SOCIAL ENTREPRENEURSHIP This page intentionally left blank SOCIAL ENTREPRENEURSHIP New Models of Sustainable Social Change Edited by Alex Nicholls 1 3 Great Clarendon Street, Oxford ox26dp Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries Published in the United States by Oxford University Press Inc., New York ß Oxford University Press 2006 The moral rights of the authors have been asserted Database right Oxford University Press (maker) First published 2006 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this book in any other binding or cover and you must impose this same condition on any acquirer A catalogue record for this title is available from the British Library Library of Congress Cataloging in Publication Data Data available Typeset by SPI Publisher Services, Pondicherry, India Printed in Great Britain on acid-free paper by Biddles Ltd., King’s Lynn, Norfork ISBN 0–19–928387–7 978–0–19–928387–3 10987654321 Preface Jeff Skoll The rapid industrial and technological advancements of the last century have led to many breakthroughs, but they have also left us to confront an uncertain future. With real threats of environmental and economic collapse, terrible diseases, over-population, war, terrorism and menacing new forms of weap- onry, we have much to overcome. Efforts by our governments and institutions have proven insufficient to reverse these destructive trends. Our best hope for the future of humanity lies in the power and effectiveness of socially motiv- ated, highly empowered, individuals to fight for changes in the way we live, think, and behave. Those four sentences perfectly capture the case for social entrepreneurship. But they are not unique to our time: the same could have been said 100 years ago, 200 years ago, 300 years ago at the beginning of the Industrial Revolution. One of the great ironies of history is that the solutions to current challenges frequently create new challenges even more menacing. Industries that have improved the quality of our lives have also created new problems that threaten our very existence. Technological innovations that were developed to increase the efficiency of life have frequently been used to increase the efficiency of taking life. We can split the atom, walk on the moon, communicate with another person anywhere in the world in the blink of an eye, and yet poverty, violence, and illness in much of the world are as pervasive as they have ever been. But the nature and the wonder of humanity is that while there are always tumultuous events and seemingly overwhelming challenges to face, people, exceptional individuals, and ideas and movements emerge to face and find solutions to these challenges. Social entrepreneurs are those people—the practical dreamers who have the talent and the skill and the vision to solve the problems, to change the world for the better. Social entrepreneurs have a unique approach that is both evolutionary and revolutionary, operating in a free market where success is measured not just in financial profit but also in the improvement of the quality of people’s lives. Social entrepreneurs take workable value creation models and adapt them for the benefit of all our communities. They do not buy into the notion that only governments and powerful individuals and corporations are in a position to determine where and how resources are allocated. They believe that any individual has the potential to make positive v Preface changes not just in our communities, but also in society as a whole. And they put that belief into action, in creative ways that are described throughout this book. At the world’s great foundations, universities and charitable institutions, social entrepreneurship has rapidly become the most influential idea of our time. For these institutions, theories of social entrepreneurship offers a power- ful tool to identify, train and support individuals with the potential to create major social change. For the entrepreneurs themselves, it presents a roadmap to realize their dreams. Yet, for all of this, social entrepreneurship remains as much an idea as a movement. There is a great need for ongoing scholarship and publications that serve as a call to arms to current social entrepreneurs, as an inspiration to budding social entrepreneurs, and to document the field for institutions, academics, and legislators. The Skoll Foundation has supported the Skoll Centre for Social Entrepre- neurship to contribute to meeting this need, and to promote the advancement of social entrepreneurship worldwide. This volume, synthesizing research and lessons from practice by leading social entrepreneurs and scholars in the field who gathered for the first Skoll World Forum on Social Entrepreneurship in March 2004, exemplifies the Centre’s aim to produce work that both engages with theory and is also valuable to practitioners in the field. Social entrepreneurs have a vision of the future and will stop at nothing to see that future come true. It is up to us to help them succeed in order to ensure that the failures of the past do not become the failures of the future, and to build a world where all people, regardless of geography, background, or eco- nomic status, enjoy and employ the full range of their talents and abilities. vi Contents Acknowledgements x List of Figures xi List of Tables xiv Abbreviations xv About the Authors xix Introduction 1 Alex Nicholls Part I. New Perspectives 37 1. Social Business Entrepreneurs Are the Solution 39 Muhammad Yunus 2. The Citizen Sector Transformed 45 Bill Drayton 3. For What It Is Worth: Social Value and the Future of Social Entrepreneurship 56 Rowena Young 4. Cultivating the Other Invisible Hand of Social Entrepreneurship: Comparative Advantage, Public Policy, and Future Research Priorities 74 Geoff Mulgan Part II. New Theories 97 5. Social Entrepreneurship: The Structuration of a Field 99 Alex Nicholls and Albert Hyunbae Cho 6. Social Entrepreneurship: Agency in a Globalizing World 119 Paola Grenier vii Contents 7. Rhetoric, Reality, and Research: Building a Solid Foundation for the Practice of Social Entrepreneurship 144 Beth Battle Anderson and J. Gregory Dees 8. Social Entrepreneurship: It Is for Corporations, Too 169 James E. Austin, Herman B. Leonard, Ezequiel Reficco, and Jane Wei-Skillern 9. Social Entrepreneurship: Exploring a Cultural Mode Amidst Others in the Church of England 181 Doug Foster Part III. New Models 203 10. Social Enterprise Models and Their Mission and Money Relationships 205 Sutia Kim Alter 11. The Socially Entrepreneurial City 233 Charles Leadbeater 12. Helping People Is Difficult: Growth and Performance in Social Enterprises Working for International Relief and Development 247 Alex Jacobs 13. The Social Entrepreneurship Collaboratory (SE Lab): A University Incubator for a Rising Generation of Social Entrepreneurs 270 Gordon M. Bloom Part IV. New Directions 307 14. Wayfinding Without a Compass: Philanthropy’s Changing Landscape and Its Implications for Social Entrepreneurs 309 Sally Osberg 15. Delivering on the Promise of Social Entrepreneurship: Challenges Faced in Launching a Global Social Capital Market 329 Pamela Hartigan 16. Social Entrepreneurship: The Promise and the Perils 356 Jerr Boschee 17. Moving Ahead Together: Implications of a Blended Value Framework for the Future of Social Entrepreneurship 391 Jed Emerson viii Contents Endnote 407 Alex Nicholls Bibliography 413 Index 431 ix Acknowledgements First, I should like to thank all the outstanding contributors to this collection who so generously gave their time, thinking, and research. Their patience with me throughout the—sometimes tortuous—process of editing this historic volume has been exemplary and is much appreciated. Second, I owe a considerable debt of gratitude to my academic ‘patrons’— Jeff Skoll and Prof. Anthony Hopwood—without whose material support this book could never have been written. Third, I want to single out for thanks my mother Catherine Nicholls, who has been tireless and fearless in her support of my work over the years. She is truly an extraordinary woman. Sam and Harriet have also been vital to me as this book has come together and are always in my thoughts. I want to praise the Skoll Centre for Social Entrepreneurship support team— Kathryn Smyth and Mona Turnbull—for their good humour and skill whilst making considerable contributions to the Skoll World Forum in Social Entre- preneurship and the running of the Centre in general. Finally, I also need to express my most affectionate thanks to my extraordinary colleague at the Skoll Centre, Rowena Young, who helped me frame my arguments and structure the book throughout its production. This book is dedicated to Isabel, my guiding star. ‘Social Entrepreneurs need always to be ten years ahead of their time and to be prepared to be ridiculed. This is the only way to bring about real change.’ Bunker Roy, Barefoot College (Campinas, Brazil, 2004) x List of Figures I.1. Positioning of social entrepreneurship internationally 5 I.2.