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  • Essay / Difference Between Ordinary Entrepreneurs and Philanthropic Entrepreneurs

    Traditionally, entrepreneurs are known to be individuals who create value. (Schumpeter, 1963) However, other research classifies motivation in entrepreneurship according to the “push” or “pull” theory. The push theory states that the entrepreneur is motivated to start a business due to external factors, including a difficult living environment or insufficient salary. On the other hand, pull theory suggests that entrepreneurs are drawn to entrepreneurial activities in pursuit of desirable outcomes such as independence. (Gilad & Levine, 1986) Nevertheless, entrepreneurship models emphasize the creation of value that can be measured and quantified by financial profits. Say no to plagiarism. Get a Custom Essay on “Why Violent Video Games Should Not Be Banned”?Get an Original EssayThe divergence between ordinary philanthropreneurs occurs when the value of philanthropreneurs exceeds mere financial profits. Beyond the figures on their balance sheet, these entrepreneurs aspire to seize a permanent profit for a disadvantaged population who lack the financial means to meet their own needs, in order to create a new stable balance. (Schwab & Hartigan, 2006) This additional motivation can otherwise be seen as generating profits for society as a whole. Additionally, it has also been discovered that many philanthropic actions by entrepreneurs are largely associated with organizations whose services directly benefit these individuals. (Schervish, 1998) The motivations of philanthropreneurs can also be analyzed using Maslow's hierarchy of needs, according to which physiological needs are met through their finances. The profitability of their businesses helped meet their basic needs, allowing them to strive to meet other needs higher up the pyramid. This includes, but is not limited to, the self-actualization that can come from acts of philanthropy. Pierre Bourdieu's theory of forms of capital (Harvey and Maclean, 2008) provides another conceptual framework that can be used to examine the motivations behind entrepreneurial philanthropy. This framework is structured around four main capitals: namely economic, cultural, social and symbolic. Economic capital can be achieved by these individuals through their business operations, reflected by their profit margins. However, as philanthropreneurs, these individuals tend to achieve symbolic capital, alongside the economic capital they acquire. Unlike economic capital which is easily quantifiable thanks to returns on investments, symbolic capital is immeasurable by financial means. They are signaled through the reputation, honor or even networks of an individual. This offers the philanthropreneur substantial benefits beyond the financial aspects, providing the potential for additional monetary benefits. As the researchers suggest, symbolic capital is central to the other capitals in the framework because it provides access to relationships and networks that attract other forms of capital. (Shaw, Gordon, Harvey and Henderson, 2010)