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Social Entrepreneurship: What’s the Focus?

By Tom Watson on March 28, 20074 Comments

Edward Skloot has been involved in what is now popularly known as social entrepreneurship for a long time; he’s the executive director of the Surdna Foundation, started New Ventures back in 1980, and is a board member of Venture Philanthropy Partners. So when he speaks, two things happen – he tends to frame his thoughts in the long term, and he wears his skepticism rather proudly. Though a friend to the social entrepreneurs, Skloot brings a perspective from a career in government, in the foundation world, and as someone involved in venture philanthropy – the catchphrase of the late 90s.

At this morning’s panel, "Funding Ideas, Backing People," Skloot kicked things off by saying the social entrepreneurship "does not yet have a firm place in the lexicon and brainspace of those who think of themselves as entrepreneurs, social or not."

Skloot – who once gave a speech entitled "25 Years of Social Entrepreneurship in 25 Minutes," said the record in the sector "is mixed at best." He said that historians of the movement will ask five basic questions – and therefore, Skoll participants should ask the same ones; roughly paraphraising, they are:

  • are we generating useful knowledge
  • is some kind of institutionalization happening
  • is it crossing barriers
  • is it scaling up in terms of attracting capital
  • are we gettig the right outcomes

Jacqueline Novogratz, CEO of the Acumen Fund, was the perfect bookend to Skloot – placed there by writer David Bornstein, after discussions on capital-raising (let’s call it "fundraising," ok?) by JB Schramm, founder of College Summit, and venture capitalist Ion Yadigaroglu. Novogratz focused on Skloot’s first question for historians – the one about useful knowledge, and she shifted attention and emphasis from the donors – sorry! I meant "investors" – to poor people.

And it was a brilliant shift – because as the talk meandered through fundraising techniques, it was very easy to fall into a we/they scenario. "Poor people are left out of the global economy," she said, recalling a discussion at Acumen when she reached a crucial realization – that social entrepreneurship was about extending capitalism, changing the capitalist system to offer opportunity for the poorest human beings.

"I said look where this field is hurtling us toward – that’s the future of capitalism…The first thing we need to do is to find entrepreneurs that look at the poor as viable customers, and not as passive recipients of charity."

Social entrepreneurs tend to see "capitalism as the driver of change," Novogratz said. But since the dawn of the first industrial age, it has also created an insurmountable gap between rich and poor, powerful and non-empowered. Because of the newly-wired world, " for the first time in history, the rich can see how poor the poor really are – and the poor know how poor they are."

Novogratz touched on some of the points that Nobel Prize winner and Grameen Bank founder Muhammad Yunus hit upon last night in the gathering twilight under the Sheldonian’s ancient beams – that "social investing" shouldn’t be just about "helping the poor," but should actually involve the poor. She described product, specifically some well-designed mosquito netting aimed at the poor. "Rich people should not have a premium on beauty, on comfort, on design, and on liveability – there’s a power in the market that if combined with empathy and compassion can lead to soutions."

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  • alishamf says:

    Interesting comments by Novogratz- it is this same model that informs the selling to the bottom of the pyramid models as well.

  • Susan Carey Dempsey says:

    I think the reduction of the we-they dynamic may be as important a trend in philanthropy as any new models of giving (or investing) may be. It’s always been the downside of traditional philanthropy and a shift in this focus not only makes for better philanthropy; it is a better social contract, to my way of thinking.

  • Tom Watson says:

    Susan – I agree with you. And as with other revolutions, there may be some blood-letting along the way. Particularly our US foundations and large 501c3’s will feel challenged and attacked.

  • Kate says:

    Tom – Is Skloot claiming that historians will measure the movement’s success by its ability to scale up and become institutionalized? Is there danger, if these are the goals to which they should aspire, of these ventures becoming the foundations and large 501(c)3s you mention above?

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