Alliance Online - June 2007

Beyond the heroes

Caroline Hartnell

EVENT 4th Skoll World Forum on Social Entrepreneurship
Date 27-29 March
Venue Oxford, UK
Organizer Skoll Centre for Social Entrepreneurship

This year's Skoll World Forum on Social Entrepreneurship, held in Oxford in late March, attracted nearly 700 people from more than 40 countries. The conference theme was ‘Enabling Innovation’ and the topic under discussion was: where is innovation happening and how do we get more of it?

If you bring together 700 people with strong ideas about how we solve the world’s problems, what sort of a picture are they painting?

Jeff Skoll, speaking at the opening session, dubbed social entrepreneurs the ‘best hope for humanity’. ‘Wherever you find humanity at its worst in the world, you'll find a social entrepreneur working for change.’

But who are these social entrepreneurs? Are they the elite group of high-flying and spectacularly creative individuals who make up the annual cohorts of ‘Uncommon Heroes’ who are the recipients of the Skoll Awards for Social Entrepreneurship, and very likely also selected as Schwab Foundation Social Entrepreneurs? Or are they the vast legions of ‘ordinary’ creative individuals working for social change all over the world?

Roger Martin and Sally Osberg’s recent article in the March issue of the Stanford Social Innovation Review, entitled ‘Social Entrepreneurship: The case for definition’, offers a ‘more rigorous definition’ of social entrepreneurship, but it seems that the horse may already have bolted.

A plethora of players

Geoff Mulgan of the Young Foundation, speaking in the opening session of the Skoll Forum, warned against ‘setting up too many borders and definitions’. He also declared himself to be suspicious of too much focus on leaders, quoting celebrated UK entrepreneur Michael Young as saying he hoped social entrepreneurship wouldn't get stuck with a focus on individuals. Behind every individual is a team, and much social change is driven by movements, Mulgan reminded us, sketching out a world in which social innovation is coming from every quarter.

The Young Foundation is one of the organizations behind the newly launched Social Innovation Exchange, which its website describes as ‘a new global network of networks to promote social innovation’ – see www.socialinnovationexchange.org.

John Elkington of SustainAbility, speaking later in the Forum, similarly cautioned against overfocusing on a ‘few heroic individuals’, while Bill Drayton of Ashoka’s persistent message is that ‘Everyone’s a changemaker’.

There was also considerable emphasis on the role of politics. How do we ensure there is more social innovation, was the question posed by John Elkington in a session on ‘Supporting More Social Innovation’. The answer, he said, will be ‘increasingly political’. ‘Let's not be in awe of politics,’ said Ed Miliband, unsurprisingly as he’s UK Minister for the Third Sector. ‘Many structural injustices can be addressed only by government, though social entrepreneurs can do a great deal to draw attention to them.’

Mindy Lubber of Ceres insisted that we need everyone – government, social entrepreneurs, business – working collaboratively if we are going to achieve things. ‘We need to build social entrepreneurship efforts into larger power bases,’ she said. ‘We need to be catalysts for promoting innovations. Social entrepreneurs can come up with ideas and be part of the solution, but I can't imagine government not being part of the solution.’

A merging of sectors?

For Mark Kramer (FSG Social Impact Advisors), social entrepreneurship is the first step towards a merging of sectors. In an interesting session on the future of philanthropy, Mark Kramer put forward the ‘bold hypothesis’ that the new generation will not see a separate for-profit and non-profit sector. ‘We are on the cusp of a generational divide,’ he said. ‘The new generation will not see philanthropy as the primary solver of social problems.’

He saw shifts in both sectors. With social responsibility increasingly an element in business success, foundations for their part are taking ‘a more instrumental approach’. Social investment is growing as investors become more willing to accept a ‘blended return’, part social, part financial. At the same time, investments are less risky than had been thought. In order to make social progress, said Kramer, we need to merge sectors.

But Lester Salamon (Johns Hopkins Center for Civil Society Studies) looked at the same trends and came to a different conclusion. As he saw it, a new approach to problem-solving would emphasize increased cooperation among the three sectors rather than merger. In fact, in his view the blurring of sector boundaries holds dangers for non-profits.

The US has a huge non-profit sector, characterized by business schools as a backwater, lacking enterpreneurial skills. In this scenario, social entrepreneurship can be seen partly as a response to the perceived need to make non-profits more entrepreneurial.

But rather than seeing this as a first step towards a desirable merging of the sectors, Salamon sees ‘some real risks, a growing identity crisis’. Non-profits are asking: what are we doing? What makes us distinct? He pointed towards what seems to be a genuine threat to non-profit mission inherent in the move towards social entrepreneurship as organizations face decisions as to whether to pursue better-off paying customers or the poor clients they have traditionally served.

A new humanistic capitalism?

While non-profits look increasingly like small businesses, there is a similar blurring taking place on the donor side of the equation. Management guru Charles Handy talked of new philanthropists as ‘seedlings of a changing type of capitalism’, with self-interest and sympathy – both identified by Adam Smith as needed, he pointed out – coming together.

He also described the new philanthropists as ‘DIY freaks’ – not prepared to write cheques to people they don't know, wanting to run things themselves, blundering into situations they don't understand. They need social entrepreneurs and social entrepreneurs need them, said Handy.

Nobel Peace Prize Laureate Muhammad Yunus also insisted on the need for a ‘new kind of business’, social business. And new kinds of business need new kinds of investor, people who are happy to get back the money they have invested but to receive no dividends. ‘Economics recognizes only the goal of making money,’ he said, ‘it doesn't do justice to human creativity. People are not just selfish.’ Grameen Danone and the Aravind eye-care hospital are two examples of this kind of new social business.

A range of financial options

Not everyone at the Forum would have agreed with Yunus that social investors should receive no dividends. As many Forum sessions highlighted, a great range of new finance mechanisms are developing. A report just released by SustainAbility, Growing Opportunity: Entrepreneurial Solutions to Insoluble Problems, refers to ten funding options ranging from foundation grants to venture capital and market flotation. Bridges Community Ventures is a private sector capital company with social purposes which invests in the 25 most deprived areas in the UK, while Community Innovation UK works with earlier stage investment opportunities which wouldn't be ready for Bridges investment – to give just two UK examples.

But there could be no doubting the pressing need for finance. According to the SustainAbility report, 72 per cent of social entrepreneurs say that raising money for their social ventures is a problem. Asked what was the single most important thing he’d learned from the conference, Martin Fisher of Kickstart said that every social entrepreneur he talked to at the Forum spent too much time trying to raise money. The new humanistic capitalism, hybrid funding models, public private partnerships – it is all encouraging but there is still a long way to go.

Even if the fledgling social capital market finance mechanisms do take off and achieve the scale that is needed, it was acknowledged by several speakers that even the new humanistic capitalism will not cater for everyone. ‘The market is the best listening technology,’ said Jacqueline Novogratz of Acumen Fund. ‘The best way to design goods for poor people is to find out what they want and what they're prepared to pay.’ But, she cautioned, ‘some may not be able to pay at all. We need philanthropic money still.’

For more information
www.sbs.ox.ac.uk/skoll
www.skollfoundation.org

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