Last Thursday you could find me drooling in my seat at the all-day social enterprise conference phenomena known as The Feast . As Stacey Murphy of @bkfarmyards put it: “#Feastongood was pretty unforgettable. Only criticism is too many inspiring people to meet in too little time.” It was hard to meet someone who wasn’t incredibly interesting and taking their ideas of social innovation to the next level (I challenge you to try at The Feast 2010–tickets are already on sale.) I am still somewhat in a daze regarding all of the things that were discussed, opportunities to be seized, and the amazing people who were brought together.
There was, however, a recurring theme that I noticed in many of my conversations: franchising, financing, and technology.
But let me back up a bit…the night before I attended a panel discussion at The Foundation Center on donor management systems. As some of the organizations I am working with are revving up for full-on fund development, implementing an affordable donor management program seems like a good part of the plan. I was a little shocked when I arrived that probably 80% of the attendees were twice my age. I got up and asked a question regarding options for donor management systems that would work for organizations with staff who telecommute and lack a brick-and-mortar base of operations. The question was confused people–both in the audience and in the panel–but I got a helpful answer in the end. However, the answer suited my question by accident–these traditional programs aren’t being designed with 21st century social entrepreneurs in mind, they just may work out unintentionally.
The demographic of The Feast was a stark contrast. It was packed with social-media savvy social entrepreneurs, many of whom were connecting for the first-time in person after months of communicating via Twitter, blogs, or email. For these social innovators, both the presenters and the audience, there were three things that kept coming up: franchising, financing, and technology.
Franchising: Social innovators are continuing to apply business methods to social ventures. Many organizations (like SHEnterprises (who presented at The Feast), The Unreasonable Institute, and The Ayllu Initiative) have incorporated franchising or model duplication as part of their strategy in order to implement successful programs on a large-scale. The organizations plan to make necessary tweaks to variables–like geographic location, population, materials, etc.–and roll out easily replicable programs that will yield high social impact.
Financing: Each start-up social venture must decide early on whether or not it is going to be for-profit or nonprofit. Many incubator programs, like Echoing Green, don’t “discriminate” between nonprofit and for-profit ventures and encourage both structures as a means for social innovation. The decision between nonprofit and for-profit, for many entrepreneurs, may be based on practicality, organizational mission, or structure. For many young social entrepreneurs, a for-profit social venture is an exciting opportunity to prove that socially-minded business can be financially sustainable. However, when it comes down to it–the lack of flexibility between the two legal structures and the type of financing available, has many would-be for-profit social entrepreneurs turning to the 501(c)3. The new L3C (Low-Profit Limited Liability Company) is a new option that addresses this issue, but many feel like it is not fully developed yet.
While turning to nonprofit status may seem like the only viable option for start-ups seeking seed funding, the next step is communicating with foundations and individual donors about social entrepreneurship–a still relatively new field that is experiencing high-growth. Finding, and then competing, for these funds is another challenge.
Technology: Someone at The Feast asked, “Where did all of these people come from?” My thought, “The internet.” Over 1,000 tweets were posted during The Feast (here’s the twitter feed)…and I haven’t even gotten around to checking out all the amazing blog posts about it. So #1) These social innovators are connecting via social media to keep the conversation going, network, and problem solve. #2) These leaders are also utilizing technology to implement their programs. Charity:water (who presented at The Feast), in an effort to increase transparency in the organization, is geo-tagging digital photographs of their projects around the world. (I mean seriously, check this out.) Another organization, Frontline SMS (who also presented), is using text messaging solutions for nonprofits…because, guess what? Most of the people in the world do not have internet access. So technology doesn’t just mean using the best technology available in the world, but using the best technology available for a given situation to solve the world’s problems.
This goes back to my experience at The Foundation Center. We may need to re-design and re-think some of the traditional nonprofit tools, resources, and structures. “Accidental” tools are probably not the best, and assuming that these tools will have multiplier effects across the world (either multiplying efficiency or inefficiency)–it probably makes sense to design these tools with intention. What technologies would help a virtual nonprofit office? What are easily replicable best-practices for start-up social ventures? (These best practices, arguably will be easy to communicate and transfer due to this population’s heavy use of social media.) How can we duplicate not just our programs, but our start-up structures, procedures, methods for transparency and accountability? How can we increase access to financing and encourage faith in social enterprise amongst investors ?
What do I see happening next? Well, The Feast did an amazing job connecting like-minded social innovators and continuing to inspire them to action. Now, the next step is finding out what are the limiting factors for development of start-up social ventures. The innovation is happening faster than the infrastructure supporting it can catch up. The good news: the hard part is over. Entrepreneurship is notoriously difficult to teach–they’ve got the goods, let’s give them the tools to succeed.
Tags: #feastongood, All Day Buffet, NYC, Social entrepreneurship
Fabulous post! And hats of The Feast, which was outstanding!
To your last question… “What are the limiting factors?” There are, of course, many. One critical factor is the lack of real “integration” in the space. All are doing amazing things to solve major social, economic, and environmental issues, but too often doing them in their own silos. They cooperate, as they did at The Feast, but don’t coordinate.
As long as social enterprises are spread about the globe in different communities, serving different needs through disparate means and supply chains, we won’t be able to create the virtuous circles and systems that will allow social ventures to flourish. We need to find ways for social enterprises to feed off each other and create critical mass within communities and regions. If we can do that, we will be successful!
Thanks for the comment, Mike! I agree with your point…redundancy in that aspect–where social ventures are doing the *exact* same thing (same target population, same geography, same mission)–is definitely an issue, and one where critics of the social sector would say that the market naturally regulates that in the for-profit world. Those “inefficiencies” can sometimes be bad PR for the sector. I think that those individuals and organizations who come to the table–via social media, conferences, networking, and just overall connecting and collaborating–will be the ones who come out on top and set a very high benchmark for success.
The onus to change that paradigm of inefficient redundancy perhaps falls to that group of organizations and individuals who will re-think the sector and challenge inefficiency in order to positively impact society. But maybe another question is: Is it an onus or a privilege?
-Lauren
Great post Lauren! I’ve really thinking about the franchising model and it’s pretty brilliant.
“Now, the next step is finding out what are the limiting factors for development of start-up social ventures.”
What if we stopped looking at it as a “social venture” all together? A lot of the same problems we face in the social space are the same problems that ventures face in the for-profit space. They have problems getting funding, collaborating, growing, etc just like social ventures. 9 out of 10 startups fail too. Maybe we should encourage healthy competition and a culture of innovation? Not everyone can play together in the sandbox. I think once we start looking at social ventures as regular ventures, great things can start happening.
Thanks for your thoughts, Michael! (and way to go with The Feast!!)
Aha! I think eliminating the “social venture” label and participating instead in the general business world is a great and strategic plan, with the end goal to redefine business-as-usual. Just because you have a “good cause” doesn’t mean you have a “good business.” And inefficiencies—even when they have good intentions—still create drag. . .something that a competitive market generally corrects for.
There is one thing that I think is particularly individualized for social ventures that traditional for-profit ventures do not necessarily deal with: effectively measuring (and valuing) social impact. How do you compare businesses working on social and environmental issues without a measurable baseline (something impact investors should and do think about)? Definitely fodder for another post!
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