For over 20 years, Ashoka, the global citizen sector organization that pioneered the field of social entrepreneurship, worked almost exclusively in developing countries. First in India and Brazil, and then throughout Asia, Latin America, Africa and later Eastern Europe too, Ashoka has sought out leading social entrepreneurs – extraordinary individuals with potentially system-changing ideas for addressing social need.
However, social entrepreneurship is relevant for so-called ‘advanced economies’ too, so Ashoka expanded its programme to the US and Canada in 2000, and in 2003, opened its offices in Spain, France and Germany.
Although the social problems of Western Europe differ from those of developing countries, they nevertheless exist: failing and socially unbalanced education systems, integration of an increasingly ageing population, persisting tensions with citizens newly arrived from other parts of the world, and access to healthcare are just some of the issues concerning EU citizens and governments alike.
However, the concept of social entrepreneurship runs counter to widely held assumptions in much of Western Europe that government should be the chief, if not sole, provider and funder of social services. Most of the resources of the third sector in Continental Europe come from the state, with Germany’s non-profit sector ranking most dependent, with 65 per cent coming from government.
Changing circumstances and changing attitudes
However, things are changing. In Germany, the municipalities, responsible for the bulk of the investment, have increased their social sector spending by 45 per cent over the last ten years and are running a deficit of more than €10 billion. Severe cuts in social sector budgets in several Länder (states) are one of the consequences, leaving many organizations struggling and looking for alternative means of support.
Yet beyond economic necessity, there is a deeper shift in attitude. As recent polls suggest, Western Europe’s citizens are much more sceptical about the ability of governments to tackle social problems than previously thought. In France, for example, a poll reveals that a majority of citizens would rather trust the citizen sector than government to address issues such as racism, extreme poverty or drug addiction. And in Germany, up to 80 per cent of citizens feel the urgent need for the social welfare system to be reformed, but only 20 to 30 per cent think the government is capable of doing so.
A mix of support and unease
Against this background, the concept of social entrepreneurship is gaining ground among citizen sector organizations and entrepreneurs alike. However, growing support for it is not unmixed with unease. Some, especially in Germany, are uneasy with the focus on the individual leader, while others, especially in France, feel the emphasis on performance is straying from the democratic values of the citizen organization. In France and Spain, the business-style language has drawn criticism, while the focus on the few most innovative social entrepreneurs at the expense of a broad group of changemakers has caused some unease in all three countries.
But there is a growing awareness in the sector that entrepreneurship need not be conceptually opposed to not-for-profit work, and that by marrying entrepreneurial principles and societal goals, social problems may be solved in a much more efficient way.
In Germany, for example, where the idea of social entrepreneurship brought blank stares when Ashoka took its first exploratory steps there in 2002, there is now an increasing demand by citizen sector organizations to learn more about the concept. Universities such as Freiburg are developing social entrepreneurship study clusters, and the leading ‘quality’ paper, Frankfurter Allgemeine Zeitung, called social entrepreneurship one of the six most important trends of the coming decade. In France, ESSEC created its Chaire d’Entrepreneuriat Social in 2003 and a series of documentaries about social entrepreneurs is currently being aired on national TV.
So are there any social entrepreneurs in Europe?
Ashoka sets a high standard for would-be fellows: having a new and innovative idea with high social impact; entrepreneurial spirit and track record; creativity; and strong ethical fibre. While it recognizes that social entrepreneurs are a rare breed and reckons to find one per 10 million citizens per year, it is clear that social entrepreneurs have always existed in Western Europe – like the Italian Maria Montessori or the French Jean Monnet, or Peter Eigen, founder of Transparency International, or Bernard Kouchner, who set up Médecins Sans Frontières. These prominent examples apart, there are many others whose ideas have changed entire fields without their ever achieving celebrity. Though a full-blown search programme to identify fellows will not be undertaken until we have completed our fundraising, we are already building a portfolio of very high quality candidates.
Furthermore, Ashoka expects that social entrepreneurs will become much more visible over the coming years, given the mounting social problems, the increasing pressure on citizen sector organizations to become independent of government, and the sector’s dramatic growth in employment and attractiveness. Over the past ten years, growth of employment in the citizen sector has grown roughly twice as much as that in the private sector in Germany and France. In France, it currently employs 1.2 million people, not including 700,000 volunteers (full-time equivalent).
A new breed of philanthropist
Interestingly, this is happening at the same time as a new generation of wealthy individuals is getting involved in philanthropy.
A major challenge Ashoka has been confronted with in Europe is the fact that individual philanthropy is historically much less developed than in the US and most philanthropic giving follows quite conventional approaches: small grants with limited involvement. There are a number of reasons for this, prominent among them a perception that paying high taxes is the chief means of giving back to society and the fact that a small minority of Europe’s wealthiest people are business entrepreneurs, in sharp contrast with the situation in the US.
This is changing, however: the generational transition in the family-owned businesses created after the war has led to a wave of new foundations being established (800-900 per year in Germany, up from 200 per year in the 1990s, according to a study by the Bertelsmann Foundation). Probably even more fundamentally, a new generation of young and sophisticated philanthropists is emerging from the ranks of top executives, professionals and business entrepreneurs, as shown by the recent launch of the European Venture Philanthropy Association. These philanthropists are moving away from the traditional charity giving: they think strategically about how to achieve maximum social impact for their investment, they expect effectiveness and professionalism, and they are ready to get personally involved. In short, they are the ideal partners for social entrepreneurs.
Launching Ashoka in Western Europe
In 2004, we successfully launched our first programme in Spain, ‘Premio Ashoka’, a competition designed to foster innovation in resource mobilization for the citizen sector. We will roll out similar capacity-building programmes in other Western European countries and we are building partnerships with leading European citizen sector organizations. In addition, over 600 business people attended our conferences in 2004, and we will continue our extensive social marketing efforts with the business community.
Our three-year objective is to build a community of 50 leading Western European social entrepreneurs, tightly integrated in our European and global network. We have started building a base of nominators – the people who will be responsible for nominating new fellows – and identifying high quality candidates. Indeed, we have been impressed with the quality of the European social entrepreneurs we are meeting.
Our launch in Western Europe is led by a multi-national team bridging the business and citizen sector worlds: Maria Zapata (former executive at General Electric), Konstanze Frischen (former journalist at CNN, FAZ and ZEIT), Arnaud Mourot (a social entrepreneur who founded Sport Sans Frontières), Olivier Kayser (former senior partner at McKinsey) and Corinne Frey (Swiss social-business entrepreneur). We are currently looking for a successful UK social entrepreneur to join our team.
We also benefit from strong support from Ashoka’s global strategic partners: McKinsey, who provide us with offices in Paris, Frankfurt and London; Hill and Knowlton; as well as Latham and Watkins.
Over the last year, significant progress has been made in raising the funds we need for our launch from over 30 European business entrepreneurs, venture capitalists and professionals as well as selected foundations and corporations. This establishes a very solid platform of support for the future. Though there is still work ahead of us, given the current momentum, we hope to be ready to launch our selection process in 2005.
1 In the US the figure is 28 per cent; in the UK it is 45 per cent.
2 McKinsey are strategy consultants, Hill and Knowlton are public relations consultants, and Latham and Watkins are lawyers.