Along with the burgeoning social entrepreneurship movement comes a bit of hubris that social entrepreneurs know better how to create social change than do the nonprofits that have been working toward social change for years. Some social entrepreneurs argue that nonprofits are too set in their ways to embrace a new way of creating solutions. I tend to disagree. We can’t, nor should we, discount and dismiss an entire sector of people and organizations that have been working on social problems for centuries. However, I do think that there are some things that nonprofits can learn from social entrepreneurs. One of those is how to lose the charity mindset.
Nonprofits are sometimes referred to as “charities,” and it is a real misnomer. But beyond semantics, the word, and more importantly the mindset, does a real disservice to organizations working toward change A charity mindset is when an organization, its board, its funders or others promoting its work have a narrow view that the organization is benevolent, but not critical, to the world at large. The charity mindset assumes that a nonprofit starts from the position of need, inadequacy, and burden, rather than a position of opportunity, strength, and effectiveness. The charity mindset differs from a social entrepreneur mindset in a number of ways:
- Symptoms vs. Solutions: A charity, by its very definition, exists to provide aid to the needy, not to solve the underlying cause of the need. This is not to say that every nonprofit can work toward solving an underlying problem; there will always be organizations that exist simply to provide basic needs (food, shelter, safety, etc.). But I wonder if too many nonprofit organizations view their work as residing in the “charity” camp, instead of working, as social entrepreneurs do, to understand the cause of the need and how how they may be able to attack and solve it.
- Fundraising: A fundraiser in the charity mindset apologizes for the burden of asking someone for money, but a social entrepreneur offers investment opportunities to prospects. Wendy Kopp from Teach for America went around evangelizing the Teach for America story and sought investors who wanted to get in on the ground level of an incredible opportunity to change the American public education system.
- Investment in Infrastructure: Charities spend every last penny on the program and leave little money for building the organization. Social entrepreneurs understand that it takes organizations, infrastructure, systems, and talent to effectively execute on a solution to a social problem.
- Respect: Charities may be beloved by their supporters, but they may not garner a lot of respect from them. Social entrepreneurs behave as equal partners with funders in creating solutions, and, as such, they command and receive real respect from investors, volunteers, partners and others.
- True Costs: Charities like to claim that as much money as possible goes to direct services, but social entrepreneurs recognize the true costs of their endeavors and are open and honest with funders about those costs. In fact they demand that funders understand and support those true costs.
I think the old adage is true, people will treat you the way you ask to be treated. If a nonprofit acts like a charity, people will treat it like one. Nonprofits need to stand up and demand to be treated as critical, equal partners in creating solutions.