What Motivates the Best Social Entrepreneurs?

by Dennis Shaughnessy

Let’s con­sider the ques­tion of what is the right or best kind of moti­va­tion for the rapidly grow­ing class of social entre­pre­neurs.  It’s a hot area, with a lot of new entrants, and not much in the way of rules and guidelines.

We’ll start with a work­ing def­i­n­i­tion of social enter­prise, the space in which social entre­pre­neurs oper­ate.  A social enter­prise, or at least a good one, is a ven­ture that effi­ciently and sus­tain­ably pur­sues social impact (solv­ing a social prob­lem) as its mis­sion.  Profit and income is just fine for social enter­prises, so long as profit isn’t chased at the expense of social mis­sion, and that profit as a means to an end doesn’t exploit those who are the intended ben­e­fi­cia­ries of the enter­prise (in other words and most often, poor peo­ple). It is irrel­e­vant whether the enter­prise is for profit, not for profit or a com­bi­na­tion of each (a so-called hybrid) – what mat­ters is that it’s a sus­tain­able and effi­cient way to solve real prob­lems in part­ner­ship with real people.

Here are some prin­ci­ples that moti­vate social entre­pre­neurs with a focus on social entre­pre­neurs in the mar­ket or “ver­ti­cal” for solu­tions to poverty alle­vi­a­tion, espe­cially in devel­op­ing coun­tries and dis­ad­van­taged communities. 

1.  More than good intentions

Good inten­tions are cer­tainly enough for a phil­an­thropist, when the act of giv­ing is the cen­tral act.  Good inten­tions are not enough for a social entre­pre­neur.  To adapt a phrase, the path to a failed char­ity or social enter­prise is paved with good inten­tions.  Oprah Win­frey has an almost lim­it­less sup­ply of gen­uinely good inten­tions, and yet her school for young dis­ad­van­taged girls in South Africa paid a high price with waste, mis­man­age­ment and scan­dal.  On the other hand, the found­ing team of TSiBA South Africa have devel­oped a lit­tle known but high impact free col­lege for very poor blacks and col­oreds with great promise using Man­dela rather than Oprah as their guide for cre­at­ing afford­able world class edu­ca­tion for all.

2.  Look out­ward, not inward, for motivation

Some social entre­pre­neurs try to solve their own prob­lems, or set their own life on a bet­ter course, or fill a hole in their life, by try­ing to solve the prob­lems of oth­ers.  If the moti­va­tion is to make your life seem bet­ter or richer by inter­ven­ing in the lives of oth­ers, it may not be the best for the oth­ers.  Real solu­tions require much more than self-centered altru­ism.  Pick a high pro­file celebrity spend­ing a few days in an African refugee camp, and you’re likely to see this con­di­tion.  The alter­na­tive:  Dr. Muham­mad Yunus for­merly of Grameen Bank, who worked with the poor­est of the poor women in rural Bangladesh to build a global bank­ing pow­er­house, owned and led by those very same women.  His many fol­low­ers have built thriv­ing micro­fi­nance banks around the world that serve the poor first, and other inter­ests like share­hold­ers or gov­ern­ments only with what may be left over.

3.  Effi­cient com­pas­sion is the best kind

It’s admirable to care about the suf­fer­ing of oth­ers, but it’s only the first step in build­ing a suc­cess­ful social enter­prise.  You can’t teach car­ing, but car­ing is a given in this mar­ket.  A com­mit­ment to build­ing a sus­tain­able enter­prise that effi­ciently uses lim­ited finan­cial and other resources, includ­ing those pro­vided through the gen­eros­ity of oth­ers, is at the core of a real social entre­pre­neur.   There are far too many lux­ury SUVs filled with well paid con­sul­tants and Ivy League interns.  Con­sider John Wood of Room to Read, a for­mer Microsoft exec­u­tive, for an exam­ple of a highly effi­cient and pas­sion­ately car­ing social entre­pre­neur.  The same for the late Dr. Venkataswamy of Aravind Eye Care who built a “pay if you can” sur­gi­cal hos­pi­tal for the blind in India that remains a global model for effi­cient com­pas­sion  in state-of-the art health care.

4.  Lis­ten­ing to voices other than your own

So many self-proclaimed social entre­pre­neurs start with their own solu­tion to the prob­lem as they see it from their place in the world.  The more effec­tive approach is based on lis­ten­ing to those who expe­ri­ence the prob­lem and know more about the solu­tion from liv­ing the prob­lem.  Blake Mycoskie has done admirable work at TOMS Shoes, but his reformed busi­ness prac­tices sug­gest he’s rec­og­nized that the answers came from those who you serve, not from your own image of how they should be served.  Warby Parker and its eye­glass busi­ness (founded by Whar­ton MBAs)  is a new and improved ver­sion of TOMS, empow­er­ing micro-entrepreneurs in the devel­op­ing world while sell­ing afford­able glasses here.

5.  Beware of brand­ing at some­one else’s expense

Within celebrity cul­ture, we often see stars try to build their brand by “doing good.”  When it’s more about brand than last­ing solu­tions to real prob­lems, then watch out.  Again, con­sider where the line is between char­ity and brand build­ing at Oprah’s (Harpo) enter­prises, or Bono’s cloth­ing busi­ness.  On the other hand, we see Matt Damon’s work with devel­op­ing afford­able and acces­si­ble clean water resources in the devel­op­ing world being done in part­ner­ship with com­mit­ted pro­fes­sion­als and for the long haul.

6.  Bottom-up solu­tions, not top-down

Solu­tions are best designed and imple­mented from the bottom-up not the top-down, mean­ing from community-based busi­ness plans and oper­a­tions man­age­ment.  No one has done this bet­ter than Part­ners in Health under the early lead­er­ship of its inspi­ra­tional founder, Dr. Paul Farmer.  He built capac­ity in Haiti to treat HIV/AIDS and other dis­eases of the poor among Haitians, to avoid the “fly in” model used to bring rich world doc­tors to poor communities. 

7.  Results mat­ter, not mis­sion or programs

We can only fix the things we mea­sure.  Esther Duflo at MIT’s Jameel Poverty Action Lab and Dean Kar­lan at Yale’s Inno­va­tions for Poverty Action have both com­mit­ted their devel­op­ment eco­nom­ics work to find­ing ways to actu­ally mea­sure what works and what doesn’t work to reduce poverty.  There’s lit­tle glam­our in mea­sur­ing and study­ing pro­grams, such as in devel­op­ing ran­dom­ized con­trol tri­als for poverty work that mimic those for drug test­ing.  But, pas­sion for find­ing the best ways to really help the poor help them­selves rep­re­sents the next step in the devel­op­ment of social enterprises.

8.  There’s plenty of room for gen­uinely new ideas

We’re find­ing that there remains lots of room for entirely new ideas in social enter­prise, espe­cially in the eco­nomic devel­op­ment field.  Willie Foote founded Root Cap­i­tal to fill the “miss­ing mid­dle” of agri­cul­tural finance to address rural poverty.  Too big for micro­fi­nance but too small for com­mer­cial bank­ing, Root Cap­i­tal fills the gap with large loans to coop­er­a­tives made up of poor farm­ers that allow them to achieve the qual­ity nec­es­sary to sell into global com­mod­ity mar­kets.  Sim­i­larly, Andrew Youn cre­ated The One Acre Fund to help poor rural farm­ers improve their pro­duc­tiv­ity and access to mar­kets, thus chang­ing the lives of poor farm­ers for­ever in East Africa. 

9.  Draw­ing the line between good and evil

With the great suc­cess of micro­fi­nance came a few who would use the model cre­ated by Dr. Yunus to exploit rather than empower the poor.  The founders of Banco Com­par­ta­mos of Mex­ico City and SKS Micro­fi­nance of India can defend them­selves, but with 100% inter­est rates charged to the poor just because you can, and col­lec­tion meth­ods that led some bor­row­ers to com­mit sui­cide rather than suf­fer the shame of default, it’s clear that a line between com­pas­sion­ate cap­i­tal­ism and greed and exploita­tion can and must be drawn.

10.  Giv­ing back is the new new thing

Bill and Melinda Gates of The Gates Foun­da­tion have “bet the house” on solv­ing the biggest prob­lems of the world, from edu­ca­tion to sus­tain­able farm­ing to afford­able med­i­cine.  But per­haps even more impor­tant, they have led oth­ers to do the same, through their “billionaire’s giv­ing pledge” cam­paign.  Some of the wealth­i­est peo­ple in the world like War­ren Buf­fett and Mark Zucker­berg of Face­book have promised to give away at least half of what they have to efforts to solve the big prob­lems.  While we all can’t be bil­lion­aires, we all can fol­low their lead and be sim­i­larly gen­er­ous in dol­lars, time, out­look and spirit. 

So, cheers to the new gen­er­a­tion of social entre­pre­neurs and social enter­prise lead­ers who are doing it right.  They are role mod­els for young peo­ple around the world who are study­ing hard and hop­ing to find a clear path to a new more com­pas­sion­ate and inclu­sive way of doing business.