations to support their
missions (Kerlin, 2006). These entities strive to deal with issues concerning their financing, and
they utilize their own commercial profit-generating activities to do so. This profit is subsequently
used to support the social mission of the given entity. The entity’s multi-resource financing is thus
augmented by own income from commercial activities (Defourny & Nyssens, 2012).

The second stream of thought, i.e. “social innovation”, focuses on the personality and behavior of
the social entrepreneur, who is the creator of changes.

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