Social progress advocates can’t decide if it’s enterprise or entrepreneurship

Jeff Skoll, the successful entrepreneur at eBay and founder of the Skoll Foundation, celebrates the wisdom of the Dalai Lama at his forum in Oxford

OXFORD, England – Here at the Skoll World Forum for social entrepreneurship, there seems to be some confusion as to the meaning and relative transformative value of that last word – entrepreneurship.

Too many syllables may be part of the problem, perhaps. Whatever the case, it appears to be more than just a semantics argument.

This annual gathering of some thousand anti-poverty and pro-equity pioneers, innovators, activists and, frankly, very impressive and creative do-gooders put on by the Palo Alto, Calif.-based Skoll Foundation is definitely a global happening devoted to social justice and positive change in the world.

But what does not seem completely clear even to some of the participants is that this is not a festival simply to promote social enterprise – the ‘doing well by doing good’ notion that is all the rage these days.

Social enterprise, in case you had somehow avoided this phrase, generally (arguably, of course) means using commercial or business strategies to accomplish a social good or solve a social problem that has typically been the realm of government, charities or perhaps religious organizations.

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Here in the lovely old city that was used for shooting part of the Harry Potter movies, Bill Ackman, co-founder of a New York social investment organization called the Pershing Square Foundation, said the goal should be on how to best ‘push the capitalistic system’ to drive social progress.

“Philanthropic solutions to social problems are inherently problematic,” Ackman said at a Skoll session Wednesday called ‘Getting Beyond Business as Usual.’

“I think business is in a historic transition,” said Michael Porter, a Harvard business professor. “The awareness and commitment to social progress (within the business sector) is higher than anytime in my life. … But we are not getting the kind of progress we want.”

Another participant, Alexis Bonnell, who heads up ‘innovation’ (another over-used and now near-meaningless term) for the U.S. Agency for International Development, USAID, said what’s needed is for the traditional aid and development community to embrace a more business-like mindset.

“I’ve never seen an industry that functions as elitistly (sic?) as development,” Bonnell said.

Michael Green, philanthrocapitalist and director of Social Progress Index, moderates a forum

Michael Green, philanthrocapitalist and director of Social Progress Index, moderates a forum

“The social contract is broken,” said Marcela Manubens, head of social impact for the Anglo-Dutch consumer goods corporation Unilever. “We are privatizing many of the roles of the social contract traditionally handled by government in areas of human rights, water and sanitation …”

It wasn’t clear if Manubens thought this was good or bad, or just a fact.

At another Skoll session, on Thursday, focused on dealing with the massive problem of lack of access to water and sanitation across the world, all the participants talked about their efforts mostly in business lingo.

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“I think the sector has come a long way looking this as a market,” said Gary White, CEO of Water.org.

Eleanor Allen, CEO of Water for People, said as someone who came from the for-profit sector she feels NGOs (nongovernmental organizations) are often too inefficient. Water for People, it should be noted, is a nonprofit NGO.

“There is a lot of money looking for a home,” said Neil Jeffrey, CEO of Water and Sanitation for the Urban Poor (aka WASUP). Jeffrey was discussing how to find investors to help pay for getting water into the world’s growing urban slums.

I asked White after his talk if Water.org (Matt Damon’s humanitarian cause celebre) is basically advocating for the privatization of water and sanitation. Why aren’t these humanitarian organizations pushing for the cheapest, most equitable and most efficient means of delivering water that we mostly use in the U.S., Europe and other developed countries – a publicly run piped system?

“I’m agnostic on who’s managing the utility,” White said.

It would be best to have a single publicly funded water system, he said, but in reality the financial cost of creating piped water and sanitation systems today for all the billions of poor who need these services would be overwhelming – about $200 billion annually over five years, he said.

“And worldwide, we’re now only spending about $9 to $12 billion a year on this,” White said. So the only realistic way to deal with this problem, he said, will be through finding ways to bring in the for-profit sector.

Yet while many here at the Skoll forum seem to be banking on the private, for-profit sector to lead the way forward to a better world – through social enterprise – that is not at all the position of the Skoll Foundation. The profit-seekers can help, but they are not what interests the Skoll folks the most.

Renee Kaplan, chief of strategy at Skoll Foundation

Renee Kaplan, chief of strategy at Skoll Foundation

“People use the terms social enterprise and social entrepreneurship interchangeably,” said Renee Kaplan, chief strategy officer for the philanthropy. Skoll sees them as overlapping, but distinctly different. Social enterprises are either for-profit or a combination of for-profit and nonprofit, she said.

“The way we define social entrepreneurship means a majority of them are probably going to be nonprofits,” Kaplan said. The majority of social entrepreneurs are people or organizations that are finding new, creative ways to solve problems that the market – along with government and even other philanthropies or non-profits – have failed to solve.

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I asked Kaplan if it bugged the Skoll Foundation that many participants at their forum didn’t seem to know the difference – or are taking their event as opportunity to promote business as the savior when her organization isn’t really as interested in promoting social enterprise as it is in supporting truly entrepreneurial social reforms.

“It doesn’t bug us,” she laughed. “As the financial world is evolving, as these sectors integrate, more and more of these terms are going to become confused or blended. That’s probably a good thing.”

But it clearly did bug some at this confab.

Darren Walker, president of the Ford Foundation

Darren Walker, president of the Ford Foundation

“Look, I’m a capitalist,” said Darren Walker, president of the Ford Foundation. “But the problem here is that markets fail to address many of these problems.”

Philanthropies and nonprofits are investing in a larger, social benefit that may not return a profit to the investors, he said. The benefit accrues to all of humanity, Walker said, in terms of happy families, a healthy planet and less suffering.

“We have exalted the individual entrepreneur,” Walker said. The hero narrative needs to be replaced with a community benefit narrative, he said, and to stop bashing traditional philanthropy, governments or the institutions that are still doing much of the heavy lifting when it comes to fighting poverty and inequity.

“Philanthropy has led the way to set up a lot of these social enterprise opportunities,” said Bill Clapp, co-founder of the Seattle International Foundation (a funder of Humanosphere, I should note).

“Business is hardly a perfect solution for everything,” Clapp said. The social sector has been booming worldwide, he said, in part because of either growing recognition of the failure (or a growing failure) of the markets, government and other sectors to solve some of humanity’s most urgent problems.

“I think we’re a long ways off before we can just chuck philanthropy and these institutions who are supposed to show a financial return in favor of social enterprise,” Clapp said.

And even one leading member of the Skoll family of funded social progress initiatives, Pamela Hartigan, thinks the phrase ‘social entrepreneurship’ no longer works.

“It’s a problem,” she said at the forum Thursday. Hartigan, it should be noted, is the director of the Skoll Centre for Social Entrepreneurship here at the University of Oxford’s Said Business School – where the forum is taking place. (Editor’s note: See Hartigan’s clarification below.)

As she wrote for a post on Oxfam’s website in 2014, the phrase tends to deflect attention from what really needs to happen: A massive overhaul of capitalism itself.

“Yes, I still think that’s what’s needed,” Hartigan said Thursday.

Maybe it’s time to rename the forum?

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Tom Paulson

Tom Paulson is founder and lead journalist at Humanosphere. Prior to operating this online news site, he reported on science,  medicine, health policy, aid and development for the Seattle Post-Intelligencer. Contact him at tom[at]humanosphere.org or follow him on Twitter @tompaulson.

  • pamela hartigan

    Clarification — the article says that I think the term “entrepreneurship” no longer works. That is not the case. For me, it is adding the adjective “social” to “entrepreneurship” that needs to be rethought, as it continues to perpetrate the dichotomy between “this is where i just focus on making money and this is where I focus on doing good”. As I have said for a decade or more, ALL entrepreneurship needs to be “social entrepreneurship”, and all “social entrepreneurship” needs to seek financial sustainability, whether it is for profit (better said, perhaps, “not for loss”) or non-profit (which does not mean NO profit, by the way)
    Thanks
    Pamela Hartigan

    • Thanks for the clarification Pamela. I’ve corrected the post to say it is the phrase ‘social entrepreneurship’ which gives you pause. I do think the Skoll Fdn has a more precise and useful definition of what it means by the phrase. But many folks appear to still be confusing social enterprise (ie, a market and profit-making solution) with what the Skoll Foundation means by social entrepreneurship. And it is not a minor distinction, IMO

      • pamela hartigan

        For us at the Skoll Centre, we definitely include systems-changing market based solutions where profits are a means to an end to advance the social mission. And I agree that the term “social enterprise” does not usually encompass systems-changing — these entities frequently sub-contract with government to provide goods and services that government cannot or does not want to undertake. But they do nothing to change the systems that perpetuate the problem.. however, they can assuage people’s suffering.