2011 – The Democratization of the Social Entrepreneurship Movement?

blogs.worldbank.org | Development Marketplace | 2-2-2012

By Jill Richmond

We begin 2012 with an overview of key developments in social entrepreneurship in 2011. As we scan the landscape we note four key findings of 2011 as the field continues to mature. The underlying trends continue to point to the idea that everyone can be responsible for advancing change and impact. This is manifested in the way we are seeing a continued democratization of the movement, a growing emergence of a new demographic of changemakers and discovery that collaboration and peer-to-peer networks continues to be on the rise.

1. An Uptick in Blended Funding Solutions for Social Entrepreneurs

Fact: Social enterprises (SEs) simply cannot be carried by a single source of funding. They need to look at different ways of blending capital to create the largest social impact. SEs are becoming more resourceful in the way they seek funding, and some of the most successful enterprises are using a range of capital sources: seed funding and impact investments, to government grants and CSR funds.

DM, in a continued effort to position SE’s as the third arm of development, is targeting ‘high social impact’ entrepreneurs who need growth finance to expand, scale or replicate their operations in a financially sustainable manner. The DM is working to provide a blended approach to their grantees, supplying them with funds and access to capacity building services, while also helping them access funds from third party investors to ultimately take their innovations to scale.

2. Continued Improvement of Reporting Standards

As more investors are dedicating a portion of their portfolios to mission-driven funds, they are demanding greater data about their social and environmental impacts beyond financial returns. Initiatives like the Global Impact Investing Network’s Impact Reporting and Investment Standards (IRIS) are gaining traction. IRIS began its initiative to develop commonly recognized indicators in 2009.

Others systems include Acumen Fund’s Pulse, a proprietary tool that the organization uses to track its investments. Other findings include the JP Morgan-GIIN report conducted from a survey of 52 impact investors. While the report claims that social investing is still in its infancy, the long-term potential of this new asset class is encouraging. According to the report, respondents plan to invest almost $4 billion over the next year. Most expect that 5-10 percent of overall portfolios will be allocated to impact investments in ten years, with the investor use of third party systems for impact investment increasing by 10 percent in 2010.

3. Diversified and Professionalized Set of Changemakers

Increasingly, social entrepreneurship is making its way into the academic space. More universities that have programs creating specific undergrad and grad programs that focus on social entrepreneurship. “It used to be that a business school’s social entrepreneurship program was just an office, but now it’s often a whole department,” claims Scott Shrum, co-author of “Your MBA Game Plan: Proven Strategies for Getting into the Top Business Schools” in an article for MSNBC.

In fact in 2009, 149 business schools in 24 countries offered courses incorporating social, environmental, or ethical issues – up from 111 schools in 18 countries in 2007. Entrepreneurship programs are working with youth as young as 11 years old, and funders like the Foundation for Youth Social Entrepreneurship are emerging in support of young social innovators internationally.

4. The New Experts – Entrepreneurs

Now that the movement for social enterprise has taken hold, the next step will be to scale it effectively in order to achieve the greatest impact. Kevin Jones, co-Founder of SOCAP, in an interview with Dowser 2011 believes it will be crucial to work collaboratively – both to fund and implement new solutions, and to learn from other proven models for change. This year saw the continuation of collaboration on a number of different levels.

But for every SE fellowship program and organization that nurtures world class social entrepreneurs with methodologies, infrastructure and visibility, there are countless social entrepreneurs working outside esteemed incubators, claims Deron Triff, CEO and Co-founder of Changents in a recently article for HuffPost. “As a result of media technology/connectivity, open-source innovation, and unbridled access to information, many of the most extraordinary social entrepreneurs on the front lines today are self-sprung.” Many, Triff believes, are “self incubating.”

As we close 2011 and move rapidly into 2012, the Development Marketplace we will continue to provide blended approaches to capital and capacity to support the people who are successful at staying in this field. With this in mind, it will be interesting to see how our field will evolve.

This post originally appeared in the Development Marketplace blog. Read full post here.

Image courtesy: Development Marketplace blog.

 

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