Common Challenges Faced by Social Entrepreneurs

Social entrepreneurs are key to directly addressing social needs in under-resourced communities. But early-stage social enterprises face momentous obstacles. The single largest obstacle is, of course, access to funding. As the Rockefeller Philanthropy Advisors points out, “For philanthropists accustomed to more traditional grantees, funding social enterprises can feel like entering uncharted territory. Donors might find themselves intrigued by the potential for change, and yet, at the same time, unsure of what to expect in a field where the unexpected is the norm.” In the 2019 Halcyon Social Enterprise Ecosystems report, almost 20% of the 624 social entrepreneurs interviewed stated that they self-financed their enterprise or relied on the support of family and friends.

Another challenge that social enterprises face is measuring their social impact. According to a 2008 report from the Center for Advancement of Social Entrepreneurship (CASE), “Impact assessment is still a crude and inexact science.” The fact that it is difficult to quantify a social enterprise’s value creation only exacerbates the first challenge of receiving funding because potential investors are looking for evidence that their investment will indeed affect change.

The above obstacles lead to yet another common problem faced by social entrepreneurs: the ability to scale. CASE identified in its research that, “There is a huge gap between early stage, seed funder money and later stage, multi- million funding.” Many investors are interested in funding the next big idea rather than investing in the expansion of an established social enterprise. Moreover, the Miller Center for Social Entrepreneurship identifies that constraints in supply chain, restraining government policies, or lack of partnership opportunities can limit the ability of a social enterprise to expand.

The objective of the Hunt Institute’s (HI) Social Enterprise Program (SEP) is to support social entrepreneurs in overcoming these obstacles in order to accelerate their social value creation. HI’s SEP provides early-stage social enterprises with a program and toolbox designed to empower them to obtain funding as well as access to a multidisciplinary network of experts and business mentors.

To learn more about the Social Enterprise Program, visit For more case studies and examples, stay tuned to the Hunt Institute Digest.

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