Social Entrepreneurship

I was very impressed with Nicholas Kirstof's NY Times column today on social entrepreneurs at Davos.  He highlighted some interesting work that is going on around the world, and more critical in my mind, projects that are conceived, led, and run by women for other women.  In fact, social entrepreneurship seems to be an area in which women’s leadership and expertise is not only welcomed, but valued and rewarded. 

Historical examples of social entrepreneurs lean heavily toward women, something that continues today.  After reading the Times article, I did a bit of research on social entrepreneurship.  A large number of the people receiving support for their work from the Schwab Foundation for Social Entrepreneurship are women.  The Skoll Foundation, another organization awarding grants to social entrepreneurs and their enterprises, supported fellows with multiyear grants in 2005 and 2006.  In 2005, slightly over one-third of the fellows were women.  The following year, that number increased to 60%.

Social entrepreneurship is nothing new.  However, it was only after Muhammed Yunus and Grameen Bank won the Nobel Peace Prize in 2006 that serious attention was paid to the idea of microfinance and social entrepreneurship.  On one hand, the opportunity presented by organizations like Grameen to invest in women-owned businesses is exciting.  On the other, I often find the interest rates that these organizations must charge their clients to be outright offensive at 16% and higher.  While they won’t literally break their borrowers’ knee caps if they don’t pay up, siphoning off the nascent business profits to underwrite the loan pools’ higher risks (and solidify the double bottom line) isn’t a perfect solution to the problem, either.

Of course, not all models of social entrepreneurship involve profit as one of the goals.  Profit is not mentioned in the Schwab Foundation’s definition of social entrepreneurship, nor is it breathed about the Skoll Foundation’s.  But how are strategies sustainable without finding ways to fund themselves over time?  To do so requires an internal funding mechanism to perpetuate the work, in addition to fundraising.  Relying on grants alone hardly counts as sustainable.  And therein lies the special balancing act of social investing: how do you make money by doing good?

Social entrepreneurship is an important part of a system of strategies that are needed to help impoverished communities, including women.  As such, it pleases me that women are on equal footing as men when it comes to solving the world’s problems.