Champions of change

Clustered mainly in the not-for-profit (NFP) space, a growing band of highly innovative, risk-taking problem solvers – collectively labelled social entrepreneurs – are making their mark.

Fired by the passion to effect social change, they are bringing new ideas and approaches to creating sustainable enterprises.

Growing levels of interest and interaction from the commercial business sector are also underlining their rise, as are their increasing levels of accumulated wealth and numbers of high-net-worth individuals and private foundations.

The first decade of the 21st century seems set to be recognised as the era that spawned the social entrepreneur.

Arguably, the best known Australian social entrepreneur is David Bussau, the former construction business chief who after years of for-profit venturing experienced the 'politics of enough' and created the highly successful and sustainable Opportunity International, an organisation that provides small start-up loans to people in developing countries to kick off their own ventures.

An early riser, Bussau took out the Ernst & Young Entrepreneur of the Year Award in 2003.

On the international front, it could be argued that Microsoft founders Bill and Melinda Gates are now social entrepreneurs through their foundation, endeavouring to find solutions to the seemingly intractable problems of health and education in Africa.

In Australia, a very long list is growing of individuals and enterprises tackling extremely complex social issues – from unemployment to homelessness, youth suicide and climate change – using an entrepreneurial approach rather than traditional handout charity.

Typically they are grappling with issues that governments and charities in the past have tried to fix, but whose attempts have sadly failed.

A worldwide debate is raging over what constitutes a social entrepreneur. Is it someone who simply creates an enterprise with the mission of doing good, creating social change and, ultimately, enables people to help themselves? Do the concerns of social entrepreneurs by definition have to be self-funding?

A founding father of social entrepreneurship, former McKinsey & Co. consultant Bill Drayton, who runs the US-based Ashoka Foundation, coined the term 'social entrepreneur' to describe individuals who combine the pragmatic, results-oriented methods of a business entrepreneur with the goals of a social reformer.

Social entrepreneurs worldwide have common characteristics. They are innovators who apply fresh thinking to what the academics these days term 'wicked problems'. That is, complex and very often constantly changing dilemmas that can seem entrenched and unfixable. They are relationship builders bringing together sometimes-unlikely groups of people in addressing the problem.

Social enterprises are sometimes self-funding, and sometimes not, although trends lean toward autonomy. Although most are not-for-profits, this is not always so.

One company, Easy Being Green, was started by serial social entrepreneur Nic Frances and former Greenpeace boss Paul Gilding with the aim of helping households, businesses and corporations reduce greenhouse gas emissions, and is a case in point.

Among the company's coups have been striking a deal with ANZ bank to offer FOC finance for Easy Being Green's fee with all new mortgages, and signing an ongoing agreement with Google in the US to provide green products and services to all its employees.

One thing is clear: the high-energy zeal and outside-the-square thinking of social entrepreneurs and their ventures are starting to teach traditional commercial enterprises a thing or two.

Within some of Australia's biggest corporates, wisdom is being gleaned from the highly effective methods of some social entrepreneurs.

The standouts, such as Macquarie Bank and AMP, are companies that have the means to interact via corporate philanthropy. Lessons are emerging largely through volunteering programs, where often quite senior employees are going into social enterprises and helping out pro bono.

Macquarie despatches willing, highly skilled and high-powered staff to help NFPs and social enterprises to take care of business.

According to Julie White, who heads the Macquarie Foundation, this may involve setting up an IT system, developing financial models or writing a business plan. Anecdotally, there are instances where they are getting out of it more than they put in. 'It helps that they are treated like gods when they get there,' White says. 'So there is a personal fillip.'

Professionally, however, they journey way beyond their comfort zones. 'What they see in not-for-profit environments are people who have to be not only the jacks but also the masters of all trades,' White says. 'People are coming up with solutions to difficult problems in a resource-poor sector. Interacting with them helps our people to look at their problems in a different way.'

Through a mentoring program at AMP, staff are also receiving exposure to the methods and thinking of social entrepreneurs, even seeking their know-how.

In one instance, Dr Arne Rubinstein, founder of the Byron Bay-based Pathways to Manhood, a social venture based on promoting boys-to-men rites of passage for teenagers, was invited to address senior executives on relationship building and leadership strategies and how to work together more effectively.

Expect more of this in the future, says Jan Owen, chief executive of Social Ventures Australia, a Sydney-based not-for-profit group started by ex-Macquarie banker Michael Traill to help other NFPs to develop business nous.

Owens believes commercial businesses have much to learn from social entrepreneurs. Leadership is just one area in which they are ahead of the pack. 'Social entrepreneurs have exceptional qualities because they are driven and deeply passionate about their work,' Owens says.

'They don't do it because they want to build an organisation to become a manager or leader, but because they want to create change; and with that unbridled passion comes the ability to motivate and bring others. Millions of dollars are being spent in training people in the commercial area to have the skills that social entrepreneurs naturally bring.'

Another skill exhibited by social entrepreneurs is the ability to design new solutions. Owen alludes to the ideas of Daniel Pink, author of A Whole New Mind, who points out that having been through the Knowledge Age we're rapidly moving into a Conceptual Age in which more inventive and empathetic thinking will be valued.

'There's a lot of talk now around what's called 'the whole-minded aptitude',' Owens explains. 'How do you look for the white space? What's the relationship between relationships? These are skills of not-for-profit people, particularly those who have been working in very difficult, crisis-driven situations. They have to develop complex problem-solving skills in the most unlikely situations, and they have the freedom and capacity to innovate.'

A classic example is the Beacon Foundation, now run by CEO Scott Harris but originally started 10 years ago by businessman Bill Lawson, who heads technical consultancy Sinclair Knight Merz in Tasmania. Lawson responded to a local high school's cry for help over the number of students leaving school after Year 10 and heading straight for the dole queue.

He gathered the students, their parents, teachers and local businesses in a program that involves a pledge-signing public commitment by the students to pursue further education, training or employment and coupled it with active support and involvement from local businesses.

More than providing role models, the businesses offer jobs and training opportunities. On the surface, it sounds highly idealistic, but it worked. In the first three-year program, unemployment dropped from 30 to 1 per cent. The program now runs in 85 schools across Australia.

Part of the reason Beacon is so successful, according to Harris, is its engagement of local businesses. 'They want to be involved in a solution rather than the quick fix of throwing money at the problem,' he says.

Furthermore, as skills and labour shortages grow critical, it's well in their interest, Harris points out. Rather than complaining about not being able to find good people to hire, they are actively involved in doing something about it.

It's in social entrepreneurs' capacity to engage with people and imbue them with purpose that Jane Schwager, CEO of Nonprofit Australia, sees an overlap with for-profit businesses.

As the corporate world has become more financially focused – 'about buying and selling money' – there's a quest for engagement and to find a level of satisfaction. It's social entrepreneurs' ability to really capture people's imaginations that has stirred the interest of traditional businesses in social enterprises.

Looking at the big picture, Schwager believes the sectors are moving closer together and, strangely, starting to look more like each other.

Not-for-profits started waking to the need for more business-like approaches to attract corporate dollars and the attention of the proliferating number of people with prescribed private funds (personal foundations). Schwager emphasises the salient statistic that 55 per cent of NFP funding these days is coming from fee-for-service or commercial activities.

At the same time as many NFPs had reality checks, commercial enterprises have been embracing or being forced to pay attention to issues of corporate social responsibility and sustainability. 'There's a move to factor in stakeholders and not just shareholders,' Schwager says.

Increasingly, young, ambitious and highly educated young people are asking in job interviews what level of community involvement big corporates can offer, says Macquarie's Julie White.

At the grassroots level, Harris, who has a close involvement with businesses through Beacon Foundation, has watched talented professionals 'vote with their feet' to move to an employer who also offers the chance to experience social enterprise in action as part of a job.

We may be witnessing the start of a revolution. Younger people who are making money fast and early in their careers, are looking for something significant, world-changing and self-perpetuating to do with their dollars and talents in the next life stage, White observes.

It's giving rise, it would seem, to what will be a next generation of social entrepreneurs.

Bill and Melinda Gates

Best known as the chairman and founder of Microsoft, Bill Gates funded the Bill & Melinda Gates Foundation (B&MGF), the largest transparently operated charitable foundation in the world, with an AUD$106m donation in 2000.

During the foundation's first two years, funding grew to AUD$2bn. The foundation aims to enhance healthcare and reduce extreme poverty globally, and in the US, to expand educational opportunities and access to IT. It has an endowment of approximately AUD$38.7bn.

In June 2006 Gates announced his plans to move out of his day-to-day role with Microsoft from mid-2008 in order to devote more time to working with the foundation.

Bill and Melinda Gates, along with the singer Bono, were named by Time magazine as Persons of the Year for 2005 for of their charitable work.

Paul Gilding, Easy Being Green

Paul Gilding is the CEO of Easy Being Green, an Australian company using carbon trading to drive mass consumer action on energy efficiency. He has spent more than 30 years working on sustainability issues as an activist, business leader and a commentator.

In 1992 Gilding became the international executive director of Greenpeace. And in 1995 he established Ecos Corporation, advising leading corporations – including DuPont, Ford, Anglo American, ANZ and IAG – on sustainability.

A member of the faculty of the Prince of Wales' Business and the Environment Program run by Cambridge University, Gilding writes regular newspaper columns, is chairman of the internet-based youth charity, The Inspire Foundation, is a director of the Australian Business Community Network, and is a member of the Foundation Council of the Australian Davos Connection.

Reference: June 2007, volume 77:05, p. 44-47

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