Reclaiming Agriculture for Farmers
Notes from Panel on Social Entrepreneurship at Stanford's Center for Social Innovation, 22 February
Participants
- Jane Leu (JL), founder and executive director, Upwardly Global
- Chuck Slaughter(CS), founder and president, LivingGoods
- Morgan Simon (MS), cofounder and executive director, Responsible Endowments Coalition
- Moderator: Regina Starr Ridley, publishing director, Stanford Social Innovation Review
Definition (by Greg Dees): Social Entrepreneurs play the role of change agents in the social sector by:
-adopting a mission to create an sustain social value (not just private value)
-recognising and relentlessly pursuing new opportunities to serve that mission;
-acting boldly to without being limited by resources currenlty in hand;
-exhibiting heightened accountability to the constituencies served and for the outcomes created;
-engaging in a process of continuous innovation, adaptation and learning;
The discussion covered the themes of funding, blending of sectors, nonprofits in a recession and scale.
Funding
MS said that they had an average funding of USD 5000 for the first three years (now they have USD 400,000 a year). More than money, the key focus in those years was 'partnerships'. They have still 15 odd companies from the founding funding era that still feel very invested in the concept. Funding from Foundations takes more time. LOIs which do not fit into the program boxes have little chance of making it. Ford Foundation throws away 99% of LOIs it receives.
CS started with seed money of his own. He is a former businessman and still get 90% of his funding from former businessmen. Foundations are a slower and longer slog. The trick is to relate the method of finding funds to your work. Recommended reading the piece http://www.ssireview.org/articles/entry/how_nonprofits_get_really_big/
JL asked social entrepreneurs not to wait for money but get to work. She used funds from friends and family for the first two years. Now 30% of her income comes from business service fees from corporate partners. She also recommended going to the new 'venture philanthropists'. Programmatic funding from Foundations is poison. CS added that a 'business model' pays for itself. One of the very few nonprofit ideas to hit global scale in the last decade has been microfinance and it pays for itself.
The blurring of lines between government, corporate and nonprofit sectorsMS said that in today's world solutions will come from different sectors. SEs have to position themselves accordingly. At the same time they have to avoid conflict of interest in order to preserve their long term credibility. At the end of the day all money is 'dirty' to some extent. However, you have to ask yourself who won't you take money from. AL said that SEs should not discount their own power. She gave an example of how she turned down an agreement with the New York state. They got back to her and begged her to sign it on her terms. The key to success in this world of blending of sectors is the ability to wear many hats - being comfortable in a board room setting as well as a church basement. CS said that Obama-like you have to acknowledge today that the key issue is effectiveness. It does'nt matter who does it.
Nonprofits in tough times
JL said that she was happy that many nonprofits would go under. A Darwinian process which weeds out the ineffective, weeds out those who work the same issue in the same geographical area many times over, is necessary. CS said that he has also been advocating an M&A for nonprofits - Marriage and Adoption. A downturn would be good for those with their own revenues. It would also be a necessity because Foundation money is shrinking. JL advised recent graduates not to start with SE but develop something on the side for a couple of years by using their afterwork time.
Scale
CS said that advocacy or 'imitation through advocacy' is essential for scaling the impact of any social business. He again cited the microfinance example (he works with BRAC). He mentioned franchising as a very helpful way to reduce risk and increase scale. 30% of all retailing in the US happens through franchising for the same reasons. He recommended reading http://www.ssireview.org/images/articles/2007FA_feature_mcleod_gran... by the authors of 'Forces for Good' a pathbreaking book on nonprofits.
- Jane Leu (JL), founder and executive director, Upwardly Global
- Chuck Slaughter(CS), founder and president, LivingGoods
- Morgan Simon (MS), cofounder and executive director, Responsible Endowments Coalition
- Moderator: Regina Starr Ridley, publishing director, Stanford Social Innovation Review
Definition (by Greg Dees): Social Entrepreneurs play the role of change agents in the social sector by:
-adopting a mission to create an sustain social value (not just private value)
-recognising and relentlessly pursuing new opportunities to serve that mission;
-acting boldly to without being limited by resources currenlty in hand;
-exhibiting heightened accountability to the constituencies served and for the outcomes created;
-engaging in a process of continuous innovation, adaptation and learning;
The discussion covered the themes of funding, blending of sectors, nonprofits in a recession and scale.
Funding
MS said that they had an average funding of USD 5000 for the first three years (now they have USD 400,000 a year). More than money, the key focus in those years was 'partnerships'. They have still 15 odd companies from the founding funding era that still feel very invested in the concept. Funding from Foundations takes more time. LOIs which do not fit into the program boxes have little chance of making it. Ford Foundation throws away 99% of LOIs it receives.
CS started with seed money of his own. He is a former businessman and still get 90% of his funding from former businessmen. Foundations are a slower and longer slog. The trick is to relate the method of finding funds to your work. Recommended reading the piece http://www.ssireview.org/articles/entry/how_nonprofits_get_really_big/
JL asked social entrepreneurs not to wait for money but get to work. She used funds from friends and family for the first two years. Now 30% of her income comes from business service fees from corporate partners. She also recommended going to the new 'venture philanthropists'. Programmatic funding from Foundations is poison. CS added that a 'business model' pays for itself. One of the very few nonprofit ideas to hit global scale in the last decade has been microfinance and it pays for itself.
The blurring of lines between government, corporate and nonprofit sectorsMS said that in today's world solutions will come from different sectors. SEs have to position themselves accordingly. At the same time they have to avoid conflict of interest in order to preserve their long term credibility. At the end of the day all money is 'dirty' to some extent. However, you have to ask yourself who won't you take money from. AL said that SEs should not discount their own power. She gave an example of how she turned down an agreement with the New York state. They got back to her and begged her to sign it on her terms. The key to success in this world of blending of sectors is the ability to wear many hats - being comfortable in a board room setting as well as a church basement. CS said that Obama-like you have to acknowledge today that the key issue is effectiveness. It does'nt matter who does it.
Nonprofits in tough times
JL said that she was happy that many nonprofits would go under. A Darwinian process which weeds out the ineffective, weeds out those who work the same issue in the same geographical area many times over, is necessary. CS said that he has also been advocating an M&A for nonprofits - Marriage and Adoption. A downturn would be good for those with their own revenues. It would also be a necessity because Foundation money is shrinking. JL advised recent graduates not to start with SE but develop something on the side for a couple of years by using their afterwork time.
Scale
CS said that advocacy or 'imitation through advocacy' is essential for scaling the impact of any social business. He again cited the microfinance example (he works with BRAC). He mentioned franchising as a very helpful way to reduce risk and increase scale. 30% of all retailing in the US happens through franchising for the same reasons. He recommended reading http://www.ssireview.org/images/articles/2007FA_feature_mcleod_gran... by the authors of 'Forces for Good' a pathbreaking book on nonprofits.
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