What Does the Handmade Movement Say About Social Entrepreneurship?

I have a new post up at the Change.org blog, “What Does the Handmade Movement Say About Social Entrepreneurship?”. Here is an excerpt:

Last weekend I went to the Renegade Craft Fair, the first time the traveling “edgy craft fair” has made it to Austin. As I passed booth after booth of creative, cool, handmade posters, paper, clothing, bags and other items, I was struck by how this craft fair is a fascinating microcosm of the convergence of three trends that are moving social entrepreneurship toward a tipping point.

The Renegade Craft Fair was started in 2003 in Chicago by Kathleen Habbley and Sue Blatt, two “crafters” who wanted a venue to sell their funky, homemade wares. In the past 7 years the fair has seen great success and expanded to four other cities, including this year’s foray into Texas.

Renegade is one of many examples of a handmade, or “do it yourself,” revolution that is sweeping the country. But I think that this revolution isn’t just about the homemade, it’s also about social entrepreneurship and the converging trends that are (we hope) taking it mainstream…

You can read this entire post at the Change.org blog.

Tags: Austin, Change.org, Kathleen Habbley, Renegade Craft Fair, Social Entrepreneurship, Sue Blatt

The Future of Financing Impact: An Interview with Kevin Jones

I am launching a new regular interview series on the Social Velocity blog that will feature discussions with the leading thinkers and doers in the social innovation space. I will talk with philanthropists, social investors, social entrepreneurs (from the nonprofit and for-profit side) and others leading the way in this new space. What they all have in common is that they are doing really exciting,  interesting, provocative, challenging things that are pushing the social innovation movement forward.  We will discuss what they are contributing to the space, what excites them, what concerns them, what we should be thinking about, and what’s next.

Our inaugural interview is with Kevin Jones. Kevin is a visionary in the social investing and social entrepreneurship arenas having launched two important entities in the field. He co-founded both Good Capital, one of the first venture capital funds that invests in social enterprises, and the Social Capital Markets Conference (SoCap) which marks its third year with the upcoming October event. He is also part of the team launching the first US node of The Hub, a network of more than a dozen work spaces for social entrepreneurs in cities across the world from Cairo to London.

Nell: This is the third year of the Social Capital Markets conference. You have said that the first year defined the social enterprise landscape and the second year validated the space, so what are you hoping that this year accomplishes?

Kevin: We want to find out what the next thing is that this community, this movement, this asset class should do, the next big obstacles to overcome, the place where we could put our efforts to make the biggest difference. Now that people are taking us seriously there is a need to understand how we fit into the landscape and how impact investing can leverage its, uh, impact by partnering with nonprofits, foundations and public sources of funding.

Nell: There are an increasing number of conferences in the social innovation/social entrepreneurship space. How is SoCap different? What is the value add of this conference?

Kevin: SoCap brings together more people from a broader perspective and approach to the intersection of money and meaning than any other conference. It’s the place your most likely to run into people you don’t know but should know. Cross pollination and expanding the dialogue while keeping the conversation focused on making a difference in an increasingly intelligent, and increasingly collaborative way is what SoCap10 is about.

Nell: It’s true that SoCap brings together an amazing group of thought leaders, social entrepreneurs and social investors for 3 days in San Francisco, but what happens after the conference ends? What changes to the social enterprise/social investing space have you seen as a result of the past two SoCaps?

Kevin: I’ve seen startups get funding. I’ve seen people from the corporate world get jobs in social enterprise, I’ve seen funds raise multiple millions to achieve scalable social impact. I’ve seen deep and lasting partnerships form between people making a difference. I’ve seen the market fragment and pieces of SoCap pop up in either regional approaches or specific vertical markets, from community activists to nonprofit funders, to technology conferences about money. The market at the intersection of money and meaning is a meme, an idea that I see growing and finding a home within a lot of other groups’ frame of reference.

Nell: This year you have made a deliberate effort to include nonprofits and philanthropy in the conference with the new Tactical Philanthropy track, as opposed to a greater focus in past years on the for-profit side of social entrepreneurship and social investing. Why the shift and what are you hoping comes out of this widening of the net?

Kevin: Well, nonprofits and philanthropy are a big part of the market of money and meaning, now that’s been established as a real place, this intersection of money and meaning. You could even say the new for-profit impact investors have crashed a party long established by philanthropy. It was past time to acknowledge that, and by bringing in Sean Stannard-Stockton [CEO of Tactical Philanthropy], we’ve got an expert and convener with far deeper knowledge than I have in the area to lead the way. SoCap10 is a lot about translation as people learn to work together across boundaries and frames of reference to build a bigger social capital market than either philanthropy or for-profit impact investing could do on their own. And of course, we also have a much bigger public sector funding participation than we have before. Some of the practical thought leaders are joining us to think and talk about what the next thing to do is.

Nell: How has the social enterprise space changed in the last three years and where do you see it going?

Kevin: It’s bigger. People are taking it seriously. We are starting to see some of its limitations, and some of the areas where it needs to grow. It used to be the cutting edge, out there doing this new thing. Now it’s the leading edge, connected to other groups and partners. I think I see the old hero myth dying out and people recognizing that we need enterprises that go beyond the heroic visionary founders, that deal with necessary founder transition issues to grow organizations with scalable impact. Or maybe that last part is wishful thinking.

Nell: What do you hope the social enterprise landscape looks like when SoCap 2015 rolls around?

Kevin: I do hope we have grown beyond the heroic visionary entrepreneur as our model. I hope the cutting edge, change making, risk taking aspects of the movement meets asset class are still intact while it becomes more tightly coupled to public sector and philanthropic efforts to make a difference. I hope it has found a room for the crowdsourced capital, like more lending platforms, in new areas like fair trade, and beyond microfinance. I hope there is a deeper linking between efforts to eradicate poverty in the U.S. and internationally, market growth while preserving the upstart innovation nature of what makes social enterprise a great positive force for disruptive innovation.

Tags: Good Capital, Kevin Jones, Sean Stannard-Stockton, SoCap, Social Capital Markets conference, Social Entrepreneurship, social investors, Tactical Philanthropy, The Hub

Social Innovation Comes to Texas with a Bang

As I wrote in an earlier post, I have been part of an exciting new project that is bringing social innovation to Texas.  The Texas Social Innovation Initiative is a partnership between Dallas Social Venture Partners, the OneStar Foundation, and Root Cause in Boston to help seven innovative Dallas-area nonprofits prepare a pitch for growth capital to social investors.

Social Velocity has been one of three consulting teams working with these seven nonprofit organizations to create a compelling growth capital pitch. I have been working with Big Brothers Big Sisters of North Texas helping them prepare a compelling pitch to grow their one-to-one mentoring program for children of imprisoned parents.  I’ve also been working with H.I.S. Bridge Builders to grow their education and employment training program in the poorest parts of Dallas.  Both organizations have demonstrated an ability to change lives in critical ways, they just needed help articulating their work, their results and their plans for growth to an audience of savvy social investors.

Both nonprofits will join five other nonprofit organizations to present their growth pitches to an audience of 300+ potential investors on June 10th. The pitch stage will be the featured component of a day-long showcase of social innovation, called the bigBANG!, at Union Station in Dallas.

The bigBANG! will bring together social investors, philanthropists, social entrepreneurs, nonprofit leaders and others who are interested in connecting money and social change in Texas. The day will feature a socially conscious marketplace, profiles of lessons learned by social entrepreneurs, the fast pitch stage and much more.

But the best part is that this momentum around social innovation in Texas doesn’t have to end on June 10th. OneStar is currently looking for funding to take this project around the state, giving many more innovative nonprofits the opportunity to seek growth capital for their proven solutions. I am so excited to see momentum around social innovation growing in Texas.  It just makes sense that this great big state with a commitment to social issues, a strong entrepreneurial spirit and plenty of cash would be ripe for the social innovation movement to take hold.

If you’re going to be in Dallas on June 10th, come join us!

Tags: Big Brothers Big Sisters North Texas, bigBANG!, Dallas Social Venture Partners, H.I.S. BridgeBuilders, OneStar Foundation, root cause, social entrepreneurs, social investors, Social Velocity, Texas Social Innovation Initiative

Financing Not Fundraising: The Plan

A few months ago I argued that nonprofits need to stop fundraising and start financing for social impact. As I wrote:

Fundraising in its current form just doesn’t work anymore.  Indeed, traditional fundraising is holding the sector back by keeping nonprofits in the starvation cycle of trying to do more and more with less and less. Really, what the sector needs is a financing strategy, not a fundraising strategy.  By that I mean that nonprofits have to break out of the narrow view that traditional FUNDRAISING (individual donor appeals, events, foundation grants) will completely fund all of their activities.  Instead, nonprofits must work to create a broader approach to securing the overall FINANCING necessary to create social change.

The idea is that nonprofits can no longer work towards social impact on one side and throw a gala event (or send out a direct mail appeal or write a grant) on the other side and think that this disjointed, haphazard way of funding their work is sustainable. To truly achieve social impact, nonprofits need to take a huge step back and figure out how to employ all of the financial tools available to them in an effective, integrated way.  This is how you finance, rather than fundraise for, social impact.

Over the next few months, in an occasional series titled Financing Not Fundraising, I will elaborate on this argument and demonstrate what financing, as opposed to fundraising, for social impact looks like.

Today I will launch the series with the core element of the idea, which is a financial plan. In essence, a financial plan is a key element of, not separate from, a nonprofit’s strategic plan. That means that the goals of the strategic plan are created with the full knowledge of 1) what it will cost to reach those goals and 2) how the money to cover those costs will be secured.

A financial plan differs from a fundraising plan in a number of ways. A financial plan, unlike a fundraising plan:

• Includes ALL activities that bring money in the door (individual donors, foundation grants, earned income, corporate sponsorships, government contracts, loans, etc.) and fully integrates them into an overall strategy and execution plan.
• Supports the short AND long term goals of the organization
• Funds the programs AND infrastructure of the organization. It recognizes the necessity of and supports not only the nonprofit’s direct service activities, but also, the infrastructure, systems, planning and other organization building that will ensure that those services thrive and grow
• Understands the characteristics and uses of different kinds of money (i.e. revenue versus growth capital, loans versus grants) and employs each available financial vehicle in the most effective way
• Employs money-securing activities that are in line with, not opposed to, the core competencies of the organization

What I am suggesting is that nonprofits stop exhausting their boards, staffs, donors, friends, and clients with a series of disjointed activities that are meant to raise money, but actually just end up making poor use of a nonprofit’s already limited resources. Instead, nonprofits need an integrated, thoughtful, strategic financing plan that makes social impact a reality.

Photo Credit: Steve Wampler

Tags: direct mail appeal, financing not fundraising, Fundraising, gala event, growth capital, nonprofit, strategic plan

The Strategy of Disruption

Competition is often a dirty word in the nonprofit sector.  Indeed, playing nice is the norm. But to truly solve social problems, nonprofits have to  not only compete, but compete well.  This means understanding how their strengths compare to their competitor’s weaknesses, and how to take advantage of that.

Umair Haque, Director of the Havas Media Lab, writing on the Harvard Business Review blog argues that rather than trying to beat their competitors at their best game, businesses need to follow the “golden rule” of competitive strategy, which is “What your fiercest rival does badly, do incredibly well.”

He finds fault with the normal competitive strategy in the business world, which is to compete on similarities. This kind of competition leads to mediocrity. To truly be disruptive, innovative, game-changing, businesses must be markedly, competitively different: “In difference lie the seeds of disruption. In similarity, only obsolescence, and decay.” He cites the auto, food and media industries that were suddenly overtaken by competitors who realized that disruption was the way to go:

Ford, Chrysler, and GM spent a decade trying to best another at churning out the biggest, hungriest SUV — but none tried to do what all sucked at: make a smaller, cheaper, more fuel efficient car instead…Big Food has spent half a century trying to make food cheaper, with artificial flavors, colors, and ingredients — but none tried to do better what all sucked at: make food more nutritious instead…[Media] incumbents tried for decades to lock down content in walled gardens — but none tried to open it, unlock it, and free it. Enter a new set of revolutionaries, wielding the Golden Rule like a superweapon. Who did well what auto incumbents did badly — making a smaller, more fuel efficient car? Tata, with its revolutionary Nano. Who did well what food incumbents did badly — delivering healthier food? Whole Foods. Who did well what media incumbents did badly — freeing and unlocking content, so it was easily discoverable? Google.

Nonprofits can learn a lot from this argument. The sector is by definition about disruption. It exists to change some sort of disequilibrium, to right some wrong, to fill some gap not addressed by the market. Disruption is the name of the game.

But in order to be truly disruptive, nonprofits must be strategically competitive. It is of no use to recognize a gap in the market (children who are not being fed, elderly people who are not being housed, sick people who are not receiving medical attention), create a solution to address that gap, and then sit back and “collaborate” with other nonprofits or government agencies who are delivering a mediocre solution.

Don’t get me wrong. I understand that the nonprofit sector, unlike the business sector, is based on concensus and collaboration. But sometimes those concepts serve as a crutch rather than a tool.

If the ultimate end goal is to solve a gap in the market, doesn’t it make sense to analyze the other solutions out there, their strengths and weaknesses, and then create a strategy accordingly?  If a nonprofit exists alongside another nonprofit that is delivering an inferior solution, doesn’t it make sense to compete in order to make better use of the funding, support, volunteers and other resources that the inferior organization is collecting?  The alternative is that solutions become mediocre instead of disruptive. And we need a lot more disruption right now.

Photo Credit: Tony the Misfit

Tags: competitive strategy, Harvard Business Review, Havas Media Lab, nonprofit strategy, Umair Haque