Scaling Social Enterprises
Tuesday, May 1, 2012
At the Center for Science, Technology, and Society, we focus on helping social entrepreneurs build ventures that scale. My colleague and mentor Jim Koch, founder of the Center and one of the founders of both our signature Global Social Benefit Incubator (GSBI) and The Tech Awards, returned from the Unite for Sight’s Global Health and Innovation Conference effusive about his airplane reading. Jim’s praise was for the Monitor Group’s recently released report, From Blueprint to Scale: The Case for Philanthropy in Impact Investing.
The report is timely for a number of reasons. Impact investing was a hot topic at the Davos of social entrepreneurship universe, the Skoll World Forum; however, as noted by some of the pioneers in the space, the use of “impact investing” to describe a variety of things doesn’t help clarify the sources of capital so crucial to scaling social enterprises. The form of social enterprise itself is evolving as entrepreneurs experiment with hybrid business models and other shared value structures. Brian Trelstad at Acumen Fund remarked that conventions are not well established for how big the non-profit should be relative to the for-profit or how much of a subsidy it should make in models with essentially two businesses. What is clear is the need for patient capital and perhaps different investment vehicles, as John Kohler articulated in his Coordinating Impact Capital report. Currently, John’s favorite idea is a demand dividend instrument; he is itching to find out how it works in practice. The “catalytic role” played by philanthropic support, coherently conveyed in Blueprint to Scale, is clearly also critical.