Compiled by Rolfe Larson and Janine Vanderburg on January 12, 2016
After greeting 2016 with enthusiasm and hope, we at Social Impact Architects wanted to take a closer look at new insights coming from the field of social enterprise that will help shape meaningful social change. We invited our Denver-based friends, Rolfe Larson and Janine Vanderburg, social enterprise consultants and experts, to share what they believe are the most noteworthy trends in social enterprise (SE). They pored over hundreds of comments in the npEnterprise Forum (npE) – the 10,000+ circulation, non-commercial online forum for all things SE – to distill the top five SE trends. Here are their expert observations:
Structure As Strategy, Not Moral Choice. Back in the day, socially-minded people formed nonprofits while entrepreneurial-minded people founded for-profits. Today, “there’s a continuum of options between pure-play charity and pure-play business,” commented Jim Fruchterman. For more, see Jim’s favorite essay on this: “For Love or Lucre” in the Stanford Social Innovation Review. Not surprisingly, millennials are driving this trend, since they often “care more about results than what kind of organization something is,” commented Hildy Gottlieb.
More Mergers. SEs are recognizing that one way to grow impact is to get married. Hannah Pechan reported a recent uptick in SE mergers in Nashville, and Tom McLaughlin noted that a similar trend is evolving nationally in the nonprofit sector. Tom also commented: “I suspect we are on the verge of consolidations in most areas of the country, although it will take a while to peak in different geographies. Strong cultural and demographic factors are behind a lot of this.”
Impact Investing Is The Talk, But Does It Really Walk? Impact investing will continue to expand in 2016, with more financial institutions, foundations and high-net-worth individuals investing in companies based on impact. That’s great, but many of us feel it’s missing something. Jan Cohen points out that while many SEs can often get funds for hard start-up costs such as equipment, most struggle to “get the funds they need for consulting and start-up salaries,” even with a good business plan. Kevin Lynch notes that the impact of impact investing may be an illusion. When push comes to shove, will big banks really choose impact over financial return? And will this illusion deter philanthropic investments? He writes: “a philanthropic dollar in a nonprofit SE produces an internal financial return that can be recycled again and again to multiply impact. An impact investment dollar demands an eventual exit for itself … regardless of whether any true impact was created in the first place.”
We All Need To Confront Racism. Lessons from Ferguson and Black Lives Matter are not only for the police and government. Suzanne Smith points out that with “communities across the country being confronted with racism and discrimination,” all of us working on social issues need to confront racial justice issues within our own organizations. Here’s her blog on this topic, which includes practical steps for things like purchasing, hiring and programming.
Mapping The Sector. A 2016 priority for the Social Enterprise Alliance is to develop a map and census of the SE sector, to provide greater clarity, cohesiveness and attention to the sector. That’s an excellent priority, one that will build on previous efforts to count noses. Back in the last century, Community Wealth Ventures developed a directory of nonprofits with business ventures. About five years ago, Pacific Community Ventures invited SEs in any sector to register in the Great Social Enterprise Census. More recently, RLA created the Social Impact App. And finally, looking internationally, a group called SEFORIS in Europe just finished interviewing more than 1000 directors of SEs from China, Russia and the EU. We’re looking forward to the advances that will come from SEA’s work in this area in 2016.
Do you agree? We’d love to know your thoughts on what you feel are the top trends in social enterprise.