Financial Innovation and the poor: Wary of corruption...

The Economist article titled "A Place in Society," described the recent push to

"yield a financial return alongside a social or environmental benefit."

This push comes for several reasons that we have discussed over the first half of the course. Though this idea sounds great, there have been issues with the funding of these endeavors. Chertok, Hamaoui and Jamison's article The Funding Gap, details some of these struggles. Though measuring the impact of a social mission undoubtedly causes some investors to shy away, I believe the fear of joint social/profit endeavors also takes a toll on social entrepreneurs pockets.

I came across an article in the NYTimes that started an intense conversation as to whether a profit seeking endeavor can stay true to a social cause. NyTimes "Fear of Profit" The comments that follow the article show the true conflicting feelings of many people regarding the answer to this question. Though the article was talking about micro-financing in particular, the comments listed are not different from any other discussion surrounding other subsets of social entrepreneurship.

Other than those who benefited from the Social Innovation Fund [pictured below], others have found difficulty "raising money to grow the social enterprise--$250,000 to $2 million or more."

I am sure that social enterprises will be more successful in fundraising as time progresses--but what will be the cause of that success? I think some of it will be due to people warming up to the idea of social enterprise/entrepreneurship and that will come from explicit measures of success. The methods outlined in Ted London's, "Making Better Investments at the Base of the Pyramid" as well as Geoff Mulgan's "Measuring Social Value" do a great job of outlining the difficulties, and also techniques to measure social value--which will definitely help social entrepreneurs attract funds.

However, even with all these tools and people becoming more accustomed to the idea of "profit with a purpose"--will social innovation stay clean? As I sat here writing I really wondered if the critics will be proven right in the end, or will this era of social innovation be full of progress and honesty. So that is my question, what will we be saying about social entrepreneurship 20 years from now? Great for all--or just like any other business?