Monday, October 24, 2011

Making a Buck to Save the World: Rupert Scofield on Social Entrepreneurship

Much has been written recently about social entrepreneurship, the effort to harness market forces to noble, world-changing ideals. Most commentators have lionized the visionaries whose gift for seeing old problems with new eyes makes such efforts possible. But Rupert Scofield, in The Social Entrepreneur's Handbook, turns his attention to the nuts-and-bolts managers who turn visions into reality.

Scofield, whose leadership guided the Foundation for International Community Assistance (FINCA) to maturity, brings an entire career's experience to the question: what makes for successful social entrepreneurship? The answer certainly isn’t depth of vision. FINCA founder John Hatch had scads of ideas, but not the business acumen to make them reality. And not money, since FINCA has flourished though fat times and lean alike.

According to Scofield, we must never forget that a benevolent business is still a business. True believers may get so enamored of their founding vision that they lose sight of fiscal realities. Ideals must never impede social entrepreneurs’ bottom line, and social entrepreneurs must practice good business to pay for their ongoing good works. Scofield, a former Peace Corps volunteer with a psych degree, had to earn his business stripes the hard way.

But a benevolent business isn’t like other businesses. It’s driven by a vision, not by grasping shareholders. And while it must see a return on its investments, such a business is not profit driven. Scofield warns that social entrepreneurs must prepare themselves for some hungry times. Social entrepreneurs, in Scofield’s telling, walk a fine line between Wall Street economics and big-hearted charity.

Such a line makes for circuitous walking. Scofield recounts lessons learned the hard way in selling the complex reality of charitable finance. Many people come to him at the conclusion of long, illustrious careers, hoping to give back to the world that has made them rich. Younger candidates want to do good while making their names and kick-starting their careers. Both have something to offer, and both bring severe risks to the table.

Because nobody can do everything in a complex social enterprise alone, social entrepreneurs rely on allies, employees, and benefactors. While ground-level administrators handle the company’s actual community charity, the entrepreneur spends the most time cultivating these complex, subtle relationships. Because they provide minefields new entrepreneurs can’t foresee, Scofield explains how to negotiate this strange territory with minimal risk.

In hiring, for instance, the entrepreneur must find candidates who share the company’s vision and have salient skills. Finding just one of these is hard enough; finding both can be exhausting. And once the entrepreneur recruits such winners, managing and retaining them can require as much energy as finding them in the first place. But targeted investments of time and strength make it possible.

Benefactors, likewise, come in three stripes: private donors, public spending, and internal resources. Each has its own demands. Private donors, for instance, often give with strings attached. They may want their money spent on specific projects, or resent any funds going to administrative costs. Public money can shift with the political winds. And internal resources must be stewarded with care.

And alliances can depend on culture. Americans, for instance, trust individual initiative, and their giving reflects a sense of private duty. Europeans, by contrast, believe the government should take responsibility for uplifting the downtrodden, and resist private charity. And many Asian cultures, now recovering from years of Communist dominion, have little notion of philanthropy. The social entrepreneur must be culturally multilingual.

Conventional business sense would dictate that only a person with a background in business, religion, and international affairs should attempt so complex an enterprise. But social entrepreneurs jump into arenas for which they lack standard credentials, often learning on their feet, because they believe it’s simply right. Scofield doesn’t pretend he can make things any easier, but he does try to soften some of the hard edges.

Despite the title, Scofield doesn’t present a “handbook” entrepreneurs can browse as needed. Rather, it’s more of an umbrella guide of the challenges entrepreneurs face, the pitfalls they must endure, and the shortcuts that make the job possible. Sometimes Scofield shares advice others gave him; other times, he offers discoveries he made at great cost, so you can avoid his mistakes.

Our society today trusts both human goodness and market inevitability. Social entrepreneurship offers the hope of wedding these two seemingly contradictory principles. But it will do so only with leaders’ skill and dexterity. Rupert Scofield lets us believe that we, as individuals, can aspire to such optimistic unity.

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