Whenever a person, community, or organization is in need, there is often a resource power dynamic at play. There might be someone or some institution with resources that could benefit those in need, but the donor and recipient might have different views on the best way to meet that need.
After last December’s tragedy in Newtown, Connecticut, people from around the world showed support to the community by donating teddy bears, toys, and an array of other items. Just a couple of months earlier, we saw a similar outpouring of material donations like blankets and canned goods from people who wanted to ease the suffering of those affected by Hurricane Sandy.
In both instances, the high volume of donations showed a strong charitable spirit, but the material donations often overtaxed the communities they intended to benefit. Newtown opened warehouses to store the goods, and volunteers from other towns came to help sort through everything that arrived. Local and national media published images and shared videos of just how many donations arrived in Newtown, sending a message expressing gratitude for the gifts, but requesting that donations stop. Websites of the American Red Cross and Federal Emergency Management Administration posted announcements asking that products not be donated, explaining that FEMA and many disaster relief organizations do not have the people, time, and money to distribute the donations. If people wanted to contribute, the communities preferred to receive money instead of material goods.
On the institutional giving side, the same tension exists between what the organization needs in terms of flexible money and what foundations or government can give. General operating support grants, which allow the grantee to decide the best use of the money, are often preferred to restricted grants, which fund specific programmatic areas.
It’s important to note that when someone sends a teddy bear to Newtown, a blanket to the Jersey Shore, or when an institution designates a grant for a specific purpose, the donor does so in order to show support or help. In fact, they might be acting strategically, knowing the type of change they want to affect, and giving the resource that will meet that goal.
As an attempt to break, or lower, the power dynamic between the donor and ultimate recipient, philanthropic organizations are experimenting with models that bypass an intermediary like the American Red Cross or another nonprofit and go straight to the community they want to help. Two months ago the Atlantic published an article about GiveDirectly , a nonprofit that collects donations online and gives cash directly to poor households in Kenya. The article walks through the benefits and challenges of cash donations with no strings attached, and what a future of direct philanthropy would mean to the nonprofits whose services might not be needed.
I’m struck by how frequently those of us working to create social change are faced with the opportunity to determine how our resources –be they time, knowledge, or money– go to those we want to assist. Recognizing that an inherent resource power dynamic exists is the first step. The second step is conferring with those whom you hope to help to find out what they need, and asking them the best way to make it happen. While you might have lots of free time, a unique piece of knowledge, or financial resource from which they could benefit, know that they have an intellectual resource that you probably don’t possess: an understanding of what life is like for them, and how their life could improve given your resources.
What are other examples of times when a community in need could have benefited from a resource that the donor did not know, or want, to give? And what are other organizations or policies that struggle with the tension of giving unrestricted cash instead of funding a specific intervention or program?
This summer, I had the good fortune of participating in the UnSectored Working Group focusing on refining UnSectored’s vision and mission. We reflected on the first six months of UnSectored and shared ideas about what it could look like in its second year.
After coffee shop, living room, and backyard conversations that brought us together to share our suggested edits to documents that Jeff was good enough to draft and redraft, we got to a clear articulation of what we do and our values. The task was not as simple as thinking about how to describe what we do. It became an ongoing discussion about what UnSectored should be.
For those of you new to this site, UnSectored is, “a community of people who believe that social change is the responsibility of all individuals, organizations and sectors. We work between and beyond sectors to collectively define progress and enact change.”
It’s understandable that this description might remind one of collective impact, defined by FSG as, “the commitment of a group of actors from different sectors to a common agenda for solving a complex social problem.” Both UnSectored and collective impact promote the importance of gathering people from different sectors and share an end goal of making change.
Despite this similarity, collective impact and UnSectored are not the same. Solely focusing on the cross-sectored nature of both ignores the important distinction that collective impact is an approach with a clearly defined goal, and UnSectored is a platform without an agenda.
This summer, the Working Group thought about whether or not to develop UnSectored into a community centered on a few issues that we believed were vitally important to improving the DC community. People from all sectors who shared our beliefs would join, and our group would see what we could do to help make change. While still different from collective impact in many ways, this route would have more closely resembled that approach.
Instead, we decided UnSectored could provide highest value as an on and offline platform for people with very different viewpoints to learn about one another’s perspectives (the trick, of course, is how to get people with very different viewpoints together). This might result in multiple actions that appear in direct contrast to one another, but a common end is not our goal.
When you read our final Working Group products (what we do and our values), you will find a description of a process and an articulation of basic principles that guide how we interact with one another. Is UnSectored a cool platform for exploring ways to achieve social change beyond the scope of just one sector? Yes. Is it a collective impact approach? No.
Beyond collective impact and UnSectored, what cross-sector approaches and platforms for social change do you use in your community? And how do you foster a welcoming environment for people with conflicting perspectives?
Over the past few months, it’s been great to see excitement building for a type of leader who works across sectors to build and improve the systems and infrastructure to solve social problems. In some of my previous UnSectored posts, I call this leader a social infrapreneur and argue that we need to define, recognize, and support social infrapreneurs.
In a Harvard Business Review blog this summer, Lara Galinsky, the senior vice president of Echoing Green, argues that “Not Everyone Should be a Social Entrepreneur”. She writes, “social entrepreneurs alone cannot change the world,” because they need people, “across all sectors to turn their groundbreaking ideas into reality.” Last month, Martin Montero pointed me towards the blog, Ethics for Doing Good, on which author Benny Callaghan wrote a fake job posting for a “Systems Diplomat,” noting, “The world is seeking a team of curious, creative and humble diplomats to navigate complexity, choreograph systems and facilitate collaboration.”
People are talking and writing about the need for leaders who reach across sectors and systems. But when you say sector and I say sector, do we mean the same thing? And does it even matter? At the last UnSectored Talk, “Cross-sector leadership for change,” I mentioned this to help set the stage for our conversation. Some people define different sectors based the whether the institution is a nonprofit, for-profit, or part of government. Others use the term sector to describe different issues areas, such as education, health, and housing. There’s the tech sector, the philanthropy sector, the manufacturing sector, the energy sector, and the impact investing sector. I could go on and on.
The point of this is not to settle on the correct definition of sector. “Sector” is a versatile word that can be used in different contexts with different people. But because of that, we need to have a level of awareness that my definition of sector in a conversation might be different from yours.
What unites all of our uses of the word sector is the understanding that we are talking about a part of a whole, a piece of a system, and therefore acknowledging there’s a world outside of the one in which we are operating, or beyond the few sectors among which we are aiming to build bridges. The use of “sector” inherently acknowledges there is something else out there—and that we need to work outside our own spheres to change the whole.
I’m curious, what do you usually mean when you use the word sector? And when you found the UnSectored community, what type of sectors did you imagine needed to work together or at least better understand one another to create social change?
After reading “Why Bill Gates, Warren Buffet, and Other Billionaires Should Be Wary of Impact Investing,” a blog post on Policy Mic, I wondered why a discussion about whether philanthropists should consider impact investing didn’t include a discussion about impact investing in philanthropy.
The blog post focused on why individual investors have reasons to be cautious about impact investing. However, these are Giving Pledge members who have pledged “to commit to giving the majority of their wealth to philanthropy.” In this context, shouldn’t we be thinking of them as philanthropists rather than as individual investors?
A recent Economist article cited Steve Case saying that impact investing was the hottest topic at the second Giving Pledge meeting. Aside from knowing that several attendees want to convene a follow-up conversation on the topic, we don’t know much of anything about the context in which impact investing was discussed. Since many of the 81 Giving Pledge members already have private foundations, it seems reasonable to assume that some of the conversation involves how to make impact investments through a foundation. With this assumption, let’s explore what impact investing could look like for Giving Pledge members who give through foundations and why this is so exciting.
First off, what exactly is meant by “impact investing?” The Economist article uses a broad definition, “how to invest money to make profits and do good at the same time.” We do not know whether the profits need to be market-rate, and whether doing good involves a measurable social and environmental return, or just applies a screen to ensure the investment will do no harm.
Without much information to go on, my guess is that the Giving Pledge members are discussing how a foundation can invest its non-grant dollars in a way that produces financial returns and advances its mission. It’s important to recognize that this does not necessarily mean that the foundation will have less money available for grants.
In fact, if a private foundation makes an investment that advances its mission and produces a market-rate return (known as a “mission-related investment” or MRI), the foundation cannot count those investment dollars spent on the investment towards the minimum 5% charitable payout (the grantmaking pool) that the foundation must spend each year. Instead, those dollars have to come from the foundation’s non-grantmaking pool of money (sometimes referred to as the “corpus” or “95%”). This means that the foundation has the same amount of available grant dollars that it would have had without making the MRI. The difference is that the money the foundation would have invested with the sole purpose of making more money now helps the foundation advance its mission in addition to making more money for the foundation.
If a market-rate return is not the primary goal, a foundation can make an investment that advances its mission and produces a below-market rate return (known as a “program-related investment” or PRI). The IRS states that the primary purpose of a PRI cannot be the production of income (financial return), but instead must be to advance the charitable purpose of the foundation. Because of this requirement, private foundations can count PRIs as part of the minimum 5% charitable payout.
When Giving Pledge members talk about impact investing, are they thinking in terms of market-rate or below-market rate investments that also advance their missions? Just as many foundations make one, both, or neither of those types of investments, I imagine the Giving Pledge members will do the same. Even though we do not know exactly what it means for the Giving Pledge members to explore impact investing, I’m encouraged that the conversation is taking place and hope that it sparks a field-wide conversation about how a foundation can advance its mission through investments in addition to grants.
From time to time, I’ll hear someone in the social entrepreneurship community speak about charity as a waste of time – the thing to avoid doing at all costs. The intention might not be to admonish the charity model, but a tone of arrogance is detectable. This is not to say that I’m not guilty, as I’m sure that over the years I’ve unintentionally had conversations in this tone when speaking about my excitement about driving social change through social enterprise. When it comes to the service delivery side of social change – whether the service or product aims to alleviate or solve a problem – I truly value the full spectrum, and now strive to ensure that my words reflect that value.
Working at an association of foundations while also networking with social entrepreneurs, I see how the same arrogant tone does not only relate to service delivery, but financing as well. Within the admirable and much-needed movement to unlock capital that has not traditionally financed social impact, some juxtapose philanthropy with impact investing in a way that explicitly or implicitly communicates disdain for philanthropy.
Now, I don’t think many of these people would argue that philanthropy has no place in social change work, the same way that few if any would argue that social enterprises could entirely replace charities. There are many who value the opportunity to test a new idea with a grant, just as many are aware that a foundation has a range of financial and leadership tools at its disposal.
What I would like to see is camaraderie among social change makers with similar goals, whether you work in government, at a nonprofit, or a for-profit; whether you alleviate problems at a charity or work to build long-term solutions at a social enterprise; and whether you finance social change through grants or seek a financial return on your social impact investment. We might work in different sectors, we might place ourselves at different points along the service and finance spectra, but we have the same end goal of driving social change. Our different means shouldn’t keep us apart. Our common end should unite us. I think infrapreneurs have natural instincts to build bridges and make these connections, but even those who don’t self-identify as infrapreneurs should seek these opportunities.
I would like to see an unsectored world in which we identify as social change colleagues, each playing unique but important roles. We should aim to learn about working within different sectors and at various points on the spectra. We don’t need to aspire to work within all sectors and using all models, but we should aspire to have conversations with one another that broaden our understanding and respect colleagues who work towards similar social change goals.
UnSectored is a great platform for this. Virtually through social media and in person at UnSectored Talks, we can connect with colleagues, share what we do, and learn about the different and complementary work of our social change colleagues.
This will come as no surprise to many: I really like infrastructure. I get excited when I meet people who develop, connect, and improve the infrastructure that connects individuals, communities, and institutions working for lasting social change. Social infrapreneurship is a concept that I’m developing to further explore this group of people.
A few weeks ago, Victoria Vrana pointed me to this infrapreneurship challenge posted by Laurie Lane-Zucker on the Impact Entrepreneur LinkedIn discussion page. Laurie quoted Jed Emerson and Antony Bugg-Levine’s Impact Investing book, asking, “What can we do to cultivate the leadership required to build new SYSTEMS for impact investment to solve social and environmental problems at scale?”
I say we need to build a pipeline of infrapreneurial leaders who strive to solve social and environmental problems. We should define and solidify the infrapreneurship concept, identify and recognize social infrapreneurs, and then build opportunities for their growth and development.
It doesn’t take much time exploring the social entrepreneurship and impact investing field to realize that there’s a lot of emphasis on the leaders who create and finance new ventures. Fantastic organizations like Echoing Green and The Skoll Foundation identify, recognize, support, and fund social entrepreneurs. This process brings tremendous prestige to the field and encourages emerging leaders to aspire to become social entrepreneurs.
To cultivate people who will build new systems for social change – what I call social infrapreneurs – we need to identify, recognize, and fund leaders who embody the preneurial spirit with an eye for developing, connecting, and improving social change infrastructure.
The first step is solidifying the concept. Yes, infrapreneur sounds silly and it adds another word to the already-overrun social change jargon. However, I think there’s value in creating an identity to which emerging leaders can aspire, and in having a term to describe the work that so many have done their entire lives.
People respond to goals and incentives. If attaining infrapreneurial status excites someone, they will strive towards it. We should create awards and opportunities to recognize infrapreneurs and encourage people to showcase their work. With this work on display, hopefully others will be inspired to do the same. And perhaps most importantly, communities of infrapreneurs will form to support one another’s growth and development, much the way we’ve seen happen among social entrepreneurs.
In two UnSectored posts here and here I’ve started to work through the concept. It’s really new and needs a lot of work and push back. Through posts, comments, and in person and virtual conversations, I hope you’ll join me in defining and solidifying this concept so we can help recognize and support those who will build and improve the systems and infrastructure to solve social and environmental problems at scale.
As I build a case for a social infrapreneurship movement, I figure that I ought to get specific about what I mean. Infrapreneurs (whose work supports the infrastructure that enables change within and between organizations) are different from intrapreneurs (who create change within an existing institution) and entrepreneurs (who create and lead new ventures). But they are all unified by one thing—what I like to call the “preneurial” spirit .
Let’s examine that root, “-preneur,” that unifies these different types of people. I believe there are three essential traits that characterize the preneur. He or she:
1) Identifies market needs
2) Aims for solutions, not Band-Aids
3) Measures performance and adjusts as necessary
Identifies market needs
The preneur recognizes a gap in the market – whether a product or service – for which there exists demand (those who need the product or service) and supply (those who can provide the product or service). The preneur doesn’t create change for the sake of change; she creates change because there’s a need for change. And she creates that change with an eye to what is needed, and what is available to meet that need.
Aims for solutions, not Band-Aids
Another defining characteristic of the preneur is a focus on solving rather than applying short-term solutions to social problems. Rather than think of those as two distinct categories, I prefer to visualize a spectrum, with short-term solutions on the far left and long-term, sustainable solutions on the far right. Some products or services might aim to ameliorate a problem, but have the added benefit of tackling a root cause. Similarly, products or services that aim to solve a problem might have short-term, or Band-Aid-like benefits. The key is that the preneur positions his intervention closer to the right than left end, with a goal to move as far to the right as possible .
Measures Performance and Adjusts as Necessary
I think this is the most crucial of the three characteristics. In “The Meaning of ‘Social Entrepreneurship,’” J. Gregory Dees describes a process of “continuous innovation, adaptation, and learning” that’s central to social entrepreneurship. He describes social entrepreneurs as shifting resources from areas of low to high productivity and yield with an end goal not simply to meet or Band-Aid community needs, but to reduce the need for Band-Aids in the first place. Assessing progress through social, financial, and managerial outcomes, social entrepreneurs make course corrections as needed to do just that.
I would implore all those seeking the preneurial spirit inside of them to heed Dees’ model. Overwhelmed by the difficulty of capturing social impact, some people downplay the value of metrics. My perspective is that performance measurement can be as helpful or as complicated as you make it. When done well, it can reveal how well teams and individuals perform in relation to expectations. The process can be as simple as establishing a baseline, setting goals and benchmarks, and comparing actual progress to those goals. And then the crucial part: course-correcting as necessary. Since the preneur focuses on meeting a need, and since the preneur aims to solve for the long-term rather than Band-Aid, the preneur has vested interest in meeting performance goals that drive towards the ultimate vision.
These are my thoughts on the three characteristics of the preneur. What do you think? Have I missed a key trait of those with the preneurial spirit?