Are social entrepreneurs too obsessed with scale?

by Nathaniel Whittemore

Published November 20, 2008 @ 01:39PM PST

There is a nice post on the Acumen Fund Blog recapping a panel discussion on scaling nonprofits at the recent NetImpact conference. The basic point of most of the panelists, it seems, was that not all that many nonprofits get very big and not many nonprofits achieve economies of scale where they can harness resources and implement programs more efficiently. The key line:

"“We need to talk about how we get foundations to stop giving inefficiently,” said Aaron [Hurst of the Taproot Foundation], who likened the multitude of nonprofits with similar missions to the hundreds of Chinese restaurants across New York City. “All the restaurants serve dumplings, lomein”…to be efficient, “they should all be one Panda Express.”

...His point in well taken.  The philanthropic sector could improve the net social impact by rewarding mergers and partnerships between nonprofits with similar competitive advantages who realize they could achieve economies of scale by working together."

I was just talking about in the context of a presentation on social entrepreneurship at a campusCatalyst class a few nights ago, and have a few thoughts.

1. There are good reasons why scale is hard for nonprofits

Most nonprofits and community organizations understand that local context matters. When you try to transplant a model from one place to another without going through the often time consuming democratic process of listening to and learning from the people you're trying to serve, even the best of programs flop. What's more, people want to be agents in their own change; as Paolo Freire might say, people want to create their destiny's, not just be subject to someone else's vision for them, no matter what that vision is. For many nonprofits, this essential stakeholder engagement is one of the main impediments to scale.

That's the way it should be. The democratic organizing process is essential to civil society, and there are lots of great ways to improve efficiency without sacrificing it.

2. The greatest challenges to partnership tend to come from "upward" pressure, not a lack of "downward" understanding of complexity

By and large, nonprofits understand that problems are complex, and that one organization can't tackle everything. Whether that means understanding that fighting the AIDS pandemic means drug development, prevention education, contraception, treatment, and more, or understanding that community health and poverty are related issues, it forces us to recognize that whatever we're doing, its just one piece of the puzzle.

I believe that many times, even when nonprofits do recognize that they need (and have an opportunity) to partner with related pieces of whatever puzzle they're trying to solve, they feel immense upward pressure to think about where their next grant is coming from. If there are only so many AIDS funders in the room, and each institution has not only their social imperative but their institutional imperative to survive, it means pressure to stake a claim as the organization doing the best work. This is bad for nonprofits and bad for the world, so I completely agree with the above suggestion that foundations need to do more to reward partnership.

3. Do we need traditional institutional scaling at all?

The institutional forms rose in the industrial area around the difficulty of managing large pools of resources. Our foundation and nonprofit institutions mirrored those created to grow our economy. The times have changed, however, and internet technology is dramatically changing our ability to harness resources. This is the theme of Clay Shirky's wonderful "Here Comes Everybody: The Power of Organizing Without Organizations."

When it comes to scale, my question is why couldn't a lot of small nonprofits band together to achieve some of the same effect without losing their individual identities? Just like many small law firms come together to get better deals on office supplies, why couldn't nonprofits with similar inputs (whether its international flights, office space, material equipment, whatever) band together and use their group buying power to lower prices in return for the high volume of orders? Groups like The Point already offer the type of technology you'd need, someone just needs to organize it.

4. The Hull House model

One of the most important and illustrative models of a type of "scale" I think we should focus on is Jane Addams' Hull House. Jane Addams was a Progressive Era reformer who built the Hull House, one of the first settlement houses designed to offer social services to the urban poor.

As she became more and more refined in her approaches and convinced about her organizations model, she focused on scale. For her, however, that meant helping other socially concerned citizens found their own organizations with similar but locally appropriate models. She was far less concerned with franchising and branding the Hull House name, but cared that poor people in every city had access to the same quality of services with dignity that her organization offered. Indeed, when she wasn't building her own organization or helping other social entrepreneurs start theirs, she was writing about the relationship between philanthropy and a healthy democracy.

I believe that's a powerful approach.

If there is one overriding and fundamental difference between social and financial entrepreneurship it's this: our concern should not be solely the scale of our own organizations, but instead to the scale of the world's ability to solve the problem we're trying to solve. Our primary allegiance is not to institutions, but to impact.

I would love to hear responses from any one and everyone, but particularly from those who are immersed in the questions of scale and can offer a more experienced perspective.

Echoing Green deadline approaching

by Nathaniel Whittemore

Published November 20, 2008 @ 12:46PM PST

For all of you almost-there social entrepreneurs out there, the Echoing Green Fellowship is a chance to have the financial freedom to dedicate yourself fully to a big new idea. The Fellowship provides solo entrepreneurs $60,000 over two years, and teams $90,000 for the same period. Their alumni include the founders of the Genocide Intervention Network, Teach for America, and one of our Top Social Entrepreneurs You Haven't Heard of Yet, Andrew Youn of One Acre Fund.

The deadline for the application is December 1, and even for those of you who aren't sure whether you'd really be competitive, the process of having to succinctly answer the set of questions they ask is an extremely useful idea development tool.

To learn more and get some tips about applying, check out this podcast on the Echoing Green Be Bold blog.

Waxman and the green economy

by Nathaniel Whittemore

Published November 20, 2008 @ 12:31PM PST

I've written a few times about green technology and Obama's potential investment in that sphere as a major boon for social entrepreneurs. Change.org's Stop Global Warming blogger Emily Gertz has a nice post today about how Rep. Henry Waxman's ascension to Chair of the House Energy and Commerce Committee might be the "third leg to the stool" of pro-environment policy.

From Politico: "Chairman Waxman has been a leader on global warming for many years, and we look forward to working closely with him in this new role," said The Natural Resources Defense Council's Karen Wayland in a written statement.  "Our nation faces many challenges, including the climate crisis, and Congressman Waxman understands that we can’t delay in taking on these issues."

Read the rest of Emily's post here.

GEW: Russell Simmons and the Race to Be

by Nathaniel Whittemore

Published November 19, 2008 @ 12:39PM PST

The premier event of Global Entrepreneurship Week USA is the Russell Simmons-hosted "Race to Be," a "creative entrepreneurship challenge," aimed at inspiring young film-makers, musicians, and fashion designers to become entrepreneurs.

Since October 2, creative artists age 18-29 have been submitting their portfolios online. Five finalists were selected in each of three categories, BE. The Story (Film), BE. The Sound (Music), BE. The Style (Fashion), and are making presentations in the next few days, as well as getting some serious professional mentorship.

What would something like this look like for social entrepreneurship? Students from anywhere submit videos and plans explaining their projects and ideas; maybe they can use a public competition commons to find resources (a la NetSquared) for their ideas; finalists are selected and they all have access to professional development and mentorship; winners are given the support and networks they need to make their projects happen? Could be cool. Maybe Change.org should host it?

GEW: Ah-nold the Governator launches GEW in America

by Nathaniel Whittemore

Published November 19, 2008 @ 06:55AM PST

Gov. Arnold Schwarzenegger formally launched Global Entrepreneurship Week in the United States yesterday, saying:

I am honored to launch Global Entrepreneurship Week from California, bringing together more than 75 countries in a celebration of the entrepreneurial spirit that is so strong here in our great state. California’s pivotal role in the global economy is made possible by our state’s innovation and ingenuity – and Global Entrepreneurship Week is an important part of recognizing the individuals and businesses who will help lead our economy into the future.

Interestingly, the short speaker list was packed the internet-based business leaders (Google and Facebook, for example). It's probably not a huge suprise, considering Silicon Valley's continued leadership in web innovation, but its worth noting that these are the leading voices on a host of regulatory issues. You can view the webcast here.

Simultaneously, Ah-nold was launching the Governer's Global Climate Summit, an attempt to create a framework for United Nations' negotiators to use when they begin workin on a new climate change agreement in Poland this winter. President-elect Barack Obama wasn't there, but sent this message, making clear that even with the ecnomic crisis, we couldn't afford to let climate change fall off the top of our agenda ($15 billion in private investment for green technology included...)

GEW: Social Finance Forum

by Nathaniel Whittemore

Published November 18, 2008 @ 01:49PM PST

Yesterday I wrote about the MaRS Social Entrepreneurship Summit. Today they're holding the related Social Finance Forum, which takes a closer look at the new funding ecosystem growing up around social enterprises that blend social and economic value.

The content looks really interesting, particularly if you were interested in the Social Capital Markets conference coverage from last month. I'm particularly interested in the "The Rise of the Social Finance Asset Class" conversation which looks at the emergence of a distinct type of financial asset, with its own unique risk/reward calculus.

To learn more, follow their official twitter account: @sff2008

The event is held in conjunction with Entrepreneurship Week Canada 2008 - Canada's official connector to the Global Entrepreneurship Week. Check out their official video below:

GEW: France aiming for 1 million participants for Global Entrepreneurship Week

by Nathaniel Whittemore

Published November 18, 2008 @ 01:36PM PST

According to the Global Entrepreneurship Week website, France is aiming to have 1 million people attend the more than 1,000 events taking place across the country.

Coinciding with the week, the French government has annouced a new department and program called "Self-Entrepreneur" which will support any citizen of France who attempts to supplement their income by building a business, consultancy or other enterprise coinciding with their work. From what I can tell (which is limited by a Google website translation) the program is aimed at folks like students who aren't full-time self-employed but who do commercial and service activities on the side that could benefit from a level of government recognition and support.

Read more here. Any French speakers who could check out the site and better explain it in the comments section? Seems really interesting as an example of government support for entrepreneurship.