What role should impact investors play on the topic of wellbeing of social entrepreneurs? This was the question on our minds during a session at the annual conference of the European Venture Philanthropy Association in the Hague this week.
The host, Willemijn Verloop, is a serial social entrepreneur and impact investor at Social Impact Ventures. At 23 she founded the international aid organisation, War Child.
She shared that nearly 50 per cent of the social entrepreneurs attending the World Economic Forum’s Annual Meeting 2018 reported struggling with burnout and depression. An alarming figure especially considering these are the ‘most successful’ and scaled social entrepreneurs.
I wondered if this issue is unique to social entrepreneurs. All entrepreneurs struggle with investor expectations, doing things you have never done before and taking risks, right? But, during the session it became clear that social entrepreneurs are baked with two extra ingredients: strong values and activism. If you want to make a positive impact on the world, failing is simply more painful. You are not just crushing your own dreams, but also of those who could have benefited from your social solution. So the price social entrepreneurs are willing to pay to be successful is very high. They persevere longer and accept poor circumstances easier. They also have a tendency to want to solve all other social challenges they encounter while running their social business. Social entrepreneurs often carry the world upon their shoulders. Some heavy weight lifting and not of the healthy kind. Although there’s a time and a place for this kind of passion, they hardly leave it at the door.
Bas van Abel, founder of Fairphone was willing to share his personal story with us. A story about building a fantastic new social enterprise, suffering from burnout and eventually deciding to step down as CEO and join the board. Not regretting anything but much wiser now, he does things differently with his new social enterprise De Clique.
Is the wellbeing of social entrepreneurs the business of investors? Yes, if you acknowledge that the vitality of the leader(s) is a key success factor for any enterprise. So it’s time to let the love the investors have for their investees’ vision and impact, trickle through to their wellbeing.
On to the tips and tricks. During the session we came up with some helpful advice to share.
- Do a team assessment to find the weaker spots of the culture, leadership, team composition or work-life balance of the social enterprise. Hire professionals to support leadership team development. Grant money could play an important role in financing it.
- Investors can play a vital role in keeping the entrepreneur focused on what really matters.
- Investors have high demands on impact targets and reporting. Best to pick two impact targets instead of six and lowering the chances of success.
- Build an open relationship with your investee. Therefore, she or he can flag rising pressure when it occurs.
Employed by a large company, ING, I recognize many elements as an Human Resources strategy. My employer put wellbeing into the HR strategy two years ago. So already there are examples in the commercial market to learn from. Let’s get started. This is an invitation to all impact investors to be true angels. Use your powerful seat at the table to care not only for impact and financial results, but also for wellbeing.
Kirsten Ottens is Director of ING Netherlands foundation