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    Essential Information on an Essential Issue

    Letter No.147

    27 June, 2001

    Social Entrepreneurs

  • Innovations and Social Change
  • NZ Government to Invest in Social Entrepreneurs
  • Defining Social Entrepreneurs
  • The Ashoka Story
  • The Life Cycle of Social Entrepreneurs
  • Social Entrepreneurs in Britain
  • The Network in Australia and New Zealand
  • COMMACT Conference on Social Entrepreneurs
  • Supporting Social Entrepreneurs
  • Social Venture Philanthropy
  • Enterprise and the Public Service
  • Florence Nightingale and The Jobs Letter
  • Voices
  • Demos on Social Entrepreneurs
  • Practical People Noble Causes
  • Resources

    SOCIAL ENTREPRENEURS ARE innovators who pioneer new solutions to social problems — and in doing so change the patterns of society. Like business entrepreneurs, they combine creativity with pragmatic skills to bring new ideas and services into reality. Like community activists, they have the determination to pursue their vision for social change relentlessly until it becomes a reality society-wide.

    While the term "social entrepreneur" is relatively new to New Zealand, it is certain to become a more common term to describe the contribution of the dozens of New Zealanders who are developing innovative solutions to our social challenges.

  • At the last Budget announcements, Social Services and Employment Minister Steve Maharey announced a scheme for supporting NZ social entrepreneurs as part of his overall strategy for fostering "pathways to opportunities". His scheme will identify 15-20 "movers and shakers" in the community sector each year, and give them the opportunity to take time out from their work to develop their skills and capabilities.

    In many ways, the announcement of this scheme reflects the popular interest in fostering social entrepreneurs by "Third Way" Labour politicians throughout the western world. Support for these social "change-makers", and the programmes and institutions they create, certainly gained momentum under Tony Blair's British government during the late 1990s. And they have backed their interest with real resources: last year, the UK Millenium Commission allocated a £100 million endowment fund to a new foundation especially set up to foster social entrepreneurship.

  • This political interest and support has been driven by the need for governments to find fresh answers to the welfare challenges of this 21st century. Charles Leadbeater, an associate of Tony Blair's favourite think-tank, Demos, argues that the present welfare state is ill-equipped to deal with many of the modern social problems it has to address. And the state seems unable to pursue radical reforms which could make welfare more affordable and more effective.

    Leadbeater: "At the risk of caricaturing its complex beginnings, the welfare state was designed for a post-war world of full employment, stable families and low female employment. Those underpinnings have been destroyed by international competition and social change. New social problems of single parent households, drug dependency and long-term unemployment have emerged which the traditional welfare system is not designed to deal with."

    "If we are to develop a more effective and affordable problem-solving welfare system we have to support social innovation. And one of the best ways to do that is to support the work of social entrepreneurs both within and outside the public sector..."

    The title of "social entrepreneur" may be new, but these people have always been with us, even if we did not call them by such a label.

    While the concept is gaining popularity, the title has already started to mean different things to different people. Some people, like Charles Leadbeater, use the term to primarily focus on the fostering of innovation and social change. Others use the term to describe anyone who starts a community-based not-for-profit organisation. Still others associate it exclusively with not-for-profit organisations starting for-profit business ventures. The term has also been used to refer to business leaders who integrate social responsibility into their organisations.

    Perhaps we can expect to see a continuing debate on definitions, especially as the concept starts to attract more attention from politicians and leading philanthropic foundations. Community activists, social service providers and government fieldworkers will be quick to appropriate the new terminology in order to raise the profile of their projects for potential funders.

    Many community-based social entrepreneurs, when asked to define the term, point to inspirational historical figures as diverse as the Indian Emperor Ashoka, Martin Luther King, Fritz Schumacher, or Florence Nightingale (see box, below).

    But this can overshadow the everyday reality that most communities and many government agencies have a social entrepreneur in their midst — people who are not often fully recognised and appreciated for the unique mixture of skills they bring to establishing new social programmes.

  • Father Nic Frances, Executive Director of the Brotherhood of St. Laurence in Melbourne, remembers the time he was first called a "social entrepreneur" ... on a radio program six years ago.

    Frances: "The minute I heard the phrase I liked it, and thought it described me. It suddenly encapsulated my training in business, my experience as a hotel and marketing manager and stockbroker, my work as a founder of a welfare organisation, and my journey through ordination to become an Anglican priest. At the time I was trying to use all these skills and all of my learning to draw in as many people as possible to respond to the social injustice I saw around me."

    "Six years after hearing that term "social entrepreneur", I now think there is very little new about it. It is almost what we called in the 1970s and early 80s "bloody good community work" with the added difference that it is not just about us as welfare workers going into a poor community and supporting it ... it is being in that community and harnessing the input of every one in sight — local government, business, statutory authorities, neighbours — anyone with an interest in tackling poverty."

  • Beyond the debate on precise definitions, the growing body of literature on social entrepreneurship shows a remarkable agreement about the qualities and character of these unusual individuals:
    — They are one of the most important sources of social innovation, creating new welfare services and new ways of delivering existing services.

    — They create role models that will be a "pattern for change" elsewhere in society.

    — They can be found right across society — in the traditional public sector, in some large private sector corporations, and at the most innovative edges of the voluntary and community sector.

    — They excel at spotting unmet needs and mobilising under-utilised resources — people, buildings, equipment — to meet these needs.

    — They are capable of creating impressive schemes with virtually no resources.

    — They are adept at building networks and generating practical good will.

    — They thrive on the complexity which more static organisations find difficult to handle.

    — They are determined, ambitious leaders, with great skills in communicating a mission and inspiring staff, users and partners.

    — They often find ways of combining approaches to social challenges that are traditionally kept separate.

    — They often create flat and flexible organisations, with a culture of creativity and a core of full-time paid staff.

    — Their projects are capable of producing a huge diversity of financial, human and organisational "outcomes" ... many of which were unanticipated when they started.

  • Bill Drayton, founder of the Ashoka Fellows, says that identifying and solving large-scale social problems requires a social entrepreneur because only the entrepreneur has the committed vision and inexhaustible determination to persist until they have transformed an entire system.

    Drayton: "The scholar comes to rest when he expresses an idea. The professional succeeds when she solves a client's problem. The manager calls it quits when he has enabled his organization to succeed. Social entrepreneurs go beyond the immediate problem to fundamentally change the system, spreading the solution and ultimately persuading entire societies to take new leaps."

  • Who was Ashoka?

    Bill Drayton has been one of the earliest pioneers in the field of fostering social entrepreneurship. In the early 1980s, he was a McKinsey & Co. consultant and assistant administrator at the US Environmental Protection Agency, when he started to fully recognize the power of individual innovation in addressing social problems. This led him to pilot the idea of Ashoka in India, with a budget of less than $50,000. His efforts attracted a MacArthur Fellowship, which enabled him to work full-time on building the new organisation.

    Rather than raising money for aid programmes, Ashoka focuses on identifying social entrepreneurs who are already working for change. It has a multi-level process for selecting the Fellows, involving nominators, researchers, interviewers, visits to work sites and reviews by professionals from each country. This process has seen Ashoka elect over 1,100 Fellows in 41 countries, and today it "invests" more than $7 million a year in supporting these change-makers. Almost all of Ashoka's internal organisational work is done by volunteers. Ashoka does not accept government funding, but raises its grant money from private individuals and philanthropic foundations.

    The Fellows are active in education, health, housing, economic development, the environment, and human rights ... mostly in the less-industrialised world and in Eastern Europe. Once selected, Ashoka elects the individual to the Fellowship for life and provides a subsistence income for an average period of three years. The living stipends range from $2,500 to $20,000 a year, and enable the social entrepreneurs to focus full-time on their ideas and projects.

    This financial support, given at the right time, can be critical to the process of innovation. As Louis Harris, founder of the US Harris Poll and an Ashoka supporter, says: "Change happens because a few people think differently and then take action. I back Ashoka, because it backs the courageous few, and it does so when these people are taking their biggest risk. That's when a small investment in launching a new way of teaching kids, or a new environmental solution, can truly change how society works..."

  • Bill Drayton observes that the past two decades have seen an extraordinary explosion of entrepreneurship and competition in the social sector. Drayton: "The social sector has discovered what the business sector learned from the railroad, the stock market and today's digital revolution: That nothing is as powerful as a big new idea — if it is in the hands of a first class entrepreneur."

    "Each such entrepreneur and idea that succeeds, moreover, encourages many others to care for society's wellbeing and to champion changes they feel are needed. The multiplication of such decentralized concern and effective action is, of course, the essence of the democratic revolution..."

    Stage One Stage Two Stage Three Stage Four
    Apprenticeship Launch Take-off Maturity
  • acquire skills and experience
  • learn the field, problems, players and existing approaches
  • conceive of, investigate, and flesh out new ideas
  • devote 100% of energy to implementing new ideas
  • create motivational base of operations
  • test and refine role model programmes
  • attract support
  • spread ideas to regional and national levels
  • consolidate institution and funding
  • ideas are recognised and respected
  • innovations are widely accepted as a new pattern in society
  • social entrepreneur is recognised as a change-maker in their field
  • social entrepreneur may start other innovations and/or play a broader leadership role in society
  • duration
    10+ years
    3-5 years
    5-15 years
    Source: Ashoka: Innovators for the Public

    The surge of interest in social entrepreneurship in Britain came with the election of the Labour government in 1997, and the publication of a Demos think-tank report (see review) which profiled several leading British change-makers. Three of the pioneering Londoners in this report included Andrew Mawson, Adele Blakebrough, and Helen Taylor Thompson.

    — At Bromley-by-Bow in East London, Andrew Mawson had inherited a derelict Church and transformed it during the last 15 years into a remarkable integrated community project bringing together art and craft studios, a nursery, community care, youth and enterprise activities, fitness facilities, a cafe, a Bengali language programme, a three-acre park, sheltered housing and a full range of health services.

    — At Kingston-upon-Thames, in south-west London, Adele Blakebrough was Director of the Kaleidoscope Project, one of Britain's largest centres for the treatment and support of heroin abusers.

    — Helen Taylor Thompson had taken over an unwanted NHS hospital at Hackney in East London and turned it into a pioneering, world-class hospice for AIDS patients.

  • In April 1998, these three social entrepreneurs established the Community Action Network (or CAN) as a learning and support network for fellow social entrepreneurs. It has rapidly grown to become a role model in the field.

    CAN's essential function has been to link its members via an electronic intranet, supported by face-to-face meetings. Through this electronic linkage, CAN members create their own marketplace to trade information, contacts, services and goods.

    CAN has also been establishing Action Centres which provide inexpensive office space and shared resources for social entrepreneurs and their organisations. The first has been set up in the Haymarket area of London, and others are now being planned in Scotland, Wales, North England and Northern Ireland.

    — for more information contact

  • More recently, a major new Foundation has been established in Britain to co-ordinate funding and support for social entrepreneurs. The unLTD Foundation is based on a partnership between CAN and Ashoka (UK) Trust, as well as Changemakers, Comic Relief, the Scarman Trust, the School for Social Entrepreneurs and the Social Entrepreneurs Network in Scotland.

    The new Foundation has successfully won the bid to take over a £100 million pound endowment fund from the UK Millenium Commission. unLTD has developed a three-level strategy to "staircase" the funding of social entrepreneurship throughout Britain.

    Level one involves giving as many people as possible the chance to do something for their community with the support of cash, training, advice and mentoring. Funding up to £2,500 is available.

    The second level is for projects involving full time employment on ideas that develop from level one. Funding provided for this is up to £15,000.

    The third level of projects will be supported by a Social Venture Fund which will finance major initiatives to an early stage of development. unLTD will also act as a broker between other private investors and the social entrepreneurs.

    — For more information, see

    The success of CAN in Britain has attracted a great deal of interest in Australia, especially after Australian Labour MP Mark Latham invited Andrew Mawson on a three-week speaking tour in April last year.

    This led to the launch of a two-year project, backed by the Brotherhood of St Laurence and the Melbourne-based Hotham Mission, to spark the development of Australian social enterprises, and to establish an Australian network of social entrepreneurs (modelled on CAN).

    The inaugural meeting of the Australian Social Entrepreneurs Network (SEN) was held in Sydney in February this year. This conference was attended by over 500 people which included leaders from the public and private sectors as well as politicians. A follow-up conference is being held in Brisbane at the end of June.

    — For more information on SEN, contact Vern Hughes email or website

  • Several NZ members of Commact, the Commonwealth community economic development association, have attended these inaugural meetings of SEN. Commact has also been commissioned by the Community Employment Group (CEG) to hold a series of meetings around NZ to report on the Australian initiatives, and to stimulate local discussions on the concepts of social entrepreneurship. Commact and CEG are following this up with a national conference in Wellington in November, with speakers from the UK, USA and Australia.

    — Conference on Social Entrepreneurs hosted by CEG in partnership with COMMACT Aotearoa, Wellington 22-23 November 2001. For further information and registration details contact CEG at P O Box 3705 Wellington, phone 04-914-4900, fax 04-914-4901, email or visit the CEG website. A registration form is available from the website

    These support networks may be coming at just the right time. A New Economics Foundation report (see review) in 1997 concluded that while social entrepreneurs are more widely recognised as catalysts for innovation, their work is still often done in the face of frustration and isolation.

    The report identified several key elements of assistance that social entrepreneurs require:

    — recognition and status ... not merely for the individual's self-gratification, but as a means of levering support for their initiatives.

    — personal financial support ... to enable them to pursue their central vision.

    — peer group support ... with other social entrepreneurs to share projects, experiences and ideas.

    — mentoring ... from individuals with practical experience relevant to their immediate and long-term strategic needs

    — specific training ... particularly in areas such as organisation development and finance.

    A growing trend in supporting social entrepreneurship can be found within a new generation of "venture" philanthropists who want to see a better strategic use made of their donations and grants. Rather than simply pouring money into the holes opening up in our welfare state, many corporate and private foundations are now seeking to have a greater impact on social problems by directly funding the social entrepreneurs identified as driving change and innovation.

    One of the main reasons behind this change of focus amongst philanthropists is the huge proliferation of citizens groups around the world in the last two decades.

    David Bornstein, author of a forthcoming book on social entrepreneurship, says that as many as a million new organizations have been established around the world since the 1970s to focus on issues such as the environment, human rights, health care, education, disability, democracy, women's rights, and poverty. This explosion has not been matched by an equal growth in philanthropic backing: in the United States, while the number of nonprofit organizations has grown by 55% since 1987, philanthropic giving has grown by just 15%.

    Bornstein: "With new organizations outpacing resources, governments, foundations, and private citizens have to be judicious about allocating their support. Not every investment will yield a worthwhile social "return." The whole venture industry is grounded in the twin assumptions that: 1) it is possible to identify sources of great potential, even in very young businesses; and 2) there is simply no more powerful way to invest money than to place it in the hands of an entrepreneur with a good idea. These insights are beginning to invade the social arena..."

    "Of the million new organizations in the world, which ones will succeed in changing systems and bringing real improvements to large numbers of people? The best guide is to look for the social entrepreneurs behind them — to systematically search for the restless, tenacious individuals who have a broad vision for social change and who simply will not give up until they have built it."

    Charles Leadbeater believes that the public service is just as much in need of fostering the spirit of enterprise, and can learn a great deal from the innovations of social entrepreneurs. But creating an environment where civil servants themselves think "outside the square" — and learn to take risks — is the first major hurdle to address.

    Leadbeater says that traditional methods of holding public servants to account for how they spend public money stress the virtues of predictability and standardisation. A fair and honest public service depends upon people following rules, not bending them.

    Equally, the public sector does not reward success. Public service innovators who find a cheaper way to deliver their services may find themselves rewarded with lower budgets or more work for the same pay.

    Leadbeater: "Political leaders have much lower tolerance levels for failure than their counterparts in business. Even the smallest mistakes in the public sector can be magnified into an embarrassment at least, a scandal at worst. It is little wonder then that innovation in the public sector lags so far behind the private sphere — the space for innovation is minimal, the costs of failure alarming, the incentives feeble, the personal rewards uncertain."

    In the past, Labour politicians have criticised the private sector for investing too little in research and development. Yet Leadbeater points out that the public sector would score very poorly on research and development, compared with most large private sector companies. He asks: "Where are the public sector's innovation centres, its business incubators, the science parks developing the public services of the future? "

    Leadbeater recommends:

    — the establishment of a string of new business incubators across the public sector;

    — the creation of a dedicated innovation and venture fund for the public sector;

    — all public sector budgets to include some provision for research and development;

    — the establishment of social innovation transfer schemes (where the innovations coming from community-based social entrepreneurs can be more easily identified and adopted).

    — Charles Leadbeater, "Sir Humphrey Needs Venture Capital" New Statesman 27th November 2000, available at


    "I think one's feelings waste themselves in words ... they ought all to be distilled into actions which bring results."
    — Florence Nightingale 1820-1910, English Nurse and reformer

    flornc3.jpg - 7717 Bytes ALTHOUGH SHE WORKED in a completely different field, Florence Nightingale was an inspiration behind the establishment of The Jobs Research Trust in 1994. Throughout modern history, this remarkable woman has been considered a role model for social entrepreneurs.

    Her fame as "the lady with the lamp" grew out of her compassionate care for British soldiers in Turkey during the Crimean War. The hygienic standards she introduced reduced the death rate in British military hospitals in Scutari from 42% to 2%.

    After her return to England she fought for the rest of her life to professionalise the field of nursing. She established standards for sanitation; introduced such innovations in hospitals as patient call lights, dumbwaiters, and hot and cold running water on every floor; and systematized the training of nurses.

    Nightingale wrote 150 books and monographs and 12,000 letters. She was also a "passionate statistician" and invented the pie chart. Through relentless lobbying efforts, and the skilful use of influential contacts, she got her ideas adopted first by the British Army and eventually by the medical establishment.

    The founding Jobs Research trustees felt that Florence Nightingale was a powerful example of how to work for positive change by distributing good and timely information. This has been a direct influence on the creation of The Jobs Letter, and also the inspiration behind our Trust philosophy of "...not telling people what to think, but giving people the tools to think with."

    Trustee Jo Howard writes: "By working like her, we in the Trust hope we will go some way, at least, to being as effective in our own field as she was in hers..."

    — For more information, see

    BILL DRAYTON NAMED the Ashoka organization after a 3rd Century B.C. Emperor of India, who is remembered as one of the world's earliest and most impactful social innovators. After uniting the Indian sub-continent by force, Emperor Ashoka was stricken with remorse and renounced violence.

    ashoka.jpg - 9966 BytesAshoka then dedicated the rest of his life to the peaceful promotion of social welfare, economic development, and tolerance for all religions. He instituted the region's first medical services, launched a vast well-digging program, and developed the first comprehensive infrastructure in southern Asia. He also planted thousands of shade trees along India's hot and dusty roads.

    — For more information, see

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