Fuel for the Field

Sticking with my vow to relentlessly focus on ‘what works’ in this blog*, today’s post is about building what Haas Business School professor Jane Wei Skillern calls the ‘networked nonprofit’ and Monitor Group calls ‘working wikily’.

It’s high time that we build a tighter network among innovators who identify with ‘entrepreneurship’ and those more identified with ‘social enterprise’ – and often with affordable housing and community development, too. From my perspective, the ‘entrepreneurs’ focus more on scaling up creative programs – schools, civic engagement, etc. – but rely on pretty traditional financing like government grants and philanthropic donations; whereas the ‘enterprisers’ (is there such a word?) specialize in honing the new tools of social investing.

Entrepreneurs create charter schools, and massive and powerful citizen engagement programs. The edge they tend to push on financing is either advocacy for reallocation of public funds to different uses (for example more results-driven or flexible), or methods that cost less by relying on volunteers or consumers themselves.

Enterprisers on the other hand really concern themselves with financing innovation. These are the community developers who helped to invent the low income housing tax credit which has channeled billions of dollars into the creation of affordable housing, and the concepts of Community Development Financing Institutions (CDFI’s). These are the inventors who created an alphabet soup of lending and investment tools from PRI’s to MRI’s, from RG’s (recoverable grants) to PC (patient capital investments blending social, environmental and financial returns). Social enterprise – the classic idea of nonprofits or for-profits that earn income by delivering socially valuable goods or services – is a programmatic element of this stream.

How do we deliver a ‘social return on investment’ and scale up to do what’s needed in the context of a crowded and competitive marketplace with enormous pressure on government and foundation budgets? Enterprisers should learn from entrepreneurs who are experimenting with scaling effective services and supports; entrepreneurs should learn from the enterprisers who are pioneering more sustainable and scalable ways to finance social endeavors. Nancy Andrews and Christopher Kramer of the Low Income Investment Fund explore some of these ideas in an intriguing article, “Coming Out as a Human Capitalist.”; Jeffrey Hollender, CEO of Seventh Generation, speaks to the for-profit side of this equation in his new book, The Responsibility Revolution.

Let’s have more intentional cross-cutting dialogue about how to best deliver the goods, and pay for them and put innovation into all sides of the equation. What do you think?

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