Social Entrepreneurship: Why you can't ignore this buzzword

Echoing Green, along with the Columbia School of International and Public Affairs, put out an interesting report (preliminary, they note) in June of this year titled Early Stage Impact Investing: A Blueprint for Screening Social Impact Potential.

Why you should care:

1. Maybe some of you consider yourselves social entrepreneurs.  You're seeking funding, but whether or not you're building up a tax-exempt nonprofit organization, you identify primarily as an entrepreneur and you're thinking in terms of investors instead of donors.
2. If you don't identify that way, you still don't have the luxury of ignoring that perspective.  Venture Philanthropy as a concept is not going anywhere in the near future, and in my experience it's not only growing as a philanthropist mindset, it's a good thing for the sector as a whole.  You need to be able to make a case for your organization and projects in terms of social investment, with calculable returns and impact.

This report, among other things, does an excellent job of highlighting seven elements that "investors should probe in order to mitigate impact risk and increase the potential for an investment to achieve its social targets."  When you cut through the jargon, you've got yourself a nice list of seven items you want to address (or be able to address in further conversation) any time you are putting together a grant or proposal for someone who identifies as a venture philanthropist or has been indoctrinated into the sector fad of "accountability."

• Social mission: how do you demonstrate your commitment to your mission? This all boils down to that thing your grade school (high school?) writing teachers kept telling you: show, don't tell.  "We're committed to fighting illiteracy" is not as expressive as "we have tutored 10,000 students this year, and all of them now test at grade level in reading comprehension."  (Wouldn't that be amazing?)
• Evidence: Can you prove causality?  How does a donor know that your program directly caused the changes (outcomes) and that those changes have an impact for society?  (Maybe all those thousands of kids were going to test at grade level, or their teachers are really good and it's not the tutoring that helped them.)
• Social entrepreneur: Just like investing in businesses, the leadership matters.  A great idea won't make it if the organization's director is bad at their job...so inspiring confidence in the leadership team is essential.
• Impact measurement: How are you evaluating your work? (There's no one right answer, as long as you're doing it in a sustainable and sensible way, and can communicate to the donor what kind of reports and measurements they should expect to see in the future.)
• Potential for disruptive innovation: What makes you unique?  Why should a donor give to you, instead of one of the gazillion other organizations trying to solve the same problem/provide the same services?  
• Potential for scale: This is mostly applicable to smaller organizations, but the general question is "if you succeed, can you change the world?"  When you're looking at investments, you want to know if you're investing in a very nice little coffee shop that will serve its neighborhood well, or if you're investing in Starbucks.  Most investors salivate over the latter more than the former, but you have to be honest about what you are and hope to be.
• Governance: This is a different aspect of leadership, and importantly distinct.  But making it clear that this yours is a well governed (and not just well helmed) organization is good for addressing everything from paranoia (how do I know you won't misuse my funds) to agility (if "market conditions" change dramatically tomorrow, will you have the adaptability to change with them?  Think about March of Dimes, which started to combat polio in children...but still exists, despite the near eradication of that disease, thanks to good governance.)