Stanford Social Innovation Review

Note: this is a reposting of all the comments on the above, which were inadvertently deleted.

Comment
Social entrepreneurs need to focus primarily on their social mission which is at the heart of their actions. All what is being done has to be measured against the advancement to realize a social goal. business is only a tool to fuel, or to simplify, the accomplishment of a far-reaching social innovation. Yet when we are committed to a social mission we need to know how far and how well we are treading on this path. the degree to which a social goal has been fulifilled depends on the capacity to effectively allocate the scarce resources being available to the vast target population. In this matter, we are facing complex business-like problems such as logistics and organizational problems. That is why Social entrepreneurs need to be equipped with business skills. Nevertheless the vision to change the patterns of society stems from a global understanding of political and international relations, at least. This understanding should be confronted to the constraints and opportunities of the local reality. I think social entrepreneurs are visionary people, that’s why a wide set of skills, not only business ones, are mandatory.
Posted by: Nayim Khemaies at September 2, 2004 08:59 AM

Comment
I agree with you entirely that social entrepreneurs need a very wide range of skills. The social mission is the primary focus but social entrepreneurs need to be able to deliver this effectively to potentially vast target populations - hence the need for the business skills. I guess Paola Grenier’s question is whether business schools are really equipped to deliver the whole range of skills that’s needed.
Posted by: Caroline Hartnell at September 10, 2004 11:31 AM

Comment
Paola Grenier’s question comes amid the storm business schools have witnessed in the wake of ethical failures. I think, apart from a very strong ethical fiber, social entrepreneurs’skills encompasse, essentially,change management capabilities. To effect change, we need to change people’s minds and remove the constraints plaguing a community. In this regard, leadership skills are essential. Nevertheless, as you said, other skills are necessary, that’s why business schools step up to offer dual degrees in, for exemple, medecine, recently, or education as in Stanford, or law not least. As Peter Drucker said, business schools have to focus on honing students’ synthesis skills rather than analytical skills. When social entrepreneurs endeavor to bring about a social change, they are confronted with tremendous problems. To begin with, they collect vast amount of information, synthesize them, then develop an action plan, or strategy, focusing on the core problem. Communication and leadership skills are essential but business schools could not aim to teach basic entrepreneurial qualities which are, per se, linked to character and personality.
Posted by: Nayim Khemaies at September 14, 2004 05:13 AM

Comment
In other words, social entrepreneurs are basically born not made. If the basic entrepreneurial skills that social entrepreneurs need are, per se, linked to character and personality, it doesn’t seem likely that any form of educational establishment is going to be able to impart them. In which case, business schools can’t be faulted for failing to provide training in the whole range of skills needed.
Posted by: Caroline Hartnell at September 14, 2004 07:00 AM

Comment
Successful Entrepreneurs are opportunitiy-seeker, value-creator and resource-allocator. They are basically bold, patient, resourcefull people. Can anyone be elected to become a successful entrepreneur? I do not think so. What is more, social entrepreneurs are tied to a social goal. This social awareness is generally fostered by a personal history and by the feeling that improving society is part of one’s personal fulifillement and potential. In this context, what business schools could do to people,that posess this predisposition to social entrepreneurship, is to equip them with a disciplined way of thinking and of approaching problems without forgetting that this training is not enough. The complexities of the reality demand that would-be social entrepreneurs deal swiftly and passionately with problems. Meanwhile, social entrepreneurs need to know that to succeed in their social mission, lifelong learning is essential. That’s why I think if business schools continue to think that offering a degree, or courses, will help people change the world, social entrepreneurs will overestimate their capabilties and underestimate the problems they might face. And their projects might pan out.
Business schools have to accompany entrepreneurs all over the time on a case-by-case approach. they ought not offer a one-size-fits-all education because Social entrepreneurship is not an easy stuff.
Posted by: Nayim Khemaies at September 15, 2004 11:53 AM

Comment
I think the issue here concerns the natural development of educational institutions. Social entrepreneurship is an inter-disciplinary field that does not fit square into any institutional department. For example, at Duke University courses regarding the nonprofit industry are taught in both the Sanford Institute for Public Policy and the Fuqua School of Business. Until social entrepreneurship and nonprofit management become large enough fields to procure the funding necessary to sustain an independent department or school, we should accept the current situation. And so long as business schools encourage an inter-disciplinary approach (e.g., required classes in social justice/policy, professors with a background in social justice/policy), our brightest minds are probably better used thinking about how to actualze social and nonprofit projects rather than what institutional department “houses” social entrepreneurship programs. I’ll only start to worry when social entrepreneurship programs start teaching classes like “Higher profits at all costs.”
I think this issue might stem from a social stigma that business and corporations are inherently evil, and social entrepreneurs should not get stained by their capitalist colleagues. I guess I don’t buy the presupposition that the word “business” corrupts everything ...
Posted by: Damien Hoffman at September 22, 2004 06:28 PM

Comment
Its strikes me as huge leap from the comments I made to Caroline, to the belief that this issues is because businesses suffer a social stigma, that corporations are inherently evil and that business corrupts everything! To be honest I get really tired of this kind of stereotyping and clearly much more needs to be done to break down the barriers between fields. But it is also important to try and draw in the brightest minds from other fields and with a range of experiences so that they can contribute to social entrepreneurial practice. Is this happening?
Posted by: Paola Grenier at September 24, 2004 01:07 AM

Comment
Social Entrepreneurship (SE) should not be mixed with the business entrepreneurship (BE). The basic characteristics and strategies relating to BE may be examined to find out how it/ these will foster the SE practices.
Profit is to be replaced by Value in SE. When Value gets predominant place in SE, it addresssed issue of sustainability of social innovation and intervention.
While profit is dtermined by BE based on the individual perspective and individual goal, the SE would put the group/society as precursor (s) in determining the value based SE.
Cognizance of profit in SE practices ofcourse would make the SE more a business alike movement. I feel this needs to be edited and SE practices should be looked more as combined drivers of social chnage and its continuity.
Business organisations are treated as a going concern so long it has positive networth. In SE organsiation the Networth is always positive if valued differently keeping in view the long term impact of the social intervention startegies.
In India we organsied poor farmer (who do not have any fixed assets/ resources) to undertake dairying and a shaped their activities into an innovative organisation set up - being manager by them. Quite tricky when the reasouce poor people manage resources worth few million dollar. The design and nurturing the innovative social organisation could plough back million dollars every day continuously. Society accepted the model and when fould that the organsiation pays regularly, they maintained the model.
Developing such SE model requires a deep communication & discussion with the beneficiries. Value (that I spoke above) should be visulaised by the beneficiries not only by the inventor so that the sustainability issue can be addressed.
Social Innovation can be invented with the beneficiaries. Academic social innovation looks better on papers and in power pint slides. Serious SE innovation practices should be put into right perspective - where the need for social entrepreneurs is felt.
There are instances where business entrepreneurs turnout to be a good social entrepreneurs. Such cases can be documented so address future generation to get into social entrepreneurship education.
Posted by: Prasanna K Dash at September 24, 2004 02:23 AM

Comment
Prasanna Dash’s posting brings back to me what was possibly the strongest messsage of the Skoll World Forum on Social Entrepreneurship in Oxford in March: that the new Centre for Social Entrepreneurship at the Said Business School in Oxford must not let itself become an academic ivory tower - Prasanna talks of ‘academic social innovation’ that ‘looks better on papers and in power point slides’.
Documenting cases such as Prasanna describes where social entrepreneurs, led always by the needs of the communities and guided by ?deep communication & discussion with the beneficiaries?, succeed in developing models that meet both social and business goals must be a valuable role for schools of social entrepreneurship wherever they are located.
I don’t think the issue posed by Paola Grenier was ever about implicit dislike and distrust for business. It was surely more about the need for those providing education in social entrepreneurship always to keep the social goals ? social justice for poor and marginalized people the world over ? to the forefront, not letting them be overshadowed by the need to be successful economically.
Posted by: Caroline Hartnell at September 24, 2004 03:41 AM

Comment
The diversity, difficulty and urgency of social matters around the world calls for a rapid revampimg of the methods and approaches of educating the spirit of social entrepreneurship, which is creating value for people, a lasting value. For this purpose, I think capitalising the knowledge created through experiences to help budding social innovators benefit from it. You may say: easier said than done, yet possible.
Posted by: Nayim Khemaies at September 25, 2004 03:12 PM

Comment
Paola,
I apologize if you misunderstood my comment and took it personal. I understand that you are dedicating years of your life to your inquiry—and your research is much needed.
However, if the proposed title of your article is ?challenging the dominance of business schools in the development of research and and education into social entrepreneurship,? then I see a presupposition that business schools are dominating the education process and such dominance requires a challenge. If we are concerned with balance, then we must concede that ideal balance will not exist until these programs grow and form independent centers on campus. Until then, business schools usually have superior financial resources, so I hope those resources are used for social projects that usually struggle for funding.
Further, nonprofit and social programs have been around for as long as I can remember. Isn’t the development of SE programs in business schools part of the much needed injection of economic and management sciences? When I took a nonprofit management class in undergrad it was all about social justice and completely neglected the management/business sciences. Apparently, nonprofit enterprises were not exhibiting an efficient balance, and the educational programs did not properly respond. In my opinion, this is why a new approach is being tested. Maybe we should be asking why business schools ended up incubating SE programs?
As I noted in my earlier comment, I think the exact location of these programs is less important than the inter-disciplinary ciriculum. If faculty possess diverse backgrounds and students pursue SE rather than business entrepreneurship, then I wonder whether the programs’ location matters? For example, a small percentage of law students pursue public interest law, yet these programs exist in what has become a corporate law prepatory environment. However, public law faculty have strong backgrounds in relavent fields and public law courses are tailored to the needs of students pursuing a career in public law. I see social entrepreneurship programs at business schools as an analogous phenomenon.
Again, I am not attacking you personally. I just respectfully disagree with the presupposition of your article. Isn’t that what this forum is for?
Posted by: Damien Hoffman at October 4, 2004 03:51 PM

Comment
This is a very interesting conversation. My name is Andrew Wolk, I currently teach Social Entrepreneurship at the Sloan School of Management at MIT with a dual course listing with the Department of Urban Studies in Planning. I developed the course in 1999 at Boston University and have also brought it to other schools in the area. It has been my experience that getting other schools/students at a University to take the course is essential not only for the course, but for change overall. The students outside the business school can use many of the lessons that are taught. The challenge is how to get different schools in a university to work together. In some schools it has been easy, in others it has been difficult.
Posted by: Andrew Wolk at October 6, 2004 05:59 AM

Comment
I am interested in the thought going on here, but there is an important missing dimension. I have worked in the Federal Government for 30 years and will transition to the private sector in the next several years. My fundamental commitment is to achieve planetary transformation to sustainability. In the nonprofit sector, I have helped start and run both experimental education programs at the secondary level and an accredited college that grants bachelors and masters degrees for community-focused professionals. I have both a masters of education degree and an MBA. Over my years of Federal service, I have experienced many predictable frustrations at attempting to work in the bureaucracy to accomplish important social missions. But, it is also apparent to me that every sector has its role to play. Thinking that real social change can occur through action in any limited sector is a delusion.
Government is an important kind of social technology, through laws, institutions, policies, social programs, and the ongoing decisions, operations, and actions of bureaucracy, from the political to the front-line. I currently work on international clean energy innovations for sustainable development—seeking to transfer technologies for energy conservation, efficiency, and renewables to achieve sustainability through security, trade, climate and environment, development and the economy. Our budget is miniscule, and the bureaucratic interference with our program is extreme. But, those of us committed to the mission have had to make use of the very rules of the bureaucracy itself to defend and keep the program alive.
We achieve our work through leverage both with the public and private sectors, both with nonprofit and profit entities, connecting technology researchers, business entrepreneurs and firms, social change advocates, government policy and decision makers in host countries, and local communities and people in developing regions of the world.
Many of the technologies being deployed to make a difference today in energy, climate, and natural resources were developed through Federally-sponsored research. But the actual innovations in both markets and social use require action in the profit and nonprofit sectors. Government policies can impede or foster success in other sectors. Government legal systems can both secure efficient economic transactions and equitable social outcomes and justice—or corrupt them.
All these points are obvious ones, but those who are actors in one sector or another often lose perspective on the essential roles of others in other sectors, and the relationships between those sectors.
There is, however, a connecting thread that, to use a cliche, concerns the shared paradigms of those who seek sustainability versus those who don’t. It is not whether some seek “profits” or others seek “value,” but whether these profits or values are put in the service of sustainability. Sustainability itself is a fundamental world view that too often differs in kind from what we in the West have been educated and acculturated to focus on or understand. We are instead concerned with efficiency, satisfaction, maximization, equity, and other values, but rarely relate the whole in terms of sustainability.
There are a few glimpses along the way of an alternative view, as with Buckminster Fuller’s classic “Operating Manual for Spaceship Earth” in which he defined “wealth” in terms of resources for future survival as far into the future as can be achieved through comprehensive anticipatory design science, albeit with its engineering hubris. Another was Schumacher’s “Small Is Beautiful—Economics As If People Mattered” in which he included a marvelous essay first published in the Manas Journal, on “Buddhist Economics.” Then there was the book by Victor Papanek on “Design for the Real World” that emphasized the “function complex” of methods, use, needs, telesis, aesthetics, and cultural associations. There was a classic essay on “cultural synergy” that attempted to explain the difference between peoples who attempt to work cooperatively and achieve high synergy effects versus those who seek competition and persistently suboptimize.
Over the weekend, I had a dispute with an economist over the question of whether the United States was making a positive contribution to the world with its modern form of “progress.” I observed that we are consuming 25 percent of oil, gas, and other fossil fuel resources, and producing an equal proportion of greenhouse gas carbon emissions, with less than five percent of the world’s population. I then noted that only twenty percent of the world’s population enjoyed the benefits of modern civilization while eighty percent had no realistic expectation of ever attaining, or being able to attain, our level of consumption. I asked if she thought our “progress” made sense in that context.
We might therefore contrast this modern myth of progress with the emerging paradigm of sustainability, and place both in contradistinction to the paradigm of traditionalism—regardless of what particular traditions are affirmed. Traditionalism seeks to maintain a legacy of common beliefs, practices, and knowledge passed on from generation to generation, and almost invariably fits with belief in a God or gods who somehow maintain the order of the world or universe. Modernism arose in contrast to this based on belief in the possibilities of science and technology to overcome the limitation of Nature, hence the myth of progress. That very progress, of course, depended on forms, sources, and uses of energy that have been building up to a potentially catastrophic environmental change.
The true challenge of sustainability is not merely how to envision and comprehend its possibility, design, or practice, but how to change behaviors and beliefs to embrace and attain it. Some years ago, the Harvard Business Review published to lead articles on the importance of sustainability to business. In brief, they noted how businesses that intended to stay in business needed to focus and plan for sustainability. At the same time, in noting that this would require rebuilding the world as we know it, the articles observed that these were business opportunities. Building a business strategy based on sustainability therefore makes good sense.
There are, of course, complications. Economics, as a science of scarcity, is blind to externalities. What is needed is a bioeconomics combining bionomics and economics as a science of managing sustainability. That suggests an important role not only for the profit and nonprofit sectors but for the academy in defining a new set of disciplines to operationalize the paradigm of sustainability, which then can inform the social technologies of government to act as a new framework for the practical domains in which the human conditions of reality are socially constructed.
All of this is part of a fundamental process of social innovation to achieve sustainability through transformation. That vision differs fundamentally from both traditionalism and modernism. It requires technical components to basic issues of survival, such as energy, water, and equitable allocation that differ from solutions that worked in the biomass fueled subsistence economies of traditional cultures, or in the fossil fueled effluence economies of modern cultures. The reality is that we are not there yet. We do not have either the social or material technologies to attain sustainability for the current human population and civilization. We have instead the idealism to pursue this emergent world vision.
With that, I would ask: How can the vision of social entrepreneurship and social innovation be broadened from its focus on profit and nonprofit business to include the governmental sector, and to acknowledge more explicitly the other sectors (the academy, religion, etc.). How can the challenges to individuals in any of these sectors be met with a common framework of ideas, disciplines, skills, actions to successfully pursue transformation for sustainability?
In reading about social entrepreneurs, for instance, the assumption is that these are individuals who act in contexts other than government. My question is why? In government, politicians make laws and set policies, but bureaucrats enact these laws and policies through their actions to operationalize them on the front-lines. When politicians seek to undermine Constitutional rights with repressive policies, for instance, what can bureaucrats do to humanize the reality. To often, we ask the opposite question, which is how do bureaucrats dehumanize the presumptively enlightened policies which academics often seem to see themselves as educating the decision makers to make. In my experience, lowly bureaucrats need to be empowered to manage up, and not merely continue to be subjected to administrative control. In fact, the essence of Federal employment is to uphold Constitutional principles, to which we swear an oath. Our oath is not to carry out the orders of superiors, or to even implement the laws of politicians, but first and foremost to support and defend the Constitution, which remains paramount. Moreover, Federal employment carries a property interest and right of the incumbent, unlike the at-will employment of the typical private sector employee. This means that Federal employees actually have an authority independent of their superiors, which they can use to resist good or bad policy.
In any field of endeavor, the fundamental orientation or world view of those engage in an enterprise does matter. There is no doubt that good can result from ill intent, and bad can result from good intent—the proverbial road to hell being paved with good intentions. But, how can the likelihood of achieving good from the right intent be increased? That is the purpose of any professional discipline. How do we create an effective professional practice of sustainability in all fields of human endeavor? That is the core challenge of social entrepreneurship and innovation.
Posted by: Richard Moore at October 24, 2004 09:50 PM

»» Posted by: Caroline Hartnell on November 12, 2004 01:10 PM

I’m currently a Master of Nonprofit Management student at Regis University and I would like to comment on Richard Moore’s observations on sustainability.  I think his thought that it is about “how to change behaviors and beliefs to embrace and attain it” is enormously important.  In fact, I would go so far as to say that this thought process is central to Social Enterprise.  Incorporating sustainability, traditional business methods, and effective program management by thoughtful and ambitious people is going to require a “change in behaviors and beliefs to embrace and attain it.” My question is, how can that be done in practical terms?  Some comments above offered dual degree ideas.  Or, as Andrew Wolk pointed out, attempts to “get different schools in a university to work together.” What is the current status of these efforts and what shape will they take?

»» Posted by: Michelle Carns on November 15, 2004 02:18 PM

I agree with Damien that Social Entrepreneurship is a field that does not “fit square into any institutional department”. But I think that is okay. To work together does not mean the two fields have to be alike. They can achieve the same goal of success, but the success will fit their mission, whether. Frankly, I think that business schools can learn from the non-profit segment more valuable information than the other way around. In the topics of ethics, caring, social justice, and helping others; business majors would tap into an area of themselves that may be forgotten while they are trying to achieve material success. If they were more aware of their inner selves that do exist, they would realize that the pool of “all costs to achieve higher profits” might be more satisfying. Also, social entrepreneurs may benefit from a more rounded business background. With the right learning tools from a business background, a social entrepreneur may be able to reach the goals set by the organization’s mission with more ease and financial stability. In my opinion, they have been separate for to long and could stand to learn from one another.

»» Posted by: Paula Berkel on November 16, 2004 05:24 PM

A couple days ago I asked a friend to review the annual report I had just written for a small nonprofit. I had made every effort to present the organization in business terms in an attempt to show that the nonprofit was, by business standards, very successful. With an MBA fresh under his belt, he launched into his analysis, demonstrating crafty awareness of business metrics. Yet when it came down to it, he missed the point. His precise analysis failed to include the soft and gushy social value that the organization produced. He knows the operations well, yet almost discarded this value as an aside.
What struck me was that his training didn’t allow him to stretch a little and creatively consider the mix of social and monetary return. There was no interdisciplinary analysis.
This is not the first time I’ve run into this mindset with MBA students. But I’ve also seen far too much lack of structured analysis from nonprofit practitioners. I want to learn the language of both, so that I can explain one to the other, and draw the best from both. Leave the single bottom line to the greedy and needy. Social Entrepreneurship requires so much more to balance double and triple bottom lines. If the training begins in a business school setting (for now), that?s fine. But lets then take it to a higher place with the skills and soul that demonstrates to all sides the value, and potential of SE.

»» Posted by: Read McCulloch on November 17, 2004 01:33 AM

In response to Richard Moore’s very in-depth comments regarding how to connect all sectors through a paradigm shift to a sustainabiity model.  I think advocacy is one way to raise awareness.  I also think it makes sense to start at the academic level by creating interdisciplinary fields.

As to the “balance” between social and business entrepreneurial training, I think social entrepreneurs only benefit by learning the rules of economics and to play on the private sector field.  Management structures have been developed to a science in this area.  It is crucial that we as social entrepreneurs don’t underestimate the necessity and effectiveness of well researched and defined business plans, accountability structures, and ethical accounting practices.

The survival of a nonprofit enterprise can rest in its leadership’s ability to understand the complex financial relationships between the sectors.  Venture capitol is the wave of the future for these enterprises if they are to focus on their missions and have the freedom to explore and expand into more global relationships rather than being dependent on special interest money, donor contributions, or government grants alone.

Business has fostered some of the most creative minds through innovations in management style and the free market economy.  For example, WL Gore (Gortex) organizes their R& D staff into small teams of Associates and Sponsors.  There is no “boss” or heirarchical management.  Committees evaluate employees and decide compensation.  Everyone gets to know, and is accountable, to everyone else.  Anyone can, and is encouraged, to lead an innovation they are passionate about and have a following for.  And here’s something interesting, failures are actually celebrated.

Bang and Oelufson is another interesting organization that encourages creative innovation.  For example, in a recent marketing strategy they spent virtually no money for a gala event that introduced a new very high-end product ($17,000 audio equipment).  They partnered with American Express (to handpick guests), Bentley (to pick them up), and had the very expensive food donated.  They actually netted $100,000 in sales!  What could we as nonprofit enterprises learn from that about target audience?

If there is an imbalance I would suspect that it is on the side of business institutions and their students, as several have commented above.  In the wake of the Enron scandal there is a new focus on ethics in business and accountibility to mission.  As I see it the time is ripe to expand our notions of the segregations between the sectors, develop partnerships, and begin addressing the issues of global sustainability that the flow of information technology makes it difficult for any of us to ignore.

»» Posted by: Judy Yazdi on November 17, 2004 02:55 PM

I would also like to comment, as a student of social enterprise, it has been my experience that there is tremendous respect for the forprofit sector at least at the academic level. Personally, I recently read “Authentic Leadership,” written by Bill George, retired CEO of Medtronic.  He outlines the character of good policy leaders, ethical practices, and defining one’s authentic self, which is necessary to transcend any circumstance in personal or professional life.  I found it remarkable that a high-profile leader, with a life time of experience chose to write about such fundamental issues in book about business management, rather than focusing on his personal bottom line success.
There were no formulas, no charts and tables, but rather the examples of businesses that practice putting people and mission first (in that order) then looking at bottom line results.  He actually states that the customer comes before the stockholders or directors.
There is a story in the book about a manager that he had hired himself, sent to a plant in Italy, that got into trouble because he began to compromise the company’s ethical practices in order to “do as the romans do” to take care of business. Bill George points out that authenticity means you practice the same ethics no matter where you are or what company you keep.
That’s integrity.

»» Posted by: Judy Yazdi on November 17, 2004 04:19 PM

I think that when nonprofits worry about thinking too much about business, they are forgetting that they are businesses.  They have employees, financial statements, insurance, accountants, etc, just like any other business.  I understand that many people in nonprofits worry that having too much of a business mind-set can distract them from their mission, but I think the main issue is that to remain competitive (and nonprofits do compete with each other for funding), nonprofits need to make sure that they are running as efficient businesses.

I think business becomes a “dirty word” to nonprofits because very few businesses put customers before profits.  However, I think this gives nonprofits a unique advantage.  Nonprofits always put customers first because they are not beholden to shareholders and investment analysts.  Nonprofits are able to leverage this “social capital” because when they speak, they generally get more respect than a forprofit business that is usually seen as out for its own interests.

To be successful, today’s nonprofits need to combine their social sensiblities with their business sensibilities.  This is how they will be able to make the biggest impact.

»» Posted by: Tory Pearson on November 17, 2004 06:37 PM

I agree with many of the above statements. I believe that the characteristic “lines in the sand” that have been drawn between the nonprofit and for profit sector will eventually be washed away with each “new wave” of social innovation and foresight. The benefit of today’s technology allows us to access a multitude of information. However it is still the ability to take given information and create new knowledge that ignites change, and knows no sector boundries.  A non-profit business that is unveiling new social ideology with the expectaion of reformation must incorporate a long-term for profit strategic methedolgy to diversify and manage risk to be successful. The thought that social change must be accompanied by organizational instability or protest and arrest is short sighted, and is a discredit to the passion that drives each of us. Don’t get me wrong , activism has its place, but it is only a small part of the greater picture.  The desire to impact the present to make a better future inspires us all. Partnerships that combine resources from unique individuals from all sectors create building blocks that form solid, long-lived foundations. Reaping the benefits of talent, ingenuity, integrity and vision is always profitable in the true sense of the word, and in turn, serves any mission.

»» Posted by: Patrick Tennyson on November 18, 2004 04:38 PM

I don’t know if this forum is still active, however, I wanted to make one additional point. I have just reviewed the numerous comments and all of them are quite valid and well conveyed. What I see consistently throughout these comments is the fact that so much of the success of the blend between corporate, nonprofit and government comes down to the knowledge, style and heart of the leader and/or leaders at the helm of a social enterprise. Without great leaders, a well-intentioned business, government or nonprofit can easily fail. Whether its leaders who, in and of themselves, have the skills and passion to single handedly start a grassroots effort to change the world, or whether it is a leader who is excellent at surrounding themselves with good people who can change the world, you must start with excellent leadership.

I would love to have an additional forum to discuss the qualities of the type of leader who can lead these initiatives. That’s the type of person I want to learn from, whether I’m in an MBA school, a school of public policy or a school of nonprofit.

Would love to hear others comments.

»» Posted by: Teresa Felten on November 23, 2004 09:44 PM

I read with a lot of interest the dialogue on the subject. I come from Rwanda, in a way the embodiment of development country challenges from an economic and social perspective. In a sense I see the social innovation discussion more biased towards experiences in the developed world...correct me if I am wrong. Yet it is in the developing world that the majority of the poor live. I am doing a study ( Haas School of Business, UC Berkeley)to look at aspects of entrepreneurship and innovation- social and business-in subsaharan Africa and would welcome continuing dialogue that would increasingly encompass this area as well.

»» Posted by: Theogene Rudasingwa on December 23, 2004 08:16 AM

There is still another -and too often missed dimension-the ordinary people as the innovators. We live in a world that has been accustomed to think that important work which carries human society forward is done mainly by the holy triumvirate: Government, business and not-for-profits. But consider these two aspects: In the developing world, where the 5 billion live on less that two dollars a day, the three forces do exist at varying degrees but they are yet to make any sizeable and meaningful impact on the living conditions of the poor. Given this scenario, the poor have learnt to innovate in very modest steps so as to survive, however marginally. What, therefore can government, business, and not-for-profits learn from the grassroots? I agree with those who call for a paradigm shift, and a new leadership that learns as much as it leads. An “empowering engagement” with the people through a multi-dimensional co-operative effort is an indispensable component of the way forward.

More importantly, there is a gap...in fact a “gulf”...between the “right ideas” that government, business,and not-for-profit have in their arsenal against poverty and execution. There is so much that we know, if implemented, would go a long way in reducing the levels of poverty. Too often we put emphasis on lack of resources. But even with the limited resources, rationally used and properly targeted, we could begin to register progress. And small success stories would generate the momentum for the next ones.

Another summit, another report, another study, another initiative...could these partly explain the inertia and procrastination? These are ok, and they help the push to understand and learn. But without action they breed cynicism that is widespread in developing nations because very often high expectation due to these high profile ventures has been followed by disillusionment. I have always wondered what would happen if there was a freeze on all the summits of the United Nations, World Bank, IMF, African Union, European Union, G8, International and National not-for- profits, business etc..say for 5 years. Business can still be conducted , say online and by other means. What savings would we make? And with this moratorium on summits, suppose the focus became implementation, implementation and implementation? The next summit would then review the results!

There are those who have become impatient with the business of waiting for dramatic results. We need to know them, amplify and multiply their lessons. And the ordinary people are the first among the ranks of doers!

»» Posted by: Theogene Rudasingwa on December 30, 2004 07:55 PM

In “The Emerging Sector Revisited” (1999), Lester Salamon states that “negotiating the dual dangers of over-bureacratization and over-commercialization becomes thus the true challenge for nonprofit managers and policy-makers.” He makes the point that the nonprofit sector is in danger of losing what makes it unique by becoming bureacracies indistinguishable from the government entities with which they interact, or becoming evermore like the businesses with which they frequently compete.  So the question of whether social entrepreneurship has too much emphasis on the business side also needs to be looked at in the larger context of the dynamics between the profit, nonprofit and public sectors, along with the implication this trend has for the future health of the sector. 

No one will argue that traditional forprofit business techniques such as illustrating effectiveness and efficiency are necessary for nonprofits to demonstrate the worth of what they do.  No one will argue that nonprofits have a bottom line, and applying forprofit business financial management strategies will help ensure that the sector be more financially solid.  What no one has made a good argument for is how to ensure that the social justice role, the advocacy role, the civil society role of the nonprofit sector do not get lost in the rush to import that business side to social business ventures.

The question is not so much whether the business emphasis is a good or bad thing for nonprofits.  The real question is how to maintain the proper balance so as to not lose what is special and unique about the nonprofit sector.  Everything comes with a price tag. What price will the sector pay for the trade-off of earned income?

»» Posted by: Cindy Wiemold on January 24, 2005 12:57 AM

The comments made above really give such great answers to this question of balance between nonprofit and business. But, do I feel the balance is right? Not yet.  I live in Rural Colorado and I am seeing many nonprofits struggling because they have no idea how to operate “like a business”.  I have also seen many disappear.  These nonprofits do want to “change the world” and help maintain our quality of life, but have forgotten that the fundimentals of operating a nonprofit are not that different from operating a “for-profit” business. I hope this movement continues and nonprofits are able to acheive success through the availability of resources that teach them to be better managers.

»» Posted by: Andrea Anderson on January 24, 2005 03:48 AM

Several people have touched on the subject of balance in response to this post.  It seems to me that the scales are tipping.  No nonprofit wants to lose their “heart” when taking on a business venture, but lately nonprofits have been forced to find a new balance.  Sarbanes-Oxley disclosure, watchdog organizations, boardroom challenges—each of these is going to contribute to nonprofits needing to act more like for profit businesses.  So I don’t necessarily think it’s a bad thing for nonprofit leaders to grow in their business skills.  In addition to believing in a mission, fulfilling social goals, and motivating a typiclaly underpaid staff, nonprofit leaders also have to respond to the fiscal transparency that is demanded by society.  In today’s AFP’s e-Wire, an article was entitled “Fundraising Competition Increases as US Charities Number 800,000” (January 25, 2005). In NewsHour with Jim Lehrer: Venture Philanthropy (December 28, 2000), Paul Solman laments that he sifts through piles of charity direct mail and doesn’t have a clue who to support—and suggests that a revolution is in order.  Nonprofits are going to have to revolutionize themselves—including bringing more business-like practices into their operations—in order to compete not only for charitable dollars, but for earned income.  So, the question being, How do nonprofits strike a balance so that they don’t become “tinker”?  Planning, training, education, leadership, innovation, and above all, a commitment to serving others.

»» Posted by: Tara O'Keefe Gohr on January 25, 2005 01:14 AM

As the number of nonprofits grows, the competition for donors will intensify, as will the need for accountability.  For a nonprofit organization not to recognize the need to take on stronger business profile could put the organization in jeopardy.  However, finding the balance between becoming more business-like, and maintaining the passion and uniqueness that embodies the nonprofit sector, is certainly a challenge.  “Are we getting the balance right?” Probably not yet, but managing a nonprofit as a business is a relatively new concept to the sector as a whole, and one that will take time to perfect.  The more business oriented a nonprofit can become, the more likely it will see sustainability, which will in turn lead to greater progression towards it’s social cause.  The sector no longer has the luxury of relying on government support, and the younger generations of philanthropists are more geared toward social enterprise than simple contributions (Assessing Venture Capitalist Approaches to Philanthropy, pg. 8). Therefore, I do not believe that it is possible for a nonprofit to become too business-like.  The catch I see, is that they do not lose their “nonprofit-like” qualities as they become more business oriented—these are two separate factors, I believe.  The very nature of a nonprofit organization differs so much from a business (the purpose being a social return rather than a profit), it would take significant mission drift for a nonprofit to lose sight of the characteristics that grant it tax-exempt status, especially considering the emphasis on accountability and outcome measures.  Though the social enterprise model may create a different breed of a nonprofit, the core values and qualities remain intact.

Resource used:

Capers, C., Collins, M. & Gooneratne, S. (1998). Assessing Venture Capitalist Approaches to Philanthrophy. Retrieved Jan. 23, 2005, from Prodigy website: http://pages.prodigy.net/michael_collins/VP/VP.htm

»» Posted by: Tricia Hanson on January 25, 2005 06:46 PM

The emphasis today seems to be on non-profits becoming business-like or businesses themselves to generate revenues other than the traditional avenues of grants and such.  People question whether such visions and plans will demote the social values and missions into for-profit ones or can the NPOs keep their missions intact while generating income.  Many NPOs are doing both as they have developed for-profit areas to generate revenue for the non-profit side fo the house.  Another method is to make one of the programs self-sufficient by introducing fee-for-services that do come from private pay sources such as individuals or insurance companies.  However, these types of programs also rely heavily on government insurance or payment programs and are not totally stand alone revenue generators.

Programs that are stand alone ideas have the best chance of success, I believe.  The Board of Directors can select an executive director for the for-profit venture who is business savvy and experienced and make decisions based on sound business principles.  The social missions are run by social experts who do not have to change their missions then.  The for-profit ED can focus entirely on raising revenues while the Board decides what revenues go back into the for-profit venture and the rest goes to the NPO programs.  I like this approach as both EDs can focus on their speciality areas and the NPO overall benefits greatly.

One area of concern is that if the for-profit is under the umbrella of the NPO, that revenues are not too great, incurring tax penalties.  Also, the NPOs have to be ready to invest start-up funds and wait for the venture business to become established and making profits.  Also, as the article suggests, the for-profit make command all the attention of the Board and CEO and the NPO side slides due to lack of attention.  Separation of the two ventures allows the Board to balance the support and emphasis.  Balance is the best approach to this new thinking; generate revenues without losing the social vision.

»» Posted by: David Hays on January 25, 2005 11:48 PM

The key is can nonprofit organizations(NPOs) maintain their missions while generating earned income?  Personally, I would love to see NPOs succeed in this arena.  After witnessing first-hand the financial struggle of many NPOs that once totally depended on charity donations it is quite evident that something must change in order for these NPs to maintain.  Many NPs no longer exist for this same reason.  Can NPs find the appropriate balance?  It makes sense to me to invest into a social cause rather than just donating short-term.  I see venture philanthropy as a solution to social issues and problems. 

What would you rather have a million dollar idea or a million dollars?  I am seriously concerned about those who chose a million dollar idea.  What good is million dollar idea without the financial backing?  My point exactly, it will go no where.  But if I have a million dollars then I can finance the million dollar idea.  Regardless of what passion we have for whatever social problem it takes money to solve these problems.  In the word of God it states that “it is God who gives us the power to get wealth.” It also states that “money answereth all things.” The way I see it we must have finances to solve problems. Tim Zak, President of the Pittsburg Social Enterprise Accelerator states that he sees “a meldling of norms among for-profit and nonprofit entrepreneurs.  This melding is apparent at the recent Coop America Green Business Conference.  There, for-profit and nonprofit attendees represented firms that are taking on the charge of social change as part of their business model.  Business has created much of the mess in the world is in today, and it’s up to business to solve problems they’ ve helped to create.” I firmly believe that diversification of income and retrofitting the NP to the for-profit business will bring the appropriate balance to the NPs.

»» Posted by: Tanya C. Nash on January 26, 2005 06:29 AM

As Nonprofits become more competitive in the search for financial stability these organizations take on a more business like approach. It seems as though all three sectors, business government and nonprofit, are becoming more similar, exchanging ideas and practices as well as information. Because of this blending and the current philanthropic state of the country, pre tsunami, nonprofit organizations are becoming more business like. Blending theories of nonprofit management and venture capital, or venture philanthropy, is one way for nonprofits to navigate through the current atmosphere of budget crises and reports of fraudulent actions. The scheme of blending financial assistance to nonprofits from venture philanthropists and the advisory assistance with which it comes is an opportunity for nonprofit organizations to emerge as strong entities with solid product and business acumen as well. The nonprofit arena is filled with driven, passionate, people who lack solid grounding in business. Teaching these passionate people to thrive in a competitive world is key to their success. Becoming more businesslike is an opportunity to diversify funding and skill in a nonprofit organization. It is a step towards becoming sustainable and managing risk.

I thought of one opportunity where the business wold is moving toward consumer driven or nonprofit like practices as well. The revolution of marketing brought about through the Internet has also brought about a revolution of consumers. Businesses can no longer sellÖsellÖsellÖit is no longer about forcing a need on a consumer. Marketing through the Internet is much more akin to nonprofit theory, it is about scanning the target market and learning about their needs and then attempting to meet those needs. Marketing has become consumer driven, which is a key aspect of the nonprofit industry, meeting the constituents and learning their needs, and how to best address those needs creates loyalty to an organization and corporations are discovering that and using it through their marketing strategies.

»» Posted by: Emily Stewart on January 26, 2005 06:41 PM

Most of the recent posts on this weblog have focused on the issue of balance between the social and the business ësideí among non-profits ñ not surprisingly, as this was the issue originally posed!

I wonder if thereís another way of looking at this that doesnít involve so much of a trade-off between the two (Cindy Wiemold, 23 January) or such a sharp demarcation between the business and the non-profit ësideí? Iím currently working flat out trying to get the March issue of Alliance magazine to press. The special feature is on social entrepreneurship, so Iím steeped in this discussion.

What is coming through to me more forcefully than anything from the stack of contributions Iíve been reading is that social entrepreneurship is primarily about the qualities of individuals rather than the qualities of organizations. Social entrepreneurs (according to this way of looking at it, at least) are people with ideas that could bring about social change on a large scale and the creativity and determination to put their ideas into practice. These are people who will do whatever it takes to realize their goals. Whether the organizations they found are formally non-profit or for-profit is a matter of expedience, and they will borrow from each sector whatever is valuable and relevant for the achievement of their goals.

I therefore take issue with Tanya Nash (26 January), who would rather have a million dollar idea than a million dollars. A true social entrepreneur is someone with a million dollar idea and in pursuit of that million dollar idea they will generate far more than a million dollars. I recently interviewed Fazle Abed, founder and president of BRAC in Bangladesh, possibly the worldís largest non-profit organization ñ a most impressive person. One of BRACís programmes was to introduce a million women to poultry-rearing. But the hens needed to be vaccinated and the government systems for storing and transporting vaccines werenít good enough, so BRAC worked with government to change these and trained women as vaccinators in each village. Then there was a problem with the breeds of hen currently available, which were not very prolific layers, so BRAC set up its own poultry-rearing business. But then there was a problem with chicken feed: the best feed is maize but there was no maize grown in Bangladesh. So BRAC formed a joint venture with an Australian farm and established maize-growing in Bangladesh. And so the story goes on. Whatever was needed to achieve their goal ñ working with government, establishing maize growing, setting up new businesses ñ BRAC did. Fazle Abed told me all this in a most matter-of-fact way as if the obstacles encountered had been quite trifling ones.

Of course the world is never going to be made up of Fazle Abeds ñ if it was, the world would be a very different place now. I accept the trade-off issue is much sharper if what one is talking about is a struggling non-profit in rural Colorado deciding to develop earned income to support its mission-related activities. Especially if the income-earning activity isnít related to the mission, it could have the effect of absorbing time and energy that would otherwise have been devoted to mission-focused activity. But there is surely something in the unified, mission-focused approach of these exceptional social entrepreneurs that even the smallest struggling non-profit can learn from.

»» Posted by: Caroline Hartnell on January 27, 2005 12:46 AM

This is a great string on a topic that is absolutely central to the evolution of the third sector/civil society worldwide today.  Thanks to you all for very thoughtful comments.  As I read through them, I see three central questions:  1) Can a strong move toward quasi-commercial income-generating enterprise cause a nonprofit to veer away from its social mission?  2) Can an over-emphasis on operating the nonprofit itself “like a business” negatively change the character of an organization?  3) If the object is social problem-solving, does it make any difference whether the problem is solved by a nonprofit, for-profit, or governmental entity? 

My answers (unlike those of many who champion social entrepreneurship) to all three is a qualified “yes.” And for the same essential reason:  The MEANS matter.  It does make a difference whether the basic motivation and cultural framework within which one is working is market-driven, social-benefit oriented, or that of a governmental institution.  True, “sector-blurring” occurs and there is a mixture of movtivations in every area, but the centrally guiding set of values differ fundamentally among the three.

I realize this opens a very long and basically philosophical discussion, but it is important to add these points to the mix.  There is actually a close relationship between this discussion and another one just begun in this Forum, inspired by an article in the current SSIR by economist, Burton Weisbord.  See “The Pitfalls of Profits” on this site.  Weisbrod pushes this argument to its edge by suggesting that nonprofits should get out of commercial ventures altogether.

»» Posted by: Bruce Sievers on January 27, 2005 08:51 AM

Browsing the discussion threaded through these postings it occurred to me that the conversation happening here seems to be closely related to an issue I frequently struggle with.  I frequently feel challenged by what one colleague defined for me as the debate between reform and revolution.  Do we commit to continually reforming and working within a system that frequently perpetuates inequity, in this case using social enterprise to level the playing field with capital enterprise, or take the route of revolution to dismantle the system in the hopes of implementing a better system, here denying the value to be harvested from the free-market in an effort to maintain and build the perceived sanctity of our own sector?

As much as I detest the negative impacts of the free market on society, I perceive the market to be a tool that can help to facilitate the health and vibrancy of the communities I work with.  I think that because the profit sector contributes to some of the social ills that necessitate some non-profit work, the sector should also contribute to a solution.

Much of my experience in the nonprofit sector has felt like a race for survival.  Philosophical rhetoric aside, from a more practical perspective, some days itís difficult enough to get the programming piece of my work down much less have enough time and energy in reserve to address the funding piece.  My work is legitimate and contributes to the social wealth of my community and what appeals to me about social enterprise is the opportunity to let my community decide whether or not my work is worthwhile by providing a product/service as an option for consumption which then lends to self-generated support rather than feeling as though Iím dependant on the whims of funders for the survival of programming to meet the needs of my community.

I think that the social enterprise that is most at risk of operating from a place of imbalance is what arises from the academic world of business schools.  Grassroots efforts by communities to create a system of sustainability through social enterprise ventures are most likely to avoid this imbalance as I think these efforts are more likely to arise out of a true assessment of community needs.

In case Iíve failed to make any sense to this point, I conclude with the following thought.  In a report from the Kellogg Foundation titled ìBlurred Boundaries and Muddled Motives: A World of Shifting Social Responsibilities,îAllen Grossman of the Harvard Business School says, ìWhen there is tension between the forces, a for-profit will be biased to make return higher.  A nonprofit will be biased to choose the mission.  The ends of the spectrum arenít the problem; itís the middle thatís hard.î

»» Posted by: Veronica Garcia on January 27, 2005 10:05 AM

I realize that I am late in posting to this blog. I am taking the Regis class on Nonprofit Enterprise as an independent study. It is too bad that this thread does not seem to be active. I would enjoy actively participating in it, nonetheless here are my comments.

I direct an inner-city youth center located in Terre Haute, Indiana. The center is part of Catholic Charities of Terre Haute and we have been opened for over 22 years. I have been the director since we opened our doors.

I see both links and divisions with for-profit and nonprofit organizations. First, I agree we are all businesses. Most nonprofits are in the business of changing people’s lives, an intangible item. Most for-profit businesses deal with items that are more tangible and sell products.

My youth center survives with the help of many volunteers.  Our volunteers come from all walks of life and include college students, business owners, and people on disability. They all bring their special gifts to the table. They all have different personalities and views regarding our programs. The children that we work with primarily live in poverty. Our job is not only to pull them out of their impoverished life but to change their cultural perspective.

In the past two years, we have tripled the size of our facility. We now have much more room to seek additional avenues for funding. Nonprofit enterprise is definitely one of those avenues.

The first problem that I see is what happens if the enterprise is extremely successful? Will this success and money change our mission statement? Will we change our programming to better accommodate this new venture? What will our strategic plan look like if the venture becomes a success? These are all very practical and ethical questions that need to be addressed.

For years, I have struggled seeking funding for my youth center. Amazingly, I have never found one grant to fund all of my programs. Even United Way is program driven and does not care about additional programming that they do not fund.

I have found numerous grants, some providing large portions of my budget and others providing smaller portions. I have struggled with maintaining a balance among programming even when funding was disproportionate. Every volunteer and person on my staff feels as if the program that they are involved with is the most important. Not only do I struggle between funding but also resources and time.

I have seen many nonprofits change their missions when they find additional funding. I think that the struggle to keep one’s mission “pure” is an on-going struggle for all nonprofits. Adding a business venture to this struggle is not impossible.

I agree that it is important to have the right leader. Since most nonprofits are in the “people” business, it is important that the leader has compassion and communicative skills. It is also important for that leader to be able to see the “big picture” and have the ability to make judgments balancing both the “people” issues and the “financial” issues.

I believe with the right leadership and the perspective that the business venture is part of the agency, not the agency, nonprofits can use business ventures to help support their budgets financially and use the same ventures to change the perspectives of those they wish to help.

»» Posted by: James D. Edwards on March 27, 2005 02:15 AM

Social entrepreneurship is a process. It starts with problem identification and the last stage is institution building / HRD activities for social cause. It is the process in which a person is involved in a social mission. The process of social entrepreneurship is a theme of research and study for today and tomorrow. I am willing to share my findings on social entrepreneurship with others.

»» Posted by: Dr Trilok Kumar Jain on January 11, 2006 02:13 PM

Something that I have been thinking about recently and would love to hear others’ thoughts is the boundary around social entrepreneurship.  How much social value should an entreprenuer generate to consider and label themselves a “social entrepreneur”?  In what I have read it seems that it is dependent on whether the mission revolves around social impact.  I wonder if this is enough? What if a entrepreneur creates social value in one sphere, but harm in another - like raising awareness around one issue, but acting in an environmentally destructive way in order to raise that awareness? 
Social entrepreneurship seems to be the rage these days, but I wonder if there needs to be more rigorous thinking around setting standards.  any thoughts?

»» Posted by: Genevieve on April 13, 2006 06:37 PM

This is a valuable debate and as a current law student at Stanford, I appreciate that practitioners are taking the time to share their knowledge and experiences with the rest of us. I am currently conducting research on the impact that the rise in venture philanthropy has had on social entrepreneurs. More specifically, I am interested in learning how social entrepreneurs themselves believe that they are hurt or helped by the increasing emphasis on incorporating private sector principles in the public sector. To this end, I invite anyone who has experience in philanthropy to consider completing a short survey, available at: http://www.zoomerang.com/survey.zgi?p=WEB2258P5TEMMX.

I am seeking to explore issues such as which entrepreneurs are denied access to venture philanthropy (such as those who may be less educated than others); how changing performance measurements affects the mission of an organization; and whether private sector experiences equip social entrepreneurs to be more competitive for funding. This survey is intended to get a sense for the actual challenges faced by practitioners in the field, and to determine whether applying more business-like approaches are actually the best way to meet the demands of their jobs.

I will be compiling the results beginning on April 29, 2006, so surveys completed by then will be most helpful. Any insight into the practitioner’s daily experiences would be very helpful, and I am happy to share the results with anyone who may be interested. Thank you in advance for your participation, and for your on-going service to communities in need.

»» Posted by: Chantale Fiebig on April 23, 2006 02:39 AM