Social Entrepreneurs Unite

2009-10-03T09:47:00.000-07:00

In the world of Social Entrepreneurship there are many variations along the spectrum from pure Social Entrepreneurship (as generally expressed in "pure" non-profit sectors) to Capitalistic for-profit endeavors with a bit of social conscience. Popping up along this spectrum are a plethora of new models of business with varying levels of "social" and "capitalism."

That area of focus that I christened "Social Capitalism" in my last post has opened quite the proverbial can of worms in my circle. Thanks to all for the valuable feedback and for weighing in on the matter.

The more, it seems, that is said in the media and print about "Social Entrepreneurship," the less clear it becomes what exactly the term means.

I'm looking to coin a phrase for my own business, which lies somewhere along the spectrum. We make money. Our investors do well. Our community is well-served. We make a difference for families. Everyone wins.

I'm in the land development/re-development business, providing affordable housing in South Florida. I have long believed that one needn't hurt people in order to make money. However, for the first time in US history, the economic climate is affording an unprecedented opportunity (a "perfect storm") for us to actually have everyone win.

Houses across South Florida sit vacant and deteriorating in one of the hardest-hit regions lying in the wake of the US mortgage and financial crisis of 2008. Neighborhoods stand boarded up and inhabitable because they don’t fit traditional models for financing or ownership. These houses can only be acquired with cash and will require tens of thousands of dollars to be safe to inhabit. Ownership is now out of reach for the majority of families and average rents are climbing. This spiral perpetuates boarded up communities and a shortage of affordable housing.

Institutional and high net-worth investors have headed for the hills, pulling billions out of the economy to "wait it out."

If billions are sitting on the sidelines…
AND non-performing assets are available for pennies-on-the-dollar
AND those assets can easily and cheaply be transformed into performing assets
THAT provide for the common good
AND revitalize communities
THEREBY increasing the value of those assets
AND doing measurable good…

What would we call this model... Besides, of course "a perfect storm?"

2009-09-24T10:35:00.000-07:00

In my last post, I coined a phrase: Social Entrepreneur/Capitalist Hybrid Business Model... a bit verbose to say the least, but accurate and highly descriptive.

How else would one name the emerging for-profit venture model seeking to make a measurable and positive difference in the world?

Just this morning an article from 2008 at Fast Company, "The 2008 Social Capitalist Awards" caught my eye (http://www.fastcompany.com/social/2008/index.html)...

Bam! That's it! Social Capitalism!

For many Gen X-ers, all grown up and running multi-national, multi-million dollar business the choice between good and evil is clear! The decision between doing the right thing and being profitable is a no longer an either/or conversation.

Create positive change in the world. Make oodles money for the company, investors, and (why not?) yourself! Look at Larry Page and Sergey Brin, for goodness sake... They included "Do no Evil" in their mission statement and they haven't missed a meal. Check out their Company Philosophy, it is worth taking notes! http://www.google.com/corporate/tenthings.html

Check out the Fast Money article, in addition to profiling 45 world-changing nonprofits, they present ten companies not only striving to make a profit, but to also make a difference.

Go Social Capitalists!

What is a Social Entrepreneur?

2009-09-11T12:17:00.000-07:00

In a recent conversation with some friends in the non-profit sector, I began to see emergence of a new business model. For lack of a better (or timelier) name, I am calling it the Social Entrepreneur/Capitalist Hybrid Business Model.

With the industrial revolution came a “profit at any cost” model of capitalism that regarded environmental pollution and the exploitation of cheap labor necessary cogs in the wheel of the corporation... the non-responsible entity. Over the course of the past 200 years or so, the wealth gap has widened dramatically in the United States and the middle class is eroding for the first time in US history. The last decade has seen public outcry and media attention leave corporations no longer able to operate as socially irresponsible entities unchecked.

The era of capitalism as “profit at any cost” is drawing to a close and a new breed of capitalism is emerging. Enter the social entrepreneur.

Strictly speaking, Social Entrepreneurialism encompasses both for-profit and non-profit ventures, but is has historically been more frequently used to describe non-profit enterprise.
The terms social entrepreneur and social entrepreneurship were first used in literature on social change in the 1960 and 1970s. The phrase was used as a description of Robert Owen in J Banks, The Sociology of Social Movements, London, MacMillan, 1972. It came into widespread use in the 1980s and 1990s, promoted by Bill Drayton the founder of Ashoka: Innovators for the Public and others such as Charles Leadbeater.

Although the terms are relatively new, references to social entrepreneurs and social entrepreneurship are sprinkled throughout history. Some historically noteworthy people whose work exemplifies classic "social entrepreneurship" include Florence Nightingale (founder of the first nursing school and developer of modern nursing practices); John Muir (naturalist and conservationist, established the National Park System and helped found The Sierra Club; and Vinoba Bhave (founder of India's Land Gift Movement).

During the 19th and 20th centuries the most successful social entrepreneurs married the domains of civic, government and business worlds, promoting ideas that were adopted by mainstream public services in welfare, schools, and health care.

One shining example of a contemporary Social Entrepreneur/Capitalist Hybrid Business is TOMS Shoes. TOMS Shoes was founded on a simple premise: With every pair of shoes purchased, TOMS will give a pair of new shoes to a child in need. They call this operating model “One for One.”

In 2006 an American traveler, Blake Mycoskie, befriended children in Argentina and found they had no shoes to protect their feet. Wanting to help, he created TOMS Shoes, a company that would match every pair of shoes purchased with a pair of new shoes given to a child in need. “One for One.” Blake returned to Argentina with a group of family, friends and staff later that year with 10,000 pairs of shoes made possible by caring TOMS customers.

Since their beginning, TOMS has given over 140,000* pairs of shoes to children in need through the One for One model. TOMS plans to give over 300,000 pairs of shoes to children in need around the world in 2009. (http://www.tomsshoes.com/)

Social entrepreneurship is commonly described as having more than one bottom line or as many as three. For example, in addition to financial performance, a firms environmental and social effects are also measured. To put it simply, for these entrepreneurs, it's not just about the money.

"Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry."
Bill Drayton, CEO, chair and founder of Ashoka