Assalam Alaikum / Greetings of Peace,
I hope you all are doing great.
Today I wanted to discuss something many ask me when I give my talks and I believe this is a very important topic to discuss.
Is Islamic Social Entrepreneurship the same as Western Social Entrepreneurship?
The answer is a big fat “NO WAY”. I wrote a book call “Waqf (Endowment): A Vehicle for Islamic Social Entrepreneurship”, published in 2017 by the prestigious IBFIM in Malaysia. I detailed in length the notions of both the Islamic and Western mindsets together with the history of both the Islamic Social Entrepreneurship and the Western Social Entrepreneurship. The truth is the hype from the Western side started relatively recently and in contrast the practice of Islamic Social Entrepreneurship was very wide during the era of Prophet Muhammad (SAW), over 1,500 years ago.
In this blog, I would like to focus just on the Western side – I will cover the Islamic side on another day.
What Is A Social Enterprise?
I first heard about the term “Social Enterprise” from the Western perspective while studying my Masters in Islamic Finance in Malaysia, many years ago. I read case studies after case studies – it was so highly glorified. In my heart, I knew that many of the concepts of the Western economic systems were borrowed from the Islamic economic systems. I totally did not agree with Professor Muhammad Yunus of Grameen Bank nor Jacqueline Novogratz of Acumen as I being I, researched on the true empowerment of the concepts and whether there was real empowerment or not. I knew a lot of it was marketing and for the founders to funnel the wealth for their own agendas.
Since the 1970s, the most common definition was along the lines of “A social enterprise is a legally registered organization owned and controlled by its members based on the values of equity in ownership. It trades commercially for financial independence and gain, creates social wealth and operates in an environmentally responsible manner. Social wealth and environmental responsibility are created as an integral part of Social Enterprise’s operations or can be delivered through its profit distribution. A Social Enterprise is measured by its success in achieving the triple bottom line of profitability, social wealth creation and environmentally responsible operations.”
Basically it is in between the for-profit making and non-profit making organizations. However, social enterprises embrace financial support and for-profit opportunities to earn more sustainable revenue. It is a balance between social mission and productivity in order to create business sustainability. This is in contrast to non-profit organizations that rely on grants and donations mainly for their sustainability. Social enterprises are also suppose to reinvest part of their profits for the social missions they believe in – such as job creation, community empowerment, environmental issues, etc. Social enterprises need to create “impact” which is part of their sustainable bottom line. One of the biggest criticism of social enterprise in the West is how they are measuring the “impact” or is just another way of funneling money from people, all labeled under the umbrella of “common good”??? I feel this a very valid criticism and social enterprises have an obligation to answer this question and this is one of the areas we have to zoom in for the long term sustainability of social enterprises.
To learn more about Islamic Social Enterprises, please check out this site regularly, as I blog regularly.
With Kind Regards,
Thamina Anwar (Dr.) – PhD (UKZN)
B.Eng (Hons.) (London) | MSc (Bradford) |
MBA (Cranfield) | GradDipTchg (Auckland) | CIFP (INCEIF)