There are recent and exciting stirrings worldwide for social innovation and impact.
In March 2012, Colombia launched a social innovation fund.
In April 2012, Hillary Clinton made the "global impact economy" a pillar of US foreign policy.
At the World Economic Forum, the Global Agenda Council on Social Innovation is creating a compounded guide to best practices that foster social innovation and impact. This project will examine tax policy, fiscal and legal incentives, financial intermediaries and guidance on changes to regulations in the charitable sector. This effort to compile a registry of all global best practices in the industry is absolutely necessary.
Having worked this summer as a Corporate Social Investment Fellow at Changing Our World, part of my work consisted of interviews with the Committee Encouraging Corporate Philanthropy (CECP). I became aware of an initiative called "The Global Guide to What Counts", which would try and identify what defines a non-profit worldwide. Though the US has a 501(c)3 designation and the UK a special charity registration, the ways in which these two types of organizations are defined in the legal code differs. The CECP Global Guide is an effort to bridge this gap in the West and all over the world.
My thinking for today's blog post is that as social innovation comes into its own and starts to gain a following from the public, private, and non-profit sectors, there will be an emerging need to find umbrellas to house all the new regulation and provide avenues for globally integrated learning between different administrations and stakeholders.
"Using such a compendium and other resources as tools to spark discussion and peer-to-peer exchange, the Members of the Council on Social Innovation believe that the time is ripe to develop a sustained engagement strategy with governments and serve as a trusted partner in their efforts to stimulate entrepreneurial solutions that create more inclusive societies"
My question to you this week: Is a standardization of the social innovation industry a facilitator or hindrance to future efforts in the space?
http://reports.weforum.org/global-agenda-council-2012/councils/social-innovation/
Using Money as a Leverage for Success in Social Entrepreneurship
ReplyDeleteThis article exemplifies the importance of government, namely U.S. government in utilizing social innovation as a tool for change, advancement and the sustainability of one of the U.S.’s must valuable exports, ideas. I find the recommendations for a new White House office on Social Innovation to be completely plausible and feasible as there already exists an office on Social Innovation in the Dept. of Education, where I interned this summer. Additionally, if the U.S. wants to have a competitive advantage over countries such as England, it is important that they create this office as soon as possible as they are already behind.
The key issue I like about this office is its ability to create sustainability for social enterprises. It is one thing to have a good idea, but it takes a lot more such as social capital/investment/ buy- in from investors in order to sustain the idea over the long haul. If the government finds that a social venture creates enough social good for society, but investors feel as though it is not as profitable, getting the sponsorship, endorsement and exposure from the government may be just what the social venture will need to kick off. This model ensures that, since profit plays an important role, social ventures will not be entirely profit-driven. Thus yielding greater benefit to society as a whole, especially to those from the lower economic spectrum in which the social venture may be very much tied to a social service or type of social welfare, such as a drug rehab center or alternative to placement in the juvenile system.
This article also ties in to the article and discussion on social bonds from class last week. The creation of social bonds in my opinion, does not hinder the ability of social enterprises to succeed, but rather aids them because since social ventures know that private investors are taking a risk on them and that the government will only back them if they know they will get a return, they will fight hard to win the endorsement from both venture capitalists as well as the government, knowing that they cannot afford to lose both ways due to ineffectiveness.
Furthermore, I am grateful that that this article touched upon a very important concept which was “measuring social impact.” This cannot be overstated, because the whole point of a social venture which claims to benefit society, is for it to be evidence based so its impact can be measured and tracked in order to ensure that it is doing exactly what it stated it will do. This is critical if these ventures seek to gain more funding and remain sustainable. This comes especially in a time when the government is beginning to create/require more models like this for non-profits which “claim” to improve the academic readiness and success of students. The government as a major funder for education and educational programs is doing this especially for afterschool programs who are given funding to improve school performance for students from under-resourced schools. The government (the Dept. of Ed) is now in the process of creating models which will only pay these social ventures money if they create results, and students actually excel in school. There are many benefits to the government carrying out this approach. For one thing it prevents the market from being oversaturated by people who are entering this business just to make money from the government, and not necessarily to help the kids. It also ensures that people will only go into this market if they know they can succeed in doing their stated objectives.
This also applies to social ventures alike. When social entrepreneurs know they will only get paid for their results it creates a more competitive market with better results which will also help create more innovative ways of ensuring success, efficiency and effectiveness. As money is a very scarce resource, the government should also use it to its best advantage in order to leverage and guarantee results.