Social Citizen’s Top 10. #9: If the founder of Walmart is a social entrepreneur what does the world have coming?

Posted on April 23, 2009. Filed under: Top 10 April 2009 | Tags: , , , |

Originally posted May 9, 2008.

I read a post a while back, where a blogger said the founder of Walmart is a social entrepreneur???? And I haven’t written a ranting post in a while so I thought I’d post this one.

This blogger justified Sam Walton as a social entrepreneur:

Sam Walton started with a very basic idea of offering the community what they needed and wanted straight after the Second World War – stores that offer goods at the lowest possible prices and that stayed open later during key holidays. He passed on the saving he made from buying from lowest priced suppliers to his customers. A basic social need of the time developed into a business model social entrepreneurs have duplicated ever since – give people what the need at a price they can afford. If it works, give it to more people.

Alright, so maybe Mr. Walton started out with the idea of giving the community something they needed, low cost goods, but what happened?

I would not consider anyone who creates a business such as this to be a social entrepreneur just because they see a need in the community. I would call Mr. Walton and others like him “smart profiteers”, who have taken their idea too far, and have now destroyed the community’s they originally wanted to “help” (as the blogger stated).

To the bloggers credit, he/she does say later in the article:

The challenge for most companies is to remember why they started in the first place and ask themselves – are we still serving a social need? And for our future growth – what social need can we serve to continue to grow as a company, still be socially relevant and needed by society.

I am hoping through this statement the blogger was trying to say, Mr. Walton may have once been a social entrepreneur, but he forgot about his roots.

There are two lessons to learn from this article, one about corporate social entrepreneurship, and the other about selling goods in nonprofit organizations.

1. Many corporations are taking on social enterprise efforts, giving back to communities in a new way, by returning profits to their mission, to do more good. I am just cautioning these organizations to look at Walmart. If it’s true that Mr. Walton created Walmart because he truly wanted people to get what they needed, even if they couldn’t afford it; then it is up to these corporations to keep themselves socially responsible. It’s alright to expand your efforts, as long as it’s not at the expense of small nonprofits, who tend to be closer to the people, and as long as it doesn’t mean destroying communities in the long run.

2. The second lesson is for nonprofits taking on fee for service efforts or selling items to offset the costs of their services. These ideas are fantastic, as social entrepreneurs, it is important to take these types of risks and to be innovative in gaining revenue, but you can’t be so innovative you start to forget about your mission. Ask Peter Brinckerhoff about this one. I get scared sometimes seeing all the pink groceries and tools you can buy related to Breast Cancer Awareness. I am a supporter of the Susan G. Komen Breast Cancer Foundation and I hope they are not so worried about their next product they are not actually raising awareness about the disease of breast cancer or the research taking place.

I am a strong supporter of social entrepreneurship (I think you already know that), I just hope the idea of being one doesn’t just become something “everyone’s doing”. It’s important for social entrepreneurs to weigh the affects of everything they do on their mission.

Have you seen any other organizations/corporations getting out of hand with their new social enterprise, fee for service, or next brilliant idea?


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