When
the Schwab Foundation started to search the globe
18 months ago to identify outstanding social entrepreneurs,
we faced one major hurdle: the very definition of
social entrepreneurship. We found ourselves in the
strange situation of having to define social entrepreneurship
by what it is not.
- Social entrepreneurship is not synonymous
with corporate responsibility.
- It is not a different form of philanthropy.
- Nor are social entrepreneurs simply charities
becoming businesses
- That said, social entrepreneurs can be found
in the business sector and in the charity sector.
- Social entrepreneurship is a term that captures
a unique approach to social problems, an approach
that cuts across sectors and disciplines.
- It is an approach that is grounded in certain
values and processes that are common to each
social entrepreneur, independent of whether
his or her area of focus has been education,
health, welfare reform, human rights, workers'
rights, environment, economic development,
agriculture -- and so on.
- It is those values and processes that set
the social entrepreneur apart from the rest
of the crowd of well-meaning people and organizations
who dedicate their lives to social improvement.
The
best way to describe social entrepreneurship is by
example. Let me start out with two. Muhammad Yunus
is the world¹s best-known social entrepreneur.
Thirty some years ago he was a young professor of
economics in his native Bangladesh. He was driven
to find a way to convince banks to give loans to
the poorest people in his country. He was thought
to be mad. The poor have no collateral, he was told.
Lending them money is folly. So Yunus decided to
start a bank for the poor. The first loan was for
about $30. Today millions, women in particular, have
been able to pull themselves out of poverty thanks
to the Grameen Bank. The Grameen Bank was the first
micro-lending institution in the world. Today, microcredit
is mainstreamed even into the most conservative institutions.
Yunus changed forever the myth that being poor was
synonymous with being a high-risk investment. Grameen¹s
repayment rate over the years has been between 95
and 98 percent. Other micro finance institutions
across the world that have emulated Grameen report
the same returns.
The second example comes from India. In 1972 Ela
Bhatt was a lawyer with the Textile Labor Union in
Ahmedabad. She realized that 89 percent of the Indian
workforce was made up of impoverished women who eked
out their existence through cigarette rolling, waste-picking,
salt mining, working as head loaders, street vendors
and the like. Ela did the unthinkable, again, against
much opposition. She formed the Self-Employed Women's
Association (SEWA), the first union in the world
to organize and empower the poor and self-employed,
increasing their bargaining power, economic opportunities,
health security and legal representation. Today SEWA
is the largest labor union in India and has influenced
national and international policies in support of
informal employment around the world.
Whether they work in health, education, environment,
community development or other areas, social entrepreneurs
have underlying core values in common, including:
- An unwavering belief in the innate capacity of
all people to contribute meaningfully to economic
and social development.
- A driving passion to make that happen, be it
through a new invention, a different approach,
a more rigorous application of known technologies
or strategies, or a combination of all three.
- A practical but innovative stance to a social
problem, coupled with dogged determination, which
allows them to break away from constraints imposed
by ideology or field of discipline, and pushes
them to take risks that others wouldn't dare.
- A healthy impatience. They
don¹t do
well in bureaucracies because they don't wait
for things
to happen. They are social change agents
that make things happen.
Social and business entrepreneurs have much in common. They combine innovation,
resourcefulness and opportunity to discover new ways of doing things.
In addition, social entrepreneurs are committed to using business principles,
including transparency, efficiency, market research and impact evaluation,
to solving social issues. But there are certain areas where differences
prevent them establishing close working relationships.
One of those areas is communications. We in the Schwab
Foundation need to help our community of social entrepreneurs
articulate their accomplishments and what they can
offer in language that the business
community can relate to and respond. One example
will clarify this gap. At the World Economic Forum¹s Annual Meeting in New York last February,
one of the members of our social entrepreneurs¹ network was invited
to meet the CEOs of the seven biggest energy companies in the world.
What an opportunity! This social entrepreneur has developed a scalable
system to provide affordable solar energy to poor people who currently
spend $8 to $15 a month on non-renewable fuels for lighting. His model
allows investors to recoup their investment in five to 10 years. This
target market encompasses most of the two billion people in the world
who still lack electricity and who, by burning fossil fuels, contribute
significantly to global warming. The social entrepreneur¹s challenge
was to convey to the energy CEOs that they should
work with him. How? His immediate inclination was
to appeal to fears such as terrorism, environmental
degradation, etc., and principles such as: We can't
continue to ignore the fact that one third of the
planet is being left out of development,
etc. But
we were able to persuade him to try a different approach. He explained
to the CEOs something like, "This
is the largest untapped energy market on the planet.
You guys need alternative distribution systems to
reach these people. And I can show you how to reach
them!" As business people, the CEOs know that
if they want to reach a new market they need new
distribution mechanisms. By his approaching the encounter
in this fashion, these business people became intrigued
immediately. The conversation became about identifying
the value proposition, the win-win deal. It was a
totally different conversation than would have occurred
if the social entrepreneur had asked for a handout.
And it proved to be more promising as it initiated
a working partnership between this social entrepreneur
and one of the major energy companies. But it did
not come naturally.
On the other side of the communication gap, we have
learned that many people in the business community
think it is easy to run a social enterprise. But
they need to rethink that myth, and the foundation
needs to promote this reflection. As Jed Emerson
at Stanford University says, if more business people
understood what it is like to manage a social enterprise
with a double or triple bottom line, they would be
more humble.
Likewise, in the management consulting world, there
is much talk of unleashing the metrics, methods and
talent pool of the private sector as the panacea
to end problems of poverty and unemployment. But
the private sector has a lot to learn about delivering
better outcomes for customers. As Eric Schwarz, founder
of Citizen Schools, point outs, social entrepreneurs
in education are trying to change the performance
of their customers--children--in vital skill areas.
Finding different ways of helping them be better
writers, better critical thinkers, able to attend
university. When, Schwarz asks, is the last time
anyone asked Nike or Reebok if its shoes actually
make anyone run faster or jump higher?
Finally, as governments
are increasingly unable to deliver public services
but realize that the route
to privatize those same services has a corrosive
effect on equity, they have identified "social
entrepreneurship" as a potential panacea for
social ills. But in their haste, a confused idea
of social entrepreneurs has emerged that equates
social entrepreneurs with managers of social enterprises.
Yet social entrepreneurs tend to be less managers
than they are practical visionaries who innovate
because they have a thorough understanding of their
field and the context in which they develop their
innovation. A social entrepreneur and a manager of
a social enterprise are two very different types
of people.
Social entrepreneurs are the flame that ignites
the fire of social transformation. This is not business
as usual. That flame must be fanned and nurtured
by those who understand what social entrepreneurship
is about and delight in its promise to achieve social
transformation.
Pamela Hartigan is managing director of the Schwab
Foundation for Social Entrepreneurship
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