At Clinton Global Initiative, Social Entrepreneurs Weigh Tradeoffs
The sixth annual meeting of the Clinton Global Initiative—a convention of more than a thousand of the world's high-profile do-gooders—wrapped up recently. In President Bill Clinton's own words CGI is "showbiz for geeks" and throughout the three-day event executive directors, presidents, and CEOs took the spotlight as they made commitments of what they and their organizations will do to help make the world a better place.
Taken broadly, the content and keynote speakers of this year's CGI are a strong reflection of the growing excitement around "social entrepreneurship" as a promising new approach for solving the world's problems. For example, Kenyan entrepreneur David Kuria founded a company, Ecotact, to provide high-quality affordable public toilets in urban centers in Kenya. His goal was to improve childhood malnutrition through better sanitation, and his solution was the creation of an innovative business of "toilet malls" that combine sanitary facilities with other vendors, like shoe shine stalls and mobile phone providers. On the other end of the social entrepreneurship spectrum Leila Janah, founder of Samasource, built a highly entrepreneurial not-for-profit organization that uses technology and the Internet to connect rural, unemployed women in developing countries to well-paying menial tasks needed by large corporations, like data entry or translation.
Whether they run for-profit or non-profit organizations, what these impressive social entrepreneurs have in common is the application of their drive not toward profit maximization but toward the solving of a social problem. That said one of the key distinguishing traits of social entrepreneurs is the emphasis they place on financial sustainability. For all social entrepreneurs, for-profit or non-profit, this implies that the organization has a clearly articulated approach as to how it will generate ongoing income, whether through sales, contributions, or grants. For non-profit social entrepreneurs, this requires a financial model that is just as clear as the mission, and for for-profit social entrepreneurs profitability must be carefully balanced with social impact.
The inherent tension in this mission/money dynamic was abundantly clear in one of CGI's most charged sessions—a conversational debate between Muhammed Yunus, founder of Grameen Bank, and Vikram Akula, founder of SKS Microfinance, on the ethics of microfinance IPOs. Yunus, globally recognized as the father of microfinance, argued heatedly that "micro-credit" as he crafted and coined it was explicitly created to preserve the purity of social impact, with all profits and ownership being redirected to the poor. In contrast, Akula, a self-proclaimed disciple of Yunus, leveraged millions of dollars of outside investment in SKS to expand the organization's lending pool and reach more low-income women faster. Though he was able to accelerate the growth of SKS by as much as five times that experienced by Yunus' Grameen Bank, that rapid pace came with the caveat of foreign investors' earning profits on the portfolio of loans.
As CGI tries to attract global attention to a vision of large-scale social transformation, the social entrepreneurs among its membership demonstrate how existing infrastructure (markets, media, regulations, web, networks, etc.), can be deftly harnessed for social good. At the same time, even the glitz and glory of CGI itself starts to call into question where the line is drawn between the selfless and the selfish.
For social entrepreneurs money is understood as one of many critical tools needed to achieve large-scale and on-going impact, but the skeptics among us have to ask for what ends justify the means? And is this "new breed" of social entrepreneur a wolf in sheep's clothing or really a new type of changemaker who has discovered that the same tools can be used for so much more than personal gain?