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Social Entrepreneurs Take Flight

Twenty or so years ago, while social enterprise was germinating in the not-for-profit sector, “unencumbered” social entrepreneurs began to turn an innovative eye to meet pervasive environmental, economic and social problems facing the planet.  Exercising their freedom to design, develop and deliver an independent and unconstrained business model, many set out to create ventures with passion and purpose.

Who was this new breed of entrepreneurs, what challenges did they face and what were they determined to accomplish?

Some appeared to have the light of possibility switched on as a result of organizational adaptation reflecting corporate social responsibility principles and practices that were becoming widely adopted. Others rooted in the not-for-profit mindset, jumpstarted their vision with grants, unclear how to eventually break the model of dependence. Many set out to create a purposed-centric business that put people and planet on equal ground as profit. And as more social entrepreneurs emerged as successful business owners, new questions and considerations emerged.

Who were these folks and how would they carve a successful path where not-for-profit and traditional corporate structures had failed?

Those with investment capital began to take a closer look. Did an expanding myriad of social entrepreneurs and their innovations represent solid investment opportunities? If so, how would the implied (or in some cases) explicit expectations of limited profit and organizational design mandates influence deal flow? Were there other hidden inhibitors carried over from the initial social enterprise efforts that could threaten return on investment?

The answer appeared to be all of the above. And as is often the case in emerging markets, ambiguity is not necessarily an ally.

In evolution, timing is everything
Despite a number of challenges, including access to capital; an unwavering commitment to vision and mission propelled social entrepreneurs forward. Leadership organizations like Ashoka and Echoing Green helped bolster efforts by seeding micro-capital and providing mentorship. And although the power of a sea change was still off shore, collective stories of positive impact shifted a marginalized activity to center stage.

But as more players entered the space, embracing the competitive advantage and leveraging a powerful vehicle for generating positive social change, an unbridled flood of activity further demonstrated the need for a clearer definition and operating model.

The capital necessary to fuel growth and assure long-term social impact is, in part, lagging due to social entrepreneurs plowing ahead, sans the type of definition and precision required by the financial community. While Social Impact Investing has evolved from a concept in the minds of pioneers like Kevin Jones, to an emerging and promising model, in many ways the Social Capital Market movement tempers its engagement in anticipation of a more defined entity to invest in and measure return on. That’s good news – if the movement can step up its game and play by a more broadly accepted playbook.

In the final article of this series, we’ll take a closer look at how the definition of the social enterprise model must be informed by the past, inspired by the present, but ultimately reached by an inclusive integrative collaborative platform that brings diverse, and even disparate, interests to the table.

Heather Burns and Doug Hammond are founding partners of Burns & Hammond, an integrative sustainability consultancy with roots in the social enterprise, corporate social responsibility and local living economies movements. The firm focuses on sustainability strategies, systems and reporting… [Read more about Heather Burns and Doug Hammond]

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