Important Funders

by Nathaniel Whittemore

Published October 05, 2008 @ 07:03PM PST

The field of social entrepreneurship arose not only from the grassroots efforts of individual entrepreneurs, but also from capital invested by a growing number of funders. In many ways, these social investors have a far greater ability to shape the field than do the entrepreneurs creating change on the ground. In order to understand trends in social entrepreneurship, it’s necessary to look first at the priorities of these major funders and what makes them tick. The funders mentioned below are important both for their individual efforts but sometimes, even more for what they represent.

Echoing Green

Echoing Green supports a fellowship program for social entrepreneurs leading innovative organizations that are less than two years old. The fellowship provides two years of seed capital as well as pro bono consulting and mentorship and access to a network of more than 450 entrepreneurs. Although the application process is rigorous, the seed capital grant award is based almost entirely on the strength of the idea and the clarity of the plan, rather than history of past success. Note to wide-eyed college dreamers: this means that yes, even you, with your zero experience but great ideas, could get one of these! Many Echoing Green fellows, such as Mark Hanis of the Genocide Intervention Network, spun their organizations out of groups they started as students. While the $27 million in seed capital Echoing Green has provided is impressive, it’s the $1 billion in additional resources their organizations have gone on to raise that demonstrates how invaluable early support can be.

Ashoka

Ashoka: Innovators for the Public is focused on creating a fertile environment for social entrepreneurs to lead innovative change efforts around the world. Since 1980, their fellowship program has provided funding, mentorship and support for grassroots social entrepreneurs throughout the world. Perhaps most importantly, Ashoka works to leverage the unique assets and experiences of its fellows to help their projects achieve scale and impact policyhelps its local fellows share information with one another in a global networking. In the last decade or so, it has also significantly increased its attempts to build up the infrastructure of the sector as a whole, including the recent launch of an “Ashoka Venture Fund”.

Skoll Foundation

Started by eBay’s first president, Jeff Skoll, the Skoll Awards for Social Entrepreneurship provide leading social entrepreneurs -- who tend to be a bit farther along in their development than those applying for fellowships like those offered by Echoing Green -- growth capital in the form of around $300,000 a year for three years. Note: this means that you formerly wide-eyed college kids who somehow pulled off the Echoing Green and are wondering how you can help your organization grow? This one may be for you.

Like Ashoka, Skoll also invests in sector infrastructure. Notably, it supports the Skoll Centre for Social Entrepreneurship at Oxford’s Said Business School and holds the Skoll World Forum, one of the largest annual gatherings of social entrepreneurs. Skoll, along with his eBay co-founder Pierre Omidyar, is representative of the excitement about social enterprise among those who made their fortunes in internet and computer technology.

Bill Gates and the Bill and Melinda Gates Foundation

Bill Gates, founder of Microsoft, is easily one of the most recognizable tech billionaires in the world. Earlier this year, Gates left his formal role at Microsoft to work on his philanthropic endeavors full time. As the foundation -- which is best known for its work in global health -- has grown, Gates himself has become an increasingly vocal proponent of something he titles “creative capitalism,” a form of capitalism which recognizes incentives thattries to ensure that the benefits of wealth creation are extended to the poorest of the poor. While the Gates Foundation doesn’t have specific programs aimed specifically at “social entrepreneurs,” the base-of-the-pyramid strategies where much innovation in social enterprise is happening seem to be an increasing focus of Gates Gates himself is increasingly focused on helping develop social enterprise strategies targeting these “base of the pyramid” consumers. himself. Given the incredible size of the Foundation, this could have a significant impact on the field.

Good Capital and peers

On a post responding to how the Gates Foundation was implementing “creative capitalism,” Kevin Jones, a founding principle of Good Capital, left a comment in which he articulated a vision for investing in value creation that includes social value as an equivalent partner of economic value. While Good Capital is a young firm, just finishing its second investment, its “blended value” sensibility is at the heart of a new generation of firms investing in social enterprises. Unlike pure philanthropic grants, these firms expect some economic return on their investment. Unlike traditional for-profit investors, however, they have an explicit focus on supporting social value creation and often adjust the terms of the loan to factor for trade-offs between economic and social value. For the field of social entrepreneurship to grow, there have to be more investors like Good willing to explore new conceptions of value creation. Social Entrepreneurs rejoice!