A farewell to alms

It’s Saturday night at a Sydney leagues club, where sports fans knock back beers and families enjoy a cheap meal out. It’s all fairly casual, apart from the room behind the bar, where a group of expensively dressed lawyers and their friends, bid on art works and sporting memorabilia. These are people who look as if they’d be more comfortable in a two hat restaurant, rather than a neon lit pub.

But it’s all in a good cause. Committee Assist, the brainchild of lawyer John O’Reilly, exists to build an orphanage for a group of AIDS orphans O’Reilly met on a trip to Tanzania. To complete the task, he needs $170,000. By the way his friends and colleagues are bidding, it’s clear he won’t have a hard time getting it. After this orphanage is built, O’Reilly wants to help another group of stigmatised and sick children integrate into their community. And then another. It’s a big idea that will need more than colleagues opening their wallets for it to work. Fortunately, O’Reilly has a plan: fertiliser.

“I’m a shipping lawyer,” explains O’Reilly, “and that indirectly put me in touch with a guy who had invented an environmentally sensitive fertiliser.” O’Reilly helped the inventor get funding and is now working to commercialise the product. “The scientists advised me it was needed in Africa.”

Ultimately O’Reilly hopes the fertiliser will become enough of a commercial success that it can not only be sold cheaply in Africa, but also help fund new projects for AIDs orphans.

Welcome to the world of the social entrepreneurs, the people who are changing the world by a combination of professional skills, entrepreneurialism and innovation.

Doing good the business way

The moment the public became truly cynical about charity work was possibly the first time that peak hour commuters found themselves accosted by cheerful young collectors, paid good hourly rates plus commission to solicit money. This uncharitable suspicion has coincided with two other social trends: an emphasis on doing work that’s meaningful, and the ascendancy of market ideologies. The result is a group of confident, articulate, well-connected professionals and entrepreneurs who have come to believe the best way to solve problems is not through charitable or government intervention, but through using business tools to build networks and unleash creativity.

“I think a social entrepreneur is somebody who has got a strong vision around something they see that is often an intractable problem,” say Jan Owen, the Executive Director of Social Ventures Australia (SVA), an organisation dedicated to fostering the trend. SVA boasts a stellar lineup of business brains, including Chris Cuffe, former CEO of Colonial First State. On its website, SVA says it uses a venture capital model for ‘effective philanthropic investment’. Which sounds a lot like raising money for charity and using it wisely. Owen says it’s quite different.

“Normal charity work has been very focused on addressing the problem as they find it,” she says. “A good charity obviously meets someone at their hour of need and provides whatever they need to get through the situation.”

Social entrepreneurs, on the other hand, “try to look beyond that to the root cause of the problem, often not stepping in at the hour of need, but working back a few steps to find the cause. It’s often the community’s problem, not the individual’s problem.”

She gives the example of Peter Cox, CEO of Future Employment Opportunities. “He’s an amazing guy who worked in Bendigo and noticed there were a whole lot of men made redundant in the 1990s who were only in their 40s. As far as he was concerned, they were going to end up in poverty.”

According to Owen, Cox then started a recycling business using material rescued from the local tip. He employed 15 men “who got excited about recycling and saved something like four landfills full of rubbish” and ran the business as a non profit. All the money goes back into the business to employ more people. Today, the Eaglehawk Recycling Shop is a successful business and Cox has created a publication to help people in other communities create the same kind of enterprise.

“There is a strong business approach in a lot of businesses we work with,” says Owen. “We’re vigilant and vigorous about reporting. We’ve got support in the business community, because in the past, people have put money into something and had no idea where the money went. We have vigilance around it.”

Social entrepreneurs aren’t scared of intractable or politically sensitive problems, either. Kim McConville, CEO of Beyond Empathy, another social entrepreneurial organisation, created a program to convince pregnant indigenous women to take advantage of the health care that was available to them.

“There were a lot of young women having babies who never had access to health services,” explains Owen. “The services were there, but no young woman would go near the state-run hospital.”

McConville, whose organisation uses the arts to address regional hardships, created a program to combine art and pre-natal care.

“We came up with the idea of making plaster casts of the young women’s bellies, painting them and creating a visual arts exhibition,” McConville later wrote, admitting it was an approach that shocked the midwives. But not only did the young women enjoy the painting, but soon their mothers and grandmothers were involved, alongside midwives, nutritionists, dental health workers and other professionals.

“In that community, for the first time in 50 years, that group of women gave birth to normal weight babies,” said Owen.

The point was not that someone was taking an interest. Plenty of money had gone into local healthcare, but the people at whom it was aimed weren’t using it. McConville’s program, which cost about $30,000, worked to bring the community together. It’s this leveraging of relationships, this Internet-age comfort with connectivity, that’s another feature of social entrepreneurialism.

Becoming a movement

‘Social entrepreneurialism’ is a slippery phrase. For some, it means creating a system that lets people help themselves, often through using rigorous business templates and metrics. For others, it means building enterprises that can change society, while turning a profit. A for profit company researching alternative energies could be a social enterprise as much as McConville’s program.

The movement’s guru is Bill Drayton who founded the non-profit Ashoka in 1981, to “shape a global, entrepreneurial, competitive citizen sector: one that allows social entrepreneurs to thrive and enables the world’s citizens to think and act as changemakers”. Click on the Ashoka website and you’ll read a lot about ‘venture philanthropy’, which is defined – in a splendid piece of corporate speak – as “philanthropy which uses some of the best practices of the venture capital world, measuring the value of the donor dollar in terms of the social return of investment, to effectively build the capacity of citizen-sector organisations”.

But it took until the 1990s, when the fulfilment-demanding Generation X came to adulthood, for the concept to take off. By the middle of that decade, Harvard Business School was teaching social entrepreneurship. Columbia, Yale and others soon followed. Another milestone for the movement, if it can be called that, came in 2003 when Jeff Skoll, the former president of e-bay, backed the creation of the Skoll Center for Social Entrepreneurship at the Said Business School at Oxford University. Social entrepreneurialism had arrived as a serious business discipline.

Skoll himself is the very model of a social entrepreneur. Not content with having created e-bay, he founded the Skoll Foundation in 1999, which has funded enterprises like a nonprofit drug company and a nonprofit business to develop low-tech agricultural machinery. His online social network, participate.net cajoles film lovers into becoming activists, giving them the ability to send letters to Congress and compare car fuel efficiency. According to a New York Times report, Skoll’s also invested in Falcon Waterfree Technologies, maker of a waterless urinal whose aim is to both save water and reduce wastewater treatment.

Everything Skoll does fits the ideal model of a social entrepreneur. He’s putting relationships together, empowering people to take control of their own destiny, and helping to create sustainable (but potentially profitable) enterprises.

The charitable view

Social entrepreneurialism theoretically unleashes creativity while maximising both sustainability and, in the best of all possible worlds, profitability. But it’s a model that challenges age-old notions of philanthropy, and puts the for-profit sector in bed with purely charitable enterprises.

“I would be lying if I said the relationship is always positive,” Lee Davis has been quoted as saying on the Skoll Center’s website. Davis is one of the founders of NESsT (the Nonprofit Enterprise and Self-sustainability Team), a group of venture philanthropists. Like Social Ventures Australia, it recognises that non profit organisations are in competition for a limited number of resources and donations, which makes them vulnerable and potentially unsustainable. NESsT is now an international organised backed by foundations and individual philanthropists, whose role is to provide money and expertise to non-profit organisations. It also has a business consultancy arm.

“Some people in the non-profit sector have a very negative reaction to business involvement. Also, it is a misperception that business can automatically bring things to the non-profit sector,” he has also said.

Davis suggests that what social enterprise can do particularly well is offer business a way to engage with the non-profit field, through creating measureable results.

Underlying much of the social enterprise literature is a suspicion of big government solutions to social problems. Governments, nevertheless, are showing an interest in the concept, which is not surprising. Not only do individuals close to the problem usually have a better idea of how to solve it, but they often do so much more cheaply. The British government has been particularly keen to use social entrepreneurial ideas to help deliver improved social services. In June 2006 the UK Department of Health established a Social Enterprise Unit to encourage staff and patients to come together to design and deliver services in a more targeted way. An example is the Expert Patients program, established to help people manage long term or chronic conditions. A key component of the program is the use of course leaders who have suffered the condition themselves.

It’s hard not to become enthusiastic about social entrepreneurialism, but is it the answer to every social problem? In theory, brainstorming new ways of doing things sounds like a great idea, until the new ideas come smack up against the old barriers, as John O’Reilly discovered in Tanzania.

“The biggest thing you have to battle is corruption,” he says. “Once you’re somewhere like Africa, you’ve got to put in the systems to prevent that happening and it takes time to get to know the right people.”

Another problem is that communities suffering from intractable problems have themselves become cynical about the attempts of the well meaning to help them, whether those people are NGOs, charities or social entrepreneurs.

“So many of the people who come in don’t have a sustainable plan and the locals aren’t impressed,” continues O’Reilly. “The officials always want something for something, even if you’re trying to help their own people. You’ve got to be persistent and patient, because things go very slowly.”

There’s also the question of how much energy all those engaged and enthusiastic professionals will have left once they find themselves in it for the long haul. Some of them will undoubtedly find their new projects turning into old style charities, which have to spend a portion of every donated dollar on salaries and administrative costs.

“We’re already looking at the issue of retaining a bookkeeper because my sister is exhausted from doing it,” says O’Reilly’s brother Stephen, who is also part of Committee Assist. “There will come a point where we have to increase administrative expenses.” The difference, he says, is that “we want to get to a stage where the project is completely self sustainable”.

And whether the fertilizer project works or not, there are at least a group of orphans in sub-Saharan Africa who now have running water, beds and access to school.


This article first appeared in Fast Thinking magazine, in 2007.