October 29, 2005

Wikipedia on Social Entrepreneurship

Wikipedia has a new entry on "social entrepreneurship." I hope my writing is boring enough for an encyclopedia. You can go here to see the article. But because Wikipedia is open sourced and is always changing, I've copied the original text below:

"Social entrepreneurship" is the act of a social entrepreneur. A social entrepreneur is someone who recognizes a social problem and uses traditional entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas business entrepreneurs typically measure performance in profit and return, social entrepreneurs often start nonprofits and citizen groups.

The phrase, "social entrepreneurship," has only come into vogue over the past 10 to 15 years, but examples of social entrepreneurship permeate history. People such as Vinoba Bhave (founder of India's Land Gift Movement), Florence Nightingale (founder of the first nursing school and developer of modern nursing practices), and Margaret Sanger (founder of Planned Parenthood Federation of America) are all recognized social entrepreneurs.

Today, organizations such as Ashoka and the Manhattan Institute promote, fund, and advise social entrepreneurs around the planet. In fact, since its founding in 1982, Ashoka has elected more than 1,500 entrepreneurs from more than 50 countries into its Fellowship. U.S. News named Bill Drayton, the founder and operator of Ashoka, one of America's top 25 leaders in 2005.

Posted by at 9:05 PM

Review of Chapter Eight: The Role of the Social Entrepreneur

“When you’re working through a change, you’ve got to lay out all the steps in the process across the top and all the key actors down the sides. And when you’re designing it, you have to think about each step for each of the actors. And if you’ve got an actor who is not going to like what’s happening in that step, you’ve got a big problem.”

So says Bill Drayton in a piece of sagacious advice for social entrepreneurs. Know the past, present, and future stakeholders in your firm, and plan to meet their interests. Sometimes you must adjust your actions now to accommodate for future events. By planning ahead and considering everyone who will be powerful enough to affect the course of your business, you can avoid stopping points in your firm’s development.

“An idea is like a play. It needs a good producer and a good promoter even if it is a masterpiece. Otherwise the play may never open; or it may open but, for lack of an audience, close after a week.”

David Bornstein suggests that no matter the quality of an idea for traditional or social entrepreneurs, champions are needed to bring the idea into fruition. Business and social ideas must be marketed, branded, and given legitimacy. They need someone to move them from the few to the many. And often, the best way to do this is to let one charismatic, bright person take the thought and develop it from infancy to maturity.

“The difference in the treatment of business and social entrepreneurs seems to reflect different attitudes about the role of individuals in the business and social arenas.”

Businessmen, Bornstein goes on to say, are viewed by society and view themselves as “engines of change.” They are the innovative, pragmatic, hard-working people who devise new products or ways of doing things and take them to their conclusion. In contrast, social entrepreneurs – people like Susan B. Anthony or William Lloyd Garrison – are credited as socially-conscious, ahead-of-their-time champions of basic moral rights. Social entrepreneurs are seen collectively as saint-like and idealistic, but without the practical orientation of profit-driven, traditional entrepreneurs.

In fact, of course, the distinction is artificial. Arguably, many of the social entrepreneurs of today (e.g., Jeroo Billimoria) and yesterday (e.g., Florence Nightingale) should be credited with more good sense and pragmatism than the more stock entrepreneur. After all, social entrepreneurs aim to change societies that many people do not want to see changed. Whereas financial markets can gradually guide a traditional business into maturity, social entrepreneurs often take on radical change rapidly. And if they don’t get things right – as in the case of Billimoria’s work with impoverished children – it can mean life or death for stakeholders.


Posted by at 8:01 PM

Review of Chapter Seven: Ten-Nine-Eight-Childline!

The early career of Jeroo Billimoria, the founder and long-time operator of the Indian child services hotline, Childline, highlights a fundamental difference between social and traditional entrepreneurship. Certainly there are obvious disparities: Each has distinct goals, measures of success, and emphases on ‘means’ to the ends. But the fundamental, however more subtle difference, lies in the necessity of outside help and reputation. Like so many other leaders of citizen groups, Jeroo discovered that as much as social entrepreneurs think they can take on the world alone, they do in fact need help. And when you’re trying to lift thousands of destitute children out of extreme poverty in a country rife with corruption and abuse – as in Jeroo’s case – lots of help.

Of course, entrepreneurs of every stripe need financial, human, and operation assistance in starting and running their ventures. An entrepreneur’s relationships with banks, suppliers, customers, and other stakeholders often determine, or, minimally, direct the profitability and overall success of a firm. But with a social entrepreneur, someone who can’t offer big payoffs to creditors or promise vast success to investors, this is doubly true. As Jeroo said of her organization, “Childline cannot work in isolation. We used to think we were great people – that we could do everything alone. Now we know better.”

By the time the firm matured into a multi-city operation, Childline had learned that relationships – trust, specifically – among all the firm’s stakeholders were the key to success. Childline sets up Childline Advisory Boards in every city to ensure the firm has access to and the support of influential police, health, and railway officials for its operations. The firm worked strenuously for some time to develop a healthy relationship with the Indian Ministry of Social Justice and Department of Telecommunications. Similar-minded organizations in India are now in constant contact with Childline to share vital information and coordinate their efforts. Childline even benefited from a successful media campaign that brought new vigor and financial backing to the firm.

As with any traditional firm, the greatest stakeholder for Childline is the customer – the children. “Every call is important,” Jeroo repeatedly told Childline workers. Often, poor Indian kids looking for help will “test the waters” at an organization before committing to it. So even when children call simply to badger attendants, Jeroo mandated that employees stay civil and calm to give callers a sense of unconditioned philanthropy.

The point is any firm needs to map, assemble, and manage the various stakeholders in its business. The ability to leverage power and maintain relationships are two of the leading skills for any entrepreneur. The sooner the entrepreneur recognizes the need for these skills, the sooner he can become truly effective.

Posted by at 12:33 AM

October 22, 2005

Review of Chapters Five and Six

What kind of people become social entrepreneurs? What are they like? Do they share the same kind of parents? Do they have a unifying early life experience? What kind of activities do they participate in as children? How do they view themselves – as risk-takers, motivators, leaders, achievers?

In short, what makes a social entrepreneur start ticking, and what keeps him ticking?

David Bornstein finds a case study in Bill Drayton, the founder of the large nonprofit Ashoka. Drayton was born to two accomplished parents in New York City in 1943, his father having done ambitious archaeological work in Western Canada, his mother a gifted cellist. “Both my parents gave themselves permission to pursue their dreams in life, to do something really excellent that was theirs,” Drayton recalls. “They looked very conservative and establishment, but they were quite willing to do radical things.”

And so it began.

Drayton was an entrepreneur from the beginning – he launched, organized, advertised and distributed a 30-plus page monthly magazine before he was out of elementary school. Throughout his early years, Drayton took the initiative to organize boycotts of firms accused of racial discrimination and take on his school authorities even in the face of disciplinary action. He showed himself to be independent, ethically unflappable, and, in a prelude to his later years, socially responsible often and shockingly early.

A child of the civil rights movement, Drayton took particular interest in nonviolent protest – especially the methods advocated by Indian independence leader Mahatma Gandhi. Whereas most endorse Gandhi with hardly more than admiration for his spirituality, resolve, and basic ethic, Drayton was taken by his pragmatism – that is, his “how-to” attitude. Certainly, few see Gandhi as a shrewd political calculator or devious marketer; we all tend to think he just started doing things and everyone else followed. But, as is also the case with Martin Luther King, Jr., Vinoba Bhave, and the ancient Indian ruler Ashoka, Gandhi was also a practical-minded, detail-oriented leader every bit as much (and probably more so, actually) as today’s top corporate executives.

Later in his youth, between his studies at Harvard, Yale, and Oxford, Drayton immersed himself in the day’s Indian social movements and environmental work. Volunteering weeks of his time to do construction work in India, Drayton carried himself as a humble learner below the celebrated Indian leader, Vinoba Bhave. Even later along the line, as the Environmental Protection Agency’s assistant administrator, Drayton recognized some of the unpopular new compromises that had to be made between industry and environmental groups to create the “greatest sustainable good.”

And then he went on to Ashoka. Drayton recalls that the first few years of operation were, at best, financially unstable. Neither nonprofit foundations nor leftist groups were very drawn to making “social investments” in “social entrepreneurs.” Indeed, his earliest funding came only from personal friends and old acquaintances, one of whom frankly told him, “I don’t believe in India. I believe in you.”

Drayton says, “For the first five years of Ashoka, I could not get one public foundation in the United States to support us with one cent. None. It was not that this is a bad idea or because I was inarticulate. It was not because I was not well known. I had just come out of being assistant administrator at EPA and had good reputation from that. Not one of them would risk any money on this idea. How could they miss it?”

It was because of personal reputation and an impressive resume that Drayton got his first few dollars for Ashoka. It was because of persistence and faith in his mission that he got the rest.

From his earliest years, Drayton proved to have a go-getting entrepreneurial spirit and a social ethic to boot. He held the two-fold practical, short-term realism and long-term vision entrepreneurs need to keep firms’ in tact financially while simultaneously driving toward an ultimate, grander vision. Confident and confrontational in 1950s NAACP marches and 1980s environmental debates, Drayton always sought to find compromising, creative, and bold solutions to nagging social problems. And, notwithstanding his zealous penny-pinching as Ashoka’s founder, Drayton certainly has nothing if not a high tolerance for risky adventures around the globe.

But our questions still remain: Where did those fundamentally entrepreneurial qualities come from for Bill Drayton? Perhaps from his parents, early school teachers, or from his later studies in higher academia? Maybe Drayton’s emotional childhood in the civil rights movement instilled an inextinguishable fire for justice and social responsibility. Or was it pure admiration for early role models like Gandhi and Vinoba Bhave that drove Drayton to become the front man for social change he is today?

Drayton is certainly a product of all his experiences. But whatever the answer, any plausible explanation needs to meet the sheer complexity of the entrepreneurial spirit.

Posted by at 11:32 AM

October 15, 2005

Randoms from the World of Social Entrepreneurship

Did you know:

The phrase "social entrepreneurship" gets approximately half as many hits on Yahoo! as does "Courtney Love."

The Skoll Foundation (detailed below) gave the Institute for OneWorld Health led by Victoria Hale (detailed below) a $615,000 grant recently.

That Wikipedia does not have an entry for "social entrepreneurship." (I think I may have to change that.)

That Ashoka spends more than seven million dollars annually to finance its fellows.

That the Silverton Foundation gave its 2005 Social Entrepreneur of the year award to this man.

Posted by at 6:55 PM

October 12, 2005

Review of Chapter Four: The Fixed Determination of an Indomitable Will

Florence Nightingale may well have been one of the founders of modern social entrepreneurship, and she never knew it.

The famous English nurse’s story is a tale of eminent philanthropy, unflappable determination, and fixed humility. A woman who would be considered independent and brilliant today, she was a sore thumb in Victorian England. Eventually founding the Nightingale Training School for Nurses, writing “an estimated 12,000 letters and 200 books, reports, and monographs,” and turning nursing from a “domestic” chore into a respectable medical profession, Nightingale was destined to change the world. As biographer Lytton Strachey writes in Eminent Victorians, though as children Florence Nightingale’s sister displayed “a healthy pleasure in tearing her dolls to pieces,” Florence possessed “an almost morbid one in sewing them up again.”

The common perception of Nightingale is that of a kindly, soft-spoken nurse hustling between beds to administer what few medical supplies she had to dying English soldiers. Her legacy is imbued with “the romantic sentimental heroism with which mankind loves to invest its chosen darlings,” Strachey writes.

But Nightingale was infinitely more. She was a hard-nosed political force: When the army purveyor refused her when she demanded he resolve incessant supply shortages in Crimea, Nightingale took over his job. She was humble even as a national icon: When Nightingale returned to England a heroine following her achievements in Crimea, “she declined all public receptions and accepted only those invitations – such as an interview with Queen Victoria – that could advance her work,” Bornstein writes. Most importantly, she was an independent, pragmatic problem solver. She resolved problems in the War Office, developed new medical procedures over her peers’ objections, and, ultimately, brought considerable peace of mind to a nation in the grips of war.

Of course, the danger in dwelling on the good-nature of social entrepreneurs like Nightingale is that it obscures what makes them truly successful. Entrepreneurs need to be visionaries as well as problem-solvers, idealists as well as pragmatists (see the chapter six library essay on strategic leadership in Strategic Entrepreneurial Growth). What distinguishes the kindly aid worker from people like Nightingale is a mix of stubborn perseverance, acute idealism, and proactive realism.

To put it minimally, Nightingale was a noble Victorian. Probably more accurately, she exemplified the qualities we need to change the world.

Posted by at 10:52 PM

Review of Chapter Three: The Light in My Head Went On

In their textbook, Strategic Entrepreneurial Growth, authors Donald Kuratko and Harold Welsch argue that innovative opportunities for entrepreneurs arise from several sources, including unexpected events, changes in industry or market structure, and among others, an incongruity between reality and what is possible. "Ingenious entrepreneurs," Kuratko and Welsch write about the gap between what is possible and what is actual, "can devise inventive or innovative solutions to reach the desired/normative state" (127). Some "frustrating" situations that can spawn possible business ideas, the writers suggest, include being stuck in traffic jams, picking up the phone at night to listen to irritating business solicitations, or having to mow the lawn.

Or, if you're Fabio Rosa, you could be faced with the challenge of providing millions of impoverished rural Brazilians with electricity. That's a way to get a business opportunity too.

As David Bornstein shows in "How to Change the World," Rosa has become somewhat of a hero to hundreds of thousands of Brazilians. Beginning his career outside the small southern Brazilian city Palmares, Rosa has been developing innovative solutions to the chronic electricity problems in rural Brazil. His efforts disrupted, stymied and dismantled after their fruition by the government, Rosa has remained resilient through the best and the worst. He knows that whether he has to set up non-profits or for-profits, distribute solar electric panels or dig wells, Brazilian farmers’ hopes and livelihoods are dependent on keeping the lights on.

Rosa’s determination should be an inspiration to every social entrepreneur. When privatization of Brazil’s electric utilities in the late 1990s eliminated the money and interest for rural electrification, the last 17 years of Rosa’s life were suddenly for naught. “Every time I think about it, I get angry, I feel like shouting at the top of my lungs,” Rosa told Bornstein. “But I try to transform the feeling into a positive force: into solutions.”

Persistence, almost any entrepreneur will tell you, is what sets apart the failures from the successes. But it’s not until students hear stories like Rosa’s that they can begin to understand what sacrifice, perseverance, and resilience truly mean. And for social entrepreneurs it’s doubly true – whereas the stakes in U.S. small business ventures are measured in dollar signs and status, for Fabio Rosa, success was measured in environmental sustainability and extra dollars that could go toward modern healthcare. For others, like citizen groups working against malaria and AIDS in Africa, the measures are only in dead body counts.

But true social entrepreneurs are the ones who can never be discouraged, even in the face of persistent disease, rural poverty, or ghastly starvation. Those are the ones, like Fabio Rosa, whom even history herself will remember.

Posted by at 8:04 PM

October 6, 2005

Review of Chapter Two: From Little Acorns Do Great Trees Grow

When Bill Drayton established his nonprofit organization, Ashoka: Innovators for the Public, in 1978, it’s unlikely that he realized the impact he would come to have on social entrepreneurship. At the time, Drayton dreamed of creating a firm that would provide the best and brightest young social entrepreneurs with the money, expertise and credibility that would help them implant themselves in needy countries and inspire change. Today, Ashoka provides more than a thousand people from around the world with more than $40 million in funding, along with the professional services they often require.

Despite its overwhelming successes, Ashoka took more than a few big hearts to first get started. Drayton began his venture by first looking for the right people – that is, for the right human resources. Drawing on contacts from his college education and former colleagues he had worked with at the EPA, Drayton quickly got the diversity, expertise, human capital, and experience he needed for his venture. Funding for the firm came fairly easily, with donations from Drayton himself and some personal contacts with private charities.

Soon thereafter, Ashoka began its search for worthy young social entrepreneurs. One of the first Drayton and his team encountered was Gloria de Souza, a bright, middle-aged school teacher from Bombay with a new vision for Indian education. Her dream was to dismantle the “leftovers” from British colonial rule and create a new system that encourages creative and practical thinking. With Ashoka’s help, she was able to first transform her classroom, then her colleagues’ classrooms, soon the entire school’s policies, and in less than two decades, the entire national school system’s policies. By almost every measure, Indian education has drastically improved because of her.

As Gloria de Souza and Drayton’s international searches for talent testify, oftentimes the best social entrepreneurs are those most familiar with and motivated by the culture and lifestyles they seek to change. Bornstein is unequivocal about this point, as he is about the political and economic limitations that can inhibit social entrepreneurship. But by combining the right people, assembling the needed finances, scouring the right countries, and getting off to a very successful start, Ashoka was able to overcome its initial challenges to step forward into a very bright future.

Posted by at 7:15 PM

October 5, 2005

Review of Chapter One: Restless People

If you’re searching for the defining qualities of social entrepreneurs, look no further than the first chapter of David Bornstein’s book, How to Change the World: They are “transformative forces: people with new ideas to address major problems who are relentless in pursuit of their visions, people who simply will not take ‘no’ for an answer, who will not give up until they have spread their ideas as far as they possibly can.”

And judging from the recent record, social entrepreneurs are spreading their message everywhere – and quickly, what’s more. Over a ten year period from 1989 to 1998, the number of American registered public service groups grew by an astonishing 60 percent. Today, some 2 million nonprofit/NGO/citizen groups are thought to exist today in the United States, and another 200,000 operate on Canadian soil.

But it’s not just in North America. Everywhere from Slovakia, to Bangladesh, to Central Europe, citizen organizations aiming to expedite social change are growing in size and in numbers. Even international citizens groups are expanding: By the end of the 1990s, the number of international citizen organizations had ballooned to 26,000 from 6,000 at the start of the decade.

So what’s happening here? Why is social entrepreneurship so hot suddenly? Well, if Bornstein’s chapter title is any indication, it’s because we have a lot of impatient people looking for change.

As Bornstein explains at length, a variety of forces are coming together to encourage the growth of social entrepreneurship. Poverty, disease, corruption, and environmental destruction continue to grip much of the third-world. The Internet and other communication systems are linking people from every corner of the globe, showing comfortable Americans the sad truths of Central Asia. People in the West are working less and living longer, giving them more free time to explore volunteering opportunities. The dismantling of Soviet and Chinese communism has also played a role.

Somewhat more importantly, many people in the third-world finally have access to basic resources that allow them to become their own saviors. New transportation and communication technologies let them spread their message. Micro-loan programs give them the resources to start their own organizations. Mostly, they have grown frustrated with the inaction of the West on the gamut of problems that are holding down Central and South American, African, Eastern European, and Central Asian nations.

In short, social entrepreneurs around the world have decided that it is time to help themselves. And that, in a sentence, sums up the great entrepreneurial spirit.

Posted by at 11:15 PM

Big Thoughts, Indeed

Victoria Hale, the founder of the Insitute for OneWorld Health, knows what it means to bring hope to the third-world. Writing an editorial into the New York Times on August 19, 2005, Hale explains how social entrepreneurs, frustrated by the inaction of wealthy governments to bring aid to undeveloped nations, can bring Western medicine to alleviate disease themselves.

The crux of the problem with getting effective drugs to impoverished nations is affordability. Most pharmaceuticals resist selling cheap, generic versions of their drugs, arguing that doing so would limit their ability to develop new drugs. And the argument does not go without merit: If a company cannot make a good return on its drugs, it won’t attract serious investors and it won’t have the cash to invest in new research. Specifically, Hale argues, pharmaceuticals have mostly abandoned research on diseases that are restricted to warm, tropical regions – that is, the third-world.

Some nations have pursued more aggressive policies to solve this problem than others. Despite the objections of many Western governments, Brazil recently decided to begin producing a generic version of a much needed AIDS antiretroviral drug. Other countries are likely to follow.

But Hale espouses a more compromising approach. Hale’s group has championed bringing the drug, Paromomycin, to needy patients in the third-world. Paromomycin, a drug developed more than 50 years ago that effectively treats black fever (which kills some 200,000 people annually), has been sitting on the shelves of pharmaceuticals untested and unused for decades. It was originally abandoned because it wasn’t predicted to be profitable, but now Hale and other non-profits are bringing it back.

Having been dumped years ago, the patent on the drug has since expired. With funding from the Insitute for OneWorld Health and other socially-minded groups, Hale and other social entrepreneurs are now walking the drug through its final testing and development stages. Within a few years, the drug should be available at low prices in both Southern Asia and Africa.

So what is it that allows Hale and other social entrepreneurs to do their work? Talented volunteers, says Hale. “It’s difficult to take time away from a demanding job as a scientist or financial planner or doctor to do the volunteer work that makes these new approaches possible.” But, Hale asks, “What if it weren’t? Just as law firms set aside resources for pro bono work, there should be a systematic way for people from the world’s most successful companies to contribute their time and expertise to advance global health. Imagine a kind of Peace Corps for pharmaceutical professionals.”

These are big thoughts, indeed. But thanks to the innovative thinking of bright, socially-minded entrepreneurs like Hale, they are quickly becoming reality. Even if most Americans and Europeans don’t appreciate her efforts, at least Hale knows billions of people in the third-world do.

Posted by at 8:19 PM