Social Entreprenuership as Flavor in Favor for Now?
One potential window into a better understanding of innovative concepts and business models in the social sector comes from a thumb-nail analysis of the 2006 Fast Company/Monitor Group Social Capitalist Award recipients announced in the December 2006/January 2007 issue of Fast Company.
The sponsors’ target is leaders “who combine savvy business models with solutions to pressing social needs in ways that challenge our assumptions about making a profit and making a difference.” (Let’s put aside for the moment the issue of sample bias -- one third of the applicants received awards -- and agree there is still something that can be learned here.) Their methodology values a combination of social impact, growth trends and plans, entrepreneurship, innovation in concept and business model, and economic sustainability over time. Their selection committee is blue chip: Beth Anderson, Center for Advancement of Social Entrepreneurship, Duke University; David Gergen, Center for Public Leadership, Harvard University; Thomas McLaughlin, consultant, Grant Thornton LLP; and Billy Shore, founder and executive director, Share Our Strength.
What can we learn? For one thing, contrary to popular wisdom, social entrepreneurship is not a primarily international phenomenon: 77% of the recipients provide their services in the U.S.; and 90% of those have been able to scale their services beyond a single city, demonstrating an ability to replicate their concepts and models.
Confirming what we’ve seen around the country, education is hot: 30% of the recipients work on education in three key areas: early childhood reading, early child education; after-school mentoring and training; charter schools and teacher training. Next comes microfinance and other lending services (16%). (As an aside, last week one of the nation’s premier former philanthropy infrastructure program officers told me to expect a shakeout because microlending is overfunded.)
What is not here? Innovations many of the 1.4 million nonprofits use to meet needs of the nation’s poorest children, families and immigrants, because there is no business model in this work providing “earned income” to make these efforts sustainable. This is why many of the nation’s top foundations, which have supported this work for decades, think the focus on social entrepreneurship funding is less innovation and more "flavor of the month" that will run its course in the not-too-distant future.