Topic > Difference between ordinary and philanthropic entrepreneurs

Traditionally, entrepreneurs are known to be individuals who create value. (Schumpeter, 1963) However, further research classifies entrepreneurial motivation as the “push” or “pull” theory. The “push” theory indicates that the entrepreneur is motivated to start a business due to external factors including, but not limited to, a difficult living environment or insufficient salary. On the other hand, the “pull” theory suggests that entrepreneurs are drawn into entrepreneurial activities to achieve desirable outcomes such as independence. (Gilad & Levine, 1986) Nonetheless, models of entrepreneurship emphasize the creation of value that can be measured and quantified by financial profits. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay The divergence among ordinary entrepreneurial philanthropists occurs when the value of philanthropreneurs goes beyond simple financial profits. More than just the numbers on the balance sheet, these entrepreneurs aspire to obtain a permanent benefit for a disadvantaged population that does not have the financial means to support itself in order to create a new stable balance. (Schwab & Hartigan, 2006) This additional motivation can otherwise be seen as creating profits for the company as a whole. Furthermore, it has also been found that many philanthropic actions by entrepreneurs are largely associated with organizations whose services directly benefit these individuals. (Schervish, 1998) The motivations of philanthropic entrepreneurs can also be analyzed using Maslow's Hierarchy of Needs, whereby physiological needs are met through their finances. The profitability from their businesses satisfied their basic needs, allowing them to strive to reach other needs higher up the pyramid. This includes but is not limited to the self-fulfillment that can come from performing acts of philanthropy. Pierre Bourdieu's theory of forms of capital (Harvey & Maclean, 2008) is yet another conceptual framework that can be used to examine the motivations behind entrepreneurial philanthropy. This framework revolves around four main capitals: economic, cultural, social and symbolic. Economic capital can be achieved by these individuals through their business operations, reflected through their profit margins. However, as philanthropic entrepreneurs, these individuals tend to obtain symbolic capital, in addition to the economic capital they obtain. Contrary to economic capital which is easily quantifiable through investment returns, symbolic capitals are not measurable by financials. They are indicated through an individual's reputation, honor, or even networks. This provides the philanthropist with substantial benefits beyond financial ones that offer the potential for further monetary benefits. As suggested by the researchers, symbolic capital is central to the other capitals in the framework as it provides access to relationships and networks that attract other forms of capital. (Shaw, Gordon, Harvey and Henderson, 2010)