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What Social Entrepreneurs Think (Hint: More Capital Needed)

By Tom Watson on April 2, 2007No Comment

One of the highlights of the 4th annual Skoll Forum for Social Entrepreneurship at Oxford was the release of an in-depth survey marking the current attitudes of people working in the sector. Growing Opportunity: Entrepreneurial Solutions to Insoluble Problems, by SustainAbility, Ltd., gave a clear-eyed snapshot of social entrepreneurship and its conclusions identified several clear challenges to the movement.

The first is money: fully 72% said raising money for their social ventures was a problem, and 74% said they were primarily funded by that very old-school financial instrument – the foundation. And the report acknowledged that social entrepreneurship remains a small slice of philanthropy right now:

To put rough numbers on the three areas of social enterprise, cleantech and philanthropy, we estimate that less than $200 million is going into social enterprise worldwide from dedicated foundations each year, compared with over $2 billion into cleantech in the USA and EU and well over $200 billion into philanthropy in the USA alone.

In terms of buzz, the report contained some rah-rah combined with no shortage of caution. While stating that social entrepreneurship is "on a roll," SustainAbility also sounded this warning: "There is a real risk that many business people will chalk this up as another fluffy, feel-good fad."

The report called for the adoption of what it called "Mindset 3.0," which it said is about:

…is about seeing — ‘reperceiving’ — immense challenges, such as the growing risk of abrupt climate change, as potential opportunities to leverage the power of markets and business to reboot entire economic and political systems. This is exactly what is beginning
to happen in the energy field. In some cases the time-scales involved may be generational, but the transformation is under way."

This can best be seen in environmental action, the report said, particularly in cross-sector partnerships to develop cleaner fuels. Despite its cautionary notes, particularly in the area of funding, the report does come across as optimistic – a mood that clearly captures the ebullience at Oxford last week. Here’s the takeaway:

"We are entering a new era in which today’s apparently insoluble problems spawn tomorrow’s transformative solutions. The new breed of social and environmental entrepreneur is part of a new global order that is dedicated to new levels of equity, quality of life and sustainability. Far from accidentally, there is a buzz around innovation."

The full report can be downloaded here.

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