Education Reform vs. the Social Entrepreneur

Isn’t creating significant change in society what the social sector (nonprofits and the philanthropists who fund them) is all about?  A person starts a nonprofit organization when they recognize some disequilibrium (poverty, homelessness, failing schools) and they have a theory of change that will result in righting that disequilibrium.

I think at times, however, the structures that we create in the social sector get us away from that fundamental goal.  It’s interesting to take a step back and evaluate whether or not activity within the social sector is significantly changing broken systems.

Marc S. Tucker, president of the National Center on Education and the Economy, in Washington, DC, wrote a thought-provoking and controversial opinion piece at the Chronicle of Philanthropy about how social entrepreneurial programs like Teach for America, Green Dot and KIPP are not really solving the problem of the crumbling American school system.  He argues that these programs, which are beloved by funders and proponents of social entrepreneurship, “don’t have a prayer of dealing with the problem at the scale that is needed.”  It is not the quality of the innovative programs or the ability to get results that he is at odds with.  Rather, it is the lack of scale of these programs.  They just can’t address the entire system:

But as exemplary as they are, small programs like these are not equal to the task. Teach for America accounts for just two-tenths of 1 percent of the new teachers entering our schools every year. The entire enrollment of the Green Dot schools is no larger than the enrollment of one typical high school in the Los Angeles Unified School District. KIPP schools, the object of enormous attention in the national news media, has an enrollment equal to three-hundredths of 1 percent of the 92,000 public schools in the United States.

He argues that instead of funding these “handful of small, disruptive interventions” we need to emulate the most successful countries’ educational systems by:

• Recruiting teachers from the top one-third to one-fifth of college graduates by paying them as much as the other professions they could just as easily choose to go into: medicine, law, architecture, accounting, engineering.
• Giving them the same kind of control over the way their services are delivered to their clients as the other professions have over theirs…turning virtually all of the decisions as to how the schools are run over to them.
• Adopting high-quality board examinations like those the most successful countries use, which can measure a student’s grasp of the concepts underlying the subject, the student’s creativity and capacity for innovation, as well as the student’s knowledge and ability to apply what he or she has learned to real-world problems.
• Shifting the school financing system away from a reliance on the local property tax and toward a system that makes sure each and every student has the resources needed to get to internationally benchmarked standards.

He recommends a complete overhaul of the American education system at a cost of $60 billion a year in initial investments.  These costs would eventually be offset by expenses saved.

He argues that to get this kind of systemic change donors to educational programs must “shift their attention from financing cameo programs to putting their money into groups that influence public policy. That’s where the payoff is.”

It is an interesting, bold idea.  I’m not sure, however, that I completely agree.  I think we’ve seen over the past several decades that education policy is broken.  There are so many special interests in the field of education policy, it’s unclear to me where we would pour the money.  Perhaps we needed social entrepreneurs like Teach for America and others to point out the problems within the system and offer a theory of change.  Now that they have demonstrated that there are programs that work and new ways to do things, we can now create policy around those ideas.  And with a new administration and a new Secretary of Education, Arne Duncan, who has a history of reforming the Chicago Public Schools and implementing new models like Teach for America, perhaps policy reform has a chance.  It will be interesting to watch.

Tags: Arne Duncan, Chicago Public Schools, Green Dot, KIPP, Social Entrepreneurship, Teach for America

Austin A Potential Hub of Social Enterprise

The terms Social Enterprise and Social Entrepreneurship are often used interchangeably, but they are really two very different concepts. While social entrepreneurship is defined as pattern changing ideas for solving persistent social problems (you can read my post laying out this definition here) Social Enterprise is any business that has a double bottom line, i.e. they exist to make a financial AND social profit.  Although I think both have potential in Austin, I would argue that Social Enterprise could really thrive in Austin’s entrepreneurial, venture capital, tech-savvy, green economy.

There is a continuum of social enterprise that ranges from a nonprofit that has an earned income venture on the side (an art museum gift shop) all the way to a publicly traded for-profit company that includes a social good in its business model (a solar panel company).

More and more people are becoming interested in the idea of social enterprise as a necessary and very viable part of a strong American and global economy. The blending of financial and social return could be a necessary salve to an economy that has been torn apart by lack of regulation and greed.

In fact, some social enterprises seem to be thriving despite the recession.  Better World Books is a great example of this.  They collect and sell used books online and then give a good part of the profit to nonprofit literacy programs throughout the world.  They are also saving thousands of tons of waste by keeping discarded books from ending up in landfills.  They are achieving a triple bottom line: financial, social, and environmental profit.  And they are doing very well, despite the recession:

• Since launching in 2002 the company has converted 16.4 million donated books into $5 million in funding for literacy and education.
• This holiday season they saw a 500%+ increase in gift certificate sales over the previous holiday season.
• Revenue grew 194% in December 2008 compared to the year before.
• December revenues grew to $2.1 million and revenue for January is expected to top $4.5 million.
• They are on target for $31 million in revenues this fiscal year.

Better World Books got a significant investment of $4.5 million in April 2008 from Good Capital, a venture capital firm whose investments have BOTH a social and financial return.

So, what you start to see is an interesting model that could really take off in Austin.  We already have tremendous venture capital wealth.  We have a very entrepreneurial business climate.  We have a real interest in social causes, particularly green ones.  What if some of the investment capital floating around the city went to social enterprises?  In fact, I think there is an opportunity for Austin to create a new model for cultivating social enterprise and become a real leader in this space.  Nathaniel Whittemore, Director of the Center for Global Engagement at Northwestern University, described in a recent blog an ideal environment to stimulate successful social enterprise:

So here is what I’d like to see. Someone combines The Hub model of collaborative working space for social entrepreneurs with the Y-Combinator model of funding low-cost tech startups [provide promising startups small amounts of seed capital and intense mentorship and networking in anticipation of further investment ]. In this model, which is geared toward social enterprise, the Y-Combinator style investment would be focused on tech startups that are building services useful for other businesses and social startups (things like Yammer, which is great for keeping a team of volunteers or employees connected to one another). In addition to the cash investment, the tech startups get to work (and maybe even live?) in the Hub space. In return, they give up equity – but also a small chunk of their developer time (25%? 10 hpw?) to pro-bono or reduced cost projects for the nonprofit social entrepreneurs who are part of the same Hub community. This combines the density, talent and energy of the tech startup world with the mission focus of the social enterprise world. All it would take are the right partners. Sounds like a pretty good combination to me…

Doesn’t this sound like Austin?  We have all kinds of tech incubators and venture and angel capital.  If there were a social enterprise incubator/venture fund here, we could be on the cutting edge of this movement.  And we have all the pieces already in place to make it happen.  It’s a pretty interesting proposition.

Tags: Better World Books, Good Capital, Social Enterprise, Social Entrepreneurship, The Hub

Plan in the Face of Uncertainty

As I continue to meet with nonprofit organizations, it amazes me how few have a detailed, comprehensive strategic plan.  And as I write that I can imagine many rolling their eyes at the dreaded words: strategic plan.  Why is planning such a dirty word?  I know it can be time-consuming and involve tremendous effort, but the payoff, if done well, can be enormous: better program results, more effective use of resources, improved staff morale, more engaged board of directors, and so on.  And in these days when resources are tighter than ever, a solid, well-thought out plan ensures that every last resource (financial, staff, volunteer) are used most effectively.

I realize that much of the lack of affection for strategic planning comes from the fact that it can be an organic process.  And sometimes a strategic planning process can waste a lot of time but result in very little.  Or, if it does result in a plan, that plan sits on bookshelves gathering dust.

A real, successful strategic plan lays out a clear path over a future period (3-5 years) with concrete steps to get there.  Then, the plan is revisited, measured, updated by all involved monthly, if not daily.  In essence a good strategic plan is very simple:  this is where we want to be, this is how we are going to get there, now get to work.

So here is my suggested strategic planning process.  I will preface this with my bias that an outsider should be involved in some of the facilitation of this process.  If a staff or board member facilitates there will be a bias to the process and the results will be suspect.  An objective third party can ask the hard questions that others within the organization are afraid to, make sure that discussions stay on track, keep the end goal  always in sight, and ensure that an organization doesn’t just settle back into their normal way of doing things.

There are 8 basic steps to a good strategic planning process:

1. Conduct a SWOT: strengths and weaknesses (of the internal organization) and opportunities and threats (facing the organization from external circumstances) among staff, board, and other key constituents to the organization.
2. Do some research on your competitors (those providing similar services in the community) and your consumers (funders and clients) in order to understand trends and reactions to those trends.  This will help you determine how your organization needs to react in the coming years.
3. Revisit/refine the vision and mission of the organization.  These two things are very different, but are often confused.  The vision of the organization is the future reality in the external world that the organization would like to see, for example:  “An end to homelessness.”  It isn’t necessarily achievable, but it is what the organization is striving to make happen.  A mission is how the organization is working towards that vision.  It describes the impact point and what the organization exists to do, for example: “To move the homeless population of Phoenix off the streets through access to education, healthcare and job training.”
4. Create 3-5 broad goals for the organization in the specific timeframe of the plan.  What is it that you want to accomplish in the next X years that will help you achieve your mission?  More than 5 goals are too much for staff and board to focus on.
5. Break each of the 3-5 broad goals into activities, or steps to get there.  What is it going to take to make each goal happen?  What are the specific activities that need to occur?
6. Create a timeline with deliverables, people responsible and due dates for each activity.
7. Create an electronic, interactive format for the timeline so that each staff member can update their piece of the plan on a regular basis.
8. Monitor and measure achievement of the deliverables and the overall goals at least quarterly, and revise the plan as needed.

The key to a successful strategic plan is getting staff and board members involved early and often.  That is not to say that the entire board and staff should participate in each step of the process.  Rather, create a team to lead the process and then find ways throughout to get feedback from others (surveys, retreats, lunches, meetings, etc.).

Finally, a good strategic plan doesn’t have to be long, arduous and difficult to comprehend.  To the contrary, the more basic and simple you can make it, the better.  The end goal is that everyone in the organization will understand the overall plan and how their efforts fit into it.  With everyone on the same page marching toward a shared vision success can be achieved.  And those scarce resources will be made to reach even farther.

Tags: strategic plan

New Ideas in a New Year

2009 is finally here and with the new year comes some interesting new ideas.  The struggles of 2008 have the potential to stimulate innovative solutions.  With a new administration entering office on January 20th there could be significant changes in how the nonprofit sector receives resources (funding, staff, government support, etc).  You can read my post on some of the changes the Obama administration might make here.

But it seems the nonprofit sector is not waiting around for those potential changes.  There just isn’t time.  So, in the midst of the uncertainty facing the sector, some interesting innovation is happening.

In December a Washington, DC coalition of eight regional organizations convened Nonprofit 911 bringing together 500+ nonprofit, business, and government leaders to develop a plan of action that “redefines how the nonprofit sector operates in this new fiscal reality.”  It’s not clear yet (since they’ve been around only a few weeks) exactly what this coalition will do and what the results will be, but it is interesting to see such an unprecedented reaction to the crisis.

Another interesting development is an idea proposed by Independent Sector, a coalition of 600+ foundations and nonprofits.  They are proposing to Congress a federal government revolving loan fund that would reimburse nonprofits for essential services they have performed for local and regional governments.  These governments are now cash-strapped and unable to pay for those services.  Perhaps the beginnings of a conversation about a nonprofit bailout, to follow the financial and auto industry bailouts?  If that’s the case I’d like to see something much more ambitious and sustainable for the long-term.  I’m not sure this is the answer.

However, the interesting part is the discussions that these new ideas are generating.  This New Year should be a very interesting one.

Tags: Independent Sector, Nonprofit 911, Obama