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Forbes’ Top 30 Social Entrepreneurs List Lacks Social Entrepreneurs

Raz Godelnik
| Wednesday December 7th, 2011 | 7 Comments

Last week Forbes added a new list to its famous collection. It wasn’t about the richest people in Asia, the most powerful women in America or the best companies worldwide, but about the top social entrepreneurs. For the first time in its 94-year history, Forbes assembled the Impact 30: a list of the world’s leading social entrepreneurs.

This was another sign of the growing popularity of social entrepreneurship (if you really needed one), yet there was something a bit strange about this list. While Forbes defined “social entrepreneur” as ‘a person who uses business to solve social issues,’ most of the people of the list didn’t meet this definition.

First, let me be clear – the list is full with wonderful and impressive people, leaders and innovators that are changing the world in a profound way. It’s just that not every one of them can be described as a social entrepreneur. Some of them created non-profit organizations and not businesses to solve social issues, while others created businesses that are mostly dealing with environmental issues, not social ones.

You might wonder if the whole issue of definition is really that important and why shouldn’t we just celebrate the fact that Forbes chose to highlight good people that do a lot of good. Well, definition of social entrepreneurship is important, as Roger Martin and Sally Osberg explain in a 2007 article published on the Stanford Social Innovation Review (Social Entrepreneurship: The Case for Definition):

Although the potential benefits offered by social entrepreneurship are clear to many of those promoting and funding these activities, the actual definition of what social entrepreneurs do to produce this order of magnitude return is less clear… If we can achieve a rigorous definition, then those who support social entrepreneurship can focus their resources on building and strengthening a concrete and identifiable field. Absent that discipline, proponents of social entrepreneurship run the risk of giving the skeptics an ever-expanding target to shoot at, and the cynics even more reason to discount social innovation and those who drive it.

There are many definitions for social entrepreneurs. Ashoka, whose founder and chief executive Bill Drayton was on the panel of experts that helped Forbes to assemble the list, provides for example the following definition: “Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change.”

Forbes’ definition is also a good one – a person who uses business to solve social issues. Yet, among their Impact 30 list I could find only two examples that can fit this description. The first are Sam Goldman and Ned Tozun of D. Light Design, a company that works to replace kerosene lamps with portable and affordable solar lamps, enabling households without reliable electricity to attain the same quality of life as those with electricity. The second is Alvaro Rodríguez Arregui of IGNIA, an impact investing venture capital firm that invests in companies that work to assist the millions of Mexicans who lack decent housing, health care and clean water.

All the rest of the people on this list just don’t fit Forbes’ own description of social entrepreneurs. The majority of them are working in non-profit organizations – Jen Chen of Embrace, Darell Hammond of KaBoom, Sara Horowitz of Freenlancers Union, Jordan Kassalow of VisionSpring and so on. Again, they all do an important job, tackling critical social issues, from providing reasonably priced health insurance to the self-employed (Freelancers Union) to providing affordable reading glasses (VisionSpring), but none of these organizations are for-profit.

Some would claim that non-profits should be an integral part of the social entrepreneurship space, but if Forbes specifically refers to business, then it’s not clear why so many of these people on the list come from the NGO world. Forbes does acknowledge this contradiction, explaining that “some of the people on our list run nonprofits, so the market-based approach doesn’t apply. But we’ve included them anyway, because they’re creating innovative, new solutions to a host of old problems.”

Martin and Osberg described this sort of inclusiveness Forbes is using in their 2007 article as the creation of “an immense tent into which all manner of socially beneficial activities fit,” and explain that too much inclusiveness can jeopardize the fulfillment of the promise behind social entrepreneurship might cause it to fall into disrepute. And anyway, if Forbes doesn’t want to use the definition it gave, why giving it in first place?

Even stranger is the fact that when you do look at the businesses that are on the list, you find that except the two I mentioned, none is involved with social issues. Tom Szaky of TerraCycle, which turns waste into new products, Daniel Yates of Opower, which helps people reduce their energy consumption by providing them home energy reports and Jeff Mendelson of New Leaf paper, a green paper company, are all great entrepreneurs, but they’re clearly focused on environmental issues and not social ones.

Forbes had good intentions, trying to present the efforts of social entrepreneurs that make an impact and should be applauded for their commitment, innovation and ability to provide results. At the same time, we could expect them to be a bit more clear and coherent in choosing their top 30 social entrepreneurs. Hopefully they will continue with this tradition, focusing next time on entrepreneurs that actually use business to solve social issues.

Image credit: jurveston, Flickr Creative Commons

Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is also an adjunct professor in the University of Delaware’s Alfred Lerner College of Business and Economics.


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  • Nick Aster

    It might be a stretch, but perhaps “social entrepreneur” can be thought of as more encompassing than just “social” in the sense that the word “green” gets thrown around a lot in social directions as well. I don’t really bother with the distinction -though I’d prefer to think of all of these things as “triple bottom line” businesses that are conscious of their role in the greater ecosystem, even if their focus may be specifically social or environmental or even just financial.

  • http://www.givetogetjobs.com Stacy McCoy

    I’m with Nick. We use social enterprise in a more inclusive way and our Social Enterprise Database includes organizations that are more environmental than social. At the end of the day, environmental in some ways is inherently social. Some terms such as more-than-profit might be a better term than social enterprise. But social enterprise is much more widely known and accepted. And it helps to have one term when you’re trying to spread awareness and bring more people into this space. So even thought it isn’t perfect, I still think social enterprise is a useful term and can be used to discuss the whole gray area in between the non-profit and for-profit sectors. Also, some of those non-profits in the list I believe use a sustainable business model in lieu of relying solely on donations + gifts.

  • Christina

    Well said. Fair to play to each person on the list, but, as you eloquently explained, they are not all using business, market-based solutions to pressing social problems. There is a lot of trouble and blurred lines with the word social entrepreneur, but if Forbes were looking to include social entrepreneurs that use business as a solution to social problems, they should check out the portfolios of for-profit impact investors.

    • http://www.smartgirlsway.com Tracey

      @Christina: Too ture, but shouldn’t we also look at this with a gender lense? By and large, women are starting social ventures at a rapid rate. In our network they range from from 18 year-old icarewecare.com founder Priyanka Jain to social activist, Ashley Lucas of Diffuse5.com and Heatherjean McNeil of Proxyapparrel.com. We see many, many women starting social ventures who could be more impactful with funding. Maybe we can compare my list with your list?

  • vishy

    Agree completely with Raz’s article. Here’s my take on the list (on similar lines):

    http://www.techsangam.com/2011/12/05/calling-bullshit-on-forbes-list-of-top-30-social-entrepreneurs/

    - Vishy

  • Dirk Sampselle

    Mr. Godelnik,

    I appreciate your attention to the definitional issue here, but disagree with your analysis almost entirely. (1) Successful and financially sustainable nonprofits leverage market forces to bolster their financial bottom line. Nonprofits can generate profits, they just can’t distribute them. Nonprofits that sell goods or services undeniably “use business to solve social issues.” Museums, Universities, Health Centers and Hospitals – all these multi-million dollar nonprofits use business to solve social issues by selling mission-aligned goods and services. Add to that list all the thousands of successful nonprofits that leverage strategic partnerships with for-profits to do any of a variety of things – fund strategically aligned projects, collaboratively enter foreign markets, build marketing and branding synergies. The list goes on and on. http://hbr.org/1996/11/profits-for-nonprofits-find-a-corporate-partner/ar/1 All these nonprofits fit well within the bounds of the Forbes definition of social enterprise and any other reasonable definition I’ve seen yet. So your assumption that the nonprofit form is antithetical to using business to solve social issues is, quite simply, not well-founded. Additionally, (2) eco and social are not at all distinct; rather, they are inextricably linked. TerraCycle, Opower… they create real, measurable, essential social impact by ensuring there is an environment in which future generations of our society can live – and in which current generations can have reasonably healthy surroundings. The social/eco-entrepreneur dichotomy is illusory. And fruitless in the sense that all companies should be adopting triple, not double, line approaches to strategic thinking – and that includes nonprofits (many of which do not). It is simply a matter of responsibility for all to do so.

    With all of that said, nonprofits and businesses will continue to occupy distinct roles within our society. The definition of social entrepreneurship should not further that dichotomy. Nor should it encourage individuals and organizations down the trodden path of siloed double or single bottom line thinking. Rather, I argue for an expansive definition which includes social and eco, profit and non-, all under the headline: primacy of mission. If the organization’s PRIMARY purpose – its raison d’etre – is to solve social (including eco) issues, well then it is a social enterprise. If it is to generate profit, it is not. Look to the benefit corporation and flexible purpose corporation – and to a lesser extent the L3C – for guidance on how to properly structure an organization’s DNA to reflect that primacy.

    Thank you again for your attention to the matter.

    Regards,
    -Dirk

  • Marca

    Here in South Africa we have a very immature social entrepreneurship culture but we’re finally getting platforms in place which makes these kinds of projects far more accessible. What I quite like about the SASIX platform is presents these projects as real “investments” – you have a portfolio and each of the projects is assessed from a risk / sustainability / funding perspective. The more measurability you can give to these projects the easier it becomes for people to participate