Jim Pitofsky, SEA Change
| Brief
Biography |
Note:
This summary of Jim Pitofsky's talk was prepared from notes taken during the
session and is not a transcript of his remarks. -PB
I want to spend some time with you this morning thinking with you about what
these words mean and telling you a little of what we have learned through some
research and discussions about Social Entrepreneurship over the past few
years. I will probably use several terms more or less interchangeably --
social entrepreneurialism, social enterprises, social innovators. I think
there is little to be gained at this early stage from trying to make sharp
distinctions among these ideas. Better to think of it as an emerging
movement in the nonprofit sector that has attracted a good deal of interest and
has stimulated some creative new ways of doing important work.
Social Entrepreneurship is made up by both:
- Social Enterprises: create businesses that sustain their own work, at
least on a partial level (not dependent upon philanthropy)
- Social Innovators: creating a new service that is not self-sustaining, but
is new and much needed
In general, the social entrepreneurial activities I have seen are focused on
advancing the organization's mission, building a sustainable enterprise, and
finding ways to operate that are not dependent on philanthropic support all of
the time.
[Picture of Jim talking] In this sense, social entrepreneurs are to be found working toward social
change. Some people think social entrepreneurial activity is always
innovation. That seems too narrow to me. It is about being effective
in addressing human needs, not just "innovations" in doing that.
Social Entrepreneurs create a balance between social services and
structure/policy change. It is important to know that the wheel does not have to
be reinvented to be effective. It is a blend of proven practice with
innovation.
For a better definition of Social Entrepreneurship, see the Roberts Enterprise Development Foundation's website at http://www.redf.org.
At that site you can either read or download the book New
Social Entrepreneurs: The Success, Challenge, and Lessons of Non-Profit
Enterprise Creation as well as find lots of useful information in the Frequently
Asked Questions. Also very useful is Greg Dees article called
"The Meaning of Social Entrepreneurship" which was published in the Harvard
Business Review for January-February 1998.
What lies ahead if you want to be a social entrepreneur? In
our research, we identified quite a long list of challenges that you will face. In no particular
order, here are some things social entrepreneurs identified as significant
issues in their work and some things we noticed as we surveyed the field that
will require attention as this movement develops.
- How does one gain access to necessary financial resources? How can
the field create access points? How does an entrepreneur raise money
if there is no track record to support future plans?
- Many NPOs are not wired, not connected to the technology that's needed for
efficient management and effective networking.
- Nonprofit leaders often come to the job with terrific passion. Entrepreneurial activities
may require unfamiliar skills, especially
management skills. There are enormous needs for more efficient
transfer of knowledge.
- Peer networks and mentor networks could connect people with similar
interests and make sure programs are not developed in a vacuum. But
creating networks is difficult in its own right.
- Entrepreneurs have to learn balance: doing the actual work against the
time spent seeking help, communicating with mentors; innovation against the use of
proven practices; time spent raising money
against the time spent doing the program; and staying on track with both the details and the large vision simultaneously
takes a special kind of skill.
- Managing with two bottom lines requires meeting both social and financial
goals.
- Finding the time for organizational development in general while also
meeting the demands of day-to-day programming; assuring sustainability;
avoiding burn out for the entrepreneurs themselves; and preparing for and handling the transfer of leadership as organizations
mature.
- Measuring impact. Not just program outputs but the outcome of the
entire process of which your program is a part; calculating the social return on investment in a disciplined and revealing
way. This procedure is described at the Roberts
Enterprise Foundation website I mentioned earlier..
- Growing to scale. Taking full advantage of the opportunities created
by operating broadly, or deeply, or both. But not expanding to become
unweildy or distant from the problems that must be addressed.
- Finding, recruiting, compensating and retaining appropriate people, people
with the right talents and passions to make the programs truly effective.
- Making strategic alliances. Including the sorts of strategic alliances
that might better be described as mergers or acquisitions, where the total
number of organizations at work is actually reduced. Can we learn to
be ok with that process?
- Avoiding elitism. Welcoming people into the field who don't fit our
stereotypes, who have not followed the career path that characterizes the
first train blazing individuals.
Which are the most important? From this array of issues, our research has identified six main needs:
- Access to capital
- Building relationships with for-profit organizations and nonprofits for recruiting volunteer
and staff talent
- Internet access to searchable database of useful data about strategies, structures and
innovations
- Adequate resources for Technical assistance
- Creation of venture loan fund to support new enterprises of
nonprofit organizations
- Creation of a network of pro-bono advisors and consultants with real expertise in
legal and financial areas
Some remaining questions
- Is social entrepreneurship right for everyone?
- Is everyone going to claim to be one?
- Can the field find ways to assure effective collaboration between
entrepreneurs and service providers?
- Can there actually be mergers in the nonprofit sector?
- Can we expand access and break out of a pattern of elitism?
- Can (and will) we measure impact? Will we take the time it requires
to do it right?
- Can innovators and the "old guard" cooperate well?
- Can philanthropy change to become more inventive? Be more
engaged? Can anyone find the staff that will use technological
expertise to bring grantmakers together?
- Social entrepreneurs are clear that they want help. Can they prove
they are willing also to help others?
Questions from participants:
Participant: How do you distinguish between traditional nonprofits and
social entrepreneurs?
JP: Entrepreneurs are focused on social change rather than on just delivering
services. Imagine you're walking by a river and you see a baby
floating by in the water. You jump in and pull the baby out. Of
course you do. Then you see another baby floating by. And
another. Should you just keep pulling them out? Or should you head
upstream and fix whatever it is that puts those babies in the river?
Delivering services is important. Stopping the babies from getting into
the river in the first place is social change.
Participant: How do you work entrepreneurially when your mission is
changing widely held social values?
JP: You need to come up with measures that focus on values change before you
start doing the evaluations.
Participant: I strongly support the need for a pro-bono network.
It is very difficult to find professionals with the necessary knowledge and
experience in the legal and accounting fields.
Participant: Do you think the foundation world is changing? Is the
compartmentalization breaking down so program staff can deal with services and
entrepreneurial proposals at the same time.
JP: Definitely. Some foundations are infusing their entire grant-making
efforts with attention to entrepreneurial issues, others are funding the
necessary infra-structure. There is, though, a lot more that needs to be
done. The Packard Foundation is one example of an organization that is
making this sort of change. And there is the recently formed network of
"Grantmakers for Effective Organizations"
which is creating forums in
which grantmakers can talk about these sorts of questions.
I know there's lots more that could be said about this and that my
remarks include some long lists of questions that can't fully be answered
yet. But I think we do have an emerging consensus that entrepreneurial
activity offers new strengths to the nonprofit movement and new resources to
communities in need. People are working on finding the answers we
need. Some of that work will be done today. Thank you for giving me
a chance to share some thoughts and observations with you.
Summary prepared by Putnam Barber from notes provided by Ria Zazycki and
Susan Clifford-Jamroski.
