Getting Money for Good Ideas
Business plan competitions are growing in popularity, with social entrepreneurship contests proving a particularly burgeoning niche. These reward businesses, run for profit, that also have some claim to furthering a noble cause or helping a community.
This year, the Yale School of Management teamed up with the Goldman Sachs Foundation to offer their first annual non-profit business plan competition, where four grand prizewinners were awarded $100,000 each to start or grow their businesses. Winners included:
- the El Puente community development center in El Paso, a group dedicated to empowering low-income Mexican immigrant women
- San Francisco-based CompuMentor, a company that helps non-profit organizations buy computer software at steep discounts;
- the beloved Guthrie Theater and Children's Theatre Company in Minneapolis, who partner with a costume rental company to help dress up school children and theater troupes across the country for cheap
- and the Rochester Rehabilitation Center in Rochester, N.Y., which partners with the Parret Paper company to allow rehab patients a chance at a meaningful work experience making gift tags and greeting cards.
The investment bank Goldman Sachs also sponsors the nation's best-known social venture contest, The National Social Ventures Competition. The four-year-old program reported a record number of participants from 40 top b-schools who submitted proposals for for-profit ventures.
Winners included Sarah Takesh (see Inc.'s September issue, page 94), and three others, including Ferrate Solutions, which developed a new water treatment chemical compound, potassium ferrate, designed to help people in poor countries treat contaminated water more effectively and at a lower cost; the Maine Highlands Guild, a company that helps rural Yankee artists and craftspeople increase their visibility and reduce operating costs in creating traditional goods; and Developing Power, which helps villages in the places like Asia and Africa build locally-sustainable, mini-grid energy systems.
More and more serious business students are getting involved in these programs -- one of the highest-profile competition winners in recent years emerged from the Harvard Business School; it made low-cost eyeglasses marketed to the world's poor. HBS's executive director of the Initiative on Social Enterprise, Stacey Childress, cites the growing popularity of a campus social enterprise club and record enrollment in an HBS course called "Entrepreneurship in the Social Sector" as signs of increasing interest in social issues in business.
Childress adds that she encourages students not to see social enterprise projects as the province of non-profits. "We consider the 'non-profit' label a vagary of the tax code," she says. "We encourage students to identify social problems and pursue them."
Harvard MBA Raj De Datta, whose team, Gyaana Ventures, won this year's Social Enterprise track competition at Harvard, says the team plans to spend its $20,000 prize battling illiteracy in a particularly indigent region in India. "The problem is acute there," he says. "It's an area where we feel like we can make an impact immediately." Whether they can make a profit doing so is debatable, but the proliferation of social venture competitions heightens the likelihood that that debate will come to some sort of conclusion.
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