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Meet the New Breed of Philanthropists Helping Social Entrepreneurs Succeed

Meet the New Breed of Philanthropists Helping Social Entrepreneurs Succeed
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The following excerpt is from Jason Haber's new book The Business of Good. Buy it now from Amazon | Barnes & Noble | iTunes | IndieBound

In The Business of Good, serial and social entrepreneur Jason Haber intertwines case studies and anecdotes that show how social entrepreneurship is creating jobs, growing the economy, and ultimately changing the world. In this edited excerpt, Haber profiles several outstanding Kickstarters who are changing the face of social enterprises.

Today there’s a new group of philanthropists who are redefining what it means to give. In fact, they aren’t really “giving” -- they’re Kickstarters of social enterprise who expect something in return.

More than check writing, Kickstarters provide social entrepreneurs with all the tools necessary for success. They are diverse organizations that engage in grant making, equity investing, forum organizing, and community connecting. They kickstart, incubate, and mentor the growing social enterprise community.

Let’s meet some of these Kickstarters.

Opening the Gates

In 1997, above a pizza shop in Redmond, Washington, a new foundation opened for business. Having made his fortune many times over, Bill Gates took his first baby step in social enterprise.

Today, armed with an endowment of more than $42 billion, the Gates Foundation is the most powerful social entrepreneurial and philanthropic force ever unleashed in human history. Over 70 percent of the nations on earth have GDPs less than $42 billion. The Gates Foundation has the kind of power once reserved for governments.

Its projects range from improving health care and education to ending poverty. The foundation doesn’t just make grants, either. In 2015, it took a $52 million equity stake in a vaccine manufacturer. But more important is the overall approach the foundation takes to problem solving. It looks at market-based solutions, it looks for enterprising ideas, and it looks at the financial benefits of positive outcomes. Bill and Melinda Gates are applying all they’ve learned at Microsoft to tackle the world’s toughest problems.

Melinda told a reporter back in the foundation’s earlier days: “One thing to understand about the foundation is that it’s a lot like Microsoft in the sense that we do expect results. We are going to measure things as we go along. We are going to make changes.” This is what differentiates the Gateses’ breed of philanthropist from past generations. It’s still nice to write a check, but Kickstarters don’t stop there.

It's like getting into Harvard, only tougher

Each year more than 3,000 people apply for 40 open slots. Despite the 1.3 percent admission rate, applicants spend hours working on their applications, which are due every November. Once submitted, the application will be reviewed three times by three different teams. From there the list is whittled down to 500 to 600 people. External evaluators are brought in, and a group of 80 finalists are then invited in for formal interviews. In June, the 40 fellows are announced. Those 40 people are now members of an exclusive club. They are Echoing Green Fellows.

Since 1987, Echoing Green has been trailblazing a path for social entrepreneurs. To date, this nonprofit has injected over $40 million into both nonprofit and for-profit ventures. Nearly 700 social entrepreneurs working in more than 60 countries have been kickstarted by Echoing Green. Notable ventures have come out of the fellowship, including Teach for America, Citizen Schools, One Acre Fund, SKS Microfinance, City Year, and College Summit.

The Echoing Green Fellowship lasts two years. Once aboard, a newly installed fellow works with a portfolio manager to create an individualized plan and establish goals. Fellows get help with fundraising, business building, operations planning, theory of change, and M&E (monitor and evaluation), and are reminded to stay passionate about their work.

Fellows receive $80,000 (or $90,000 if in a partnership) and $4,000 of health insurance reimbursements, which, it should be noted, goes a very long way in the developing world. They also tap into the vast ecosystem of fellows, advocates, practitioners, professionals, and supporters.

The legendary Bill Drayton

Since 1980, Bill Drayton has been the leader of Ashoka, the granddaddy of the Kickstarters. His involvement in social entrepreneurship goes back to before the term was popularized. In fact, he coined the term. He may not be a household name, but within the nonprofit community, he’s a legend.

Since 1981, when the Ashoka Fellows program launched, more than 3,000 social entrepreneurs have received mentoring, training, funding, and access to the ever-growing network of Ashoka fellows. Ashoka fellows are now in 63 countries, where their impacts are profound.

The organization has concentrated on eight areas for social change investment: climate change, energy and environment, transforming modern governance, empowering youth to be change makers, cultural and religious tolerance, innovative social financial solutions, women’s livelihood development, bringing disability into the mainstream, news, and knowledge.

Ashoka Fellow candidates undergo a rigorous screening process before they’re selected. They are evaluated against five criteria. First, the idea must be a “knockout.” Fellowships are offered only to those who have truly new ideas that will bring about change. Second, Ashoka is looking for creativity. The question they’re likely to pose is: Does this individual have a vision of how they can meet some human need better than it’s been met before? Third is the entrepreneurial quality. The candidate needs to have a fire-in-the-belly desire to be engrossed in this venture for the next decade and beyond. Fourth is the social impact of the idea. Ashoka wants ideas that scale up to be transformative. As a result, it wouldn’t consider a new health facility or school unless it had bigger aims to make broad change. Lastly, Ashoka probes the ethical fiber of each candidate. Only those they trust beyond question will gain entry into this incredible community.

Over the years, Ashoka and Drayton have received many accolades. They are all earned. But as Bill Drayton says: “Anyone can do this. However, you have to give yourself permission to see a problem and then to give yourself further permission and the time needed to find a solution.”

Dotcom kickstarters

Starting eBay and America Online changed commerce and connectivity. Now they seek to become change makers themselves by kickstarting a new generation of social entrepreneurs. For Jeff Skoll, Pierre Omidyar, and Steve Case, deploying their wealth to kickstart the energy, passion, and impact of social entrepreneurs is their new passion.

Jeff Skoll grew up in a middle class family in Canada. In college, he pumped gas to earn money. After graduate school and a few stints here and there, he met Pierre Omidyar, who had an idea for an online auction business. Skoll didn’t think much of it. But Omidyar continued to talk with Skoll about it, and he eventually joined eBay as its first president. Less than three years later, Skoll would be a billionaire several times over. Armed with those resources, he set about to achieve his vision: to live in a sustainable world of peace and prosperity.

To achieve that vision, Skoll has unleashed a triple threat of change: the Skoll Foundation, Participant Media, and the Skoll Global Threats Fund.

Since its launch in 1999, the Skoll Foundation has pursued large-scale change through making strategic investments and bringing together leading social entrepreneurs of the world. The foundation has invested an astounding $500 million into more than 100 different ventures on five continents. From clean-water projects in India to health care in Gambia and antiretroviral drugs in Haiti, Skoll has supported and invested in a large portfolio of social entrepreneurs.

The Skoll Foundation accepts nominations from its network of partners but doesn’t accept unsolicited nominations for its annual Skoll Awards. It seeks out disruptors who have ideas that can scale, who can collaborate within their ecosystem, and whose social mission is aligned with their vision. Investments are significant, with recipients receiving $1.25 million in funding, support growing their enterprise for three years, and membership to the global community of past and present Skoll Award recipients.

To combat threats that could endanger world stability, Skoll launched the Skoll Global Threat Fund to tackle climate change, water scarcity, pandemics, nuclear proliferation, and Middle East conflict.

In 2004, Skoll launched Participant Media and produced such films as Syriana; Good Night, and Good Luck; An Inconvenient Truth; Fast Food Nation; Charlie Wilson’s War; Darfur Now; and others. The films have been a tremendous success. They’ve not only made money but also created conversations that relate to Skoll’s vision on climate change, public health, and foreign policy.

And there’s the Skoll Centre for Social Entrepreneurship. Between the River Thames and Castle Mill Stream in Oxford, England, sits the Saïd Business School. Saïd is a newcomer in the sprawling institution that is Oxford, having been founded in the mid-1990s. Since November 2003, it’s been home to the Skoll Centre for Social Entrepreneurship. The Skoll Foundation endowed the program with a £4.4 million donation (over $5M in USD). Connecting the world of academia with the universe of social entrepreneurs, the Skoll Centre has become a dynamic hub of innovation and energy for the field. Every spring the Centre plays host to the Skoll World Forum, which has become the TED of social entrepreneurship.

Pierre Omidyar learned many business lessons when he built eBay into an e-commerce powerhouse. Taking those lessons to his own foundation, the Omidyar Network, Omidyar is once again rewriting all the rules. He refers to the foundation as a “philanthropic investment” firm.

“We need to change the way people think about business—to see that it’s not inherently evil but inherently good,” he told Matthew Bishop and Michael Green in their book Philanthrocapitalism. “My sense is that the social sector has acknowledged that, in the end, having a social impact is not the exclusive preserve of nonprofits. Whether you are nonprofit or for-profit, you need to be scalable, need to be sustainable, need to focus on customers and outcomes.”

To make that shift, Omidyar seeks market-based approaches to problem solving that have the ability to scale up. Investments in for-profit ventures are made through an LLC, and grants to nonprofits are made via a 501(c)(3). The Omidyar Network focuses on five sectors: consumer internet and mobile, education, financial inclusion, governance and citizen engagement, and property rights.

Omidyar has committed $810 million since the foundation’s 2004 inception. Forty-four percent of capital has been invested in for-profit ventures, while 56 percent has gone to nonprofits. “Regardless of the sector, we invest in organizations that have the potential to embody innovation, scale, and sustainability or help bring them about within their industry,” the Omidyar Network website says.

“Wealth,” Andrew Carnegie once wrote, “is not to feed our egos but to feed the hungry and to help people help themselves.” The Kickstarters are carrying on this tradition. They’ve changed philanthropy and along the way have been a liberating force for social entrepreneurs.