Editors Note: Thane was invited to speak during the annual membership meeting of Foundations and Donors Interested in Catholic Activities (FADICA), in Santa Monica, CA in February, on the subject of social entrepreneurship. Following are his remarks.
Pope Francis published his influential encyclical Laudato Si’ in 2015, the same year the United Nations Sustainable Development goals set an ambitious agenda for the next 15 years of global human development. Both frameworks recognize the interconnection between poverty and climate change. In the words of Pope Francis, there is “an intimate relationship between the poor and the fragility of the planet.”
Global human development is a term that generally brings to mind government-to-government aid, formally known as Official Development Assistance (ODA). ODA totaled $146.6B in 2017, which may sound like a lot of money. There are some fundamental problems with the paradigm of ODA, not least of which is that top-down decisions on what to fund deprive developing countries and their communities of agency. Perhaps more problematic is that many of these decisions seek to recapitulate practices that have fueled economic growth in more developed nations, sometimes referred to as the Global North. Much of that economic growth has relied on burning fossil fuels, the Global North accruing what Pope Francis refers to as an “ecological debt” to the Global South. Strikingly, according to the International Monetary Fund, global fossil fuel subsidies in 2015 totaled $5.3T. The Global North is investing thirty-five times more in creating the problem than advancing solutions.
Charity is a deeply rooted model for addressing poverty in almost every religious tradition – alms for the poor a cry heard across millennia. Make no mistake: charity is essential after calamity, natural or human-made, though the distinction is increasingly difficult to discern. To meet basic needs such as food, water, and energy, charity is not a sustainable solution, however; further, it also deprives people of agency in solving their problems.
Social entrepreneurship is a fundamentally different paradigm that enables individuals and communities to be architects of their own futures. We’ve all heard the maxim, “Give a man a fish, he eats for a day; teach a man to fish, he eats for a lifetime.” The corollary for social entrepreneurship is this: “Teach a woman to run a sustainable fishing enterprise, it feeds her community forever.”
What exactly is social entrepreneurship? There are many definitions including one I love from Sally Osberg and Roger Martin: disrupting unjust social equilibria and creating more just ones. Most of us have a sense of entrepreneurial behaviors: innovation, adaptation, resilience, acting boldly even in the face of resource constraints. All of these are true for social entrepreneurship. In addition, as Greg Dees noted in 1998, there are two additional elements: a clearly articulated social value mission; and heightened accountability to constituents, including assessment of the outcomes they experience as a result of the social enterprise’s products and solutions.
A social enterprise with a mission to provide refugees dignified livelihoods can assess how many refugees are engaged in meaningful work, how much income they generate; one that nourishes children so they can learn can measure nutrients and learning outcomes; a safe drinking water enterprise might report liters consumed and reduction in diarrheal diseases. A mission to eliminate needless blindness shows us the amazing grace of social entrepreneurship: the blind can see.
Social enterprises might be structured as for-profit, non-profit, or hybrid organizations; the form should be informed by the impact sector and underlying business model. Social enterprises are often community-based.
As an example, Solar Sister, formed in 2011, supports local women as they create clean energy businesses in Africa. The business model is Avon-style: women entrepreneurs go door-to-door selling solar-powered lanterns and clean cookstoves. The unit economics through the value chain are compelling: the solar lantern manufacturer makes a margin on the sale to Solar Sister; Solar Sister captures margin; and the women entrepreneur makes money on each lantern she sells.
Importantly, the woman who buys the solar lantern is better off economically. She can stop purchasing subsidized kerosene at approximately $2 per week, and using pay-as-you-go technology embedded in the lantern, immediately have higher quality light without fumes equivalent to smoking two packs of cigarettes a day or lanterns falling over and burning her home and children, which happens over 2 million times annually.
Once she’s paid off the lantern, in as few as 5 weeks, she has $2 more per week to invest in her family and her community. She sends her girls to school as well as her boys. She starts a small business selling goods to passersby with light after dark. She engages in economically productive activities such as weaving or sewing. She gains a sense of agency.
Everyone wins except the fossil fuel companies as these women becoming economically empowered and make their communities more resilient to climate change. We believe that this intersection is one of powerful levers for ending poverty.
Miller Center accelerates social enterprises to end poverty and protect the planet. Silicon Valley executives accompany the social entrepreneurs through a structured curriculum for about six months, building trust by sharing the journey. The social entrepreneurs discern a path to scaling impact. For those familiar with the Spiritual Exercises of St. Ignatius, our accelerator program is akin to the Spiritual Exercises of Silicon Valley. Our goal is to help them achieve operational excellence and become ready for investment of an appropriate form of capital for their impact sector, which may be equity, debt, grants, or blended sources. Since our first program in 2003, we have accelerated over 1,000 social enterprises delivering impact in more than 100 countries; they have raised nearly $1B, half since participating in our accelerator programs. Collectively, these social enterprises have improved, transformed, or saved the lives of over 380 million people living in poverty.
Last year, we pioneered an accelerator for social enterprises serving or led by refugees, migrants, and human trafficking survivors, the first in the world to our knowledge. As a university-based social enterprise accelerator, we published a white paper on this cohort to share lessons we learned on how entrepreneurship can bring dignity to the most vulnerable among our common human family.
We launched a Catholic Action for Social Entrepreneurship (CASE) initiative in Africa and the U.S. to transform social ministries to more sustainable social enterprise models; catalyze formation of new social enterprises; and leverage underutilized assets, such as land. My colleague Keith Warner OFM recently returned from leading visits for Sisters from congregations in east and central Africa to over a dozen social enterprises, and next month, we plan host workshops for the Sisters and for Jesuits in Nairobi. The host social enterprises expressed strong interest in partnering with the congregations to expand their impact; the trust and respect of the Sisters in the communities they serve presents a unique opportunity.
We engage Santa Clara University students in accelerating social enterprises through action research that is rooted in the principle of value-exchange. Host social enterprises receive high-quality research deliverables such as impact assessment reports, documentation of operating procedures, and marketing materials. The students experience transformational learning. This program was possible because of a generous, expendable gift from Ann Bowers, widow of Robert Noyce, first CEO of Intel. So far, Keith and I have had the privilege to share the journey with 111 young leaders, 8 of whom have won Fulbrights and three of whom have been named valedictorian. Today you’ll hear from two of them about their experiences and their host social enterprises.
In a short period of time, I’ve shared a lot of metrics, statistics, and stories with you. I don’t expect you’ll remember them all, so here are my two take-home messages. First, social entrepreneurship is deeply resonant with Catholic social teaching. Second, Catholic social ministries and higher education institutions are uniquely positioned to leverage social entrepreneurship to fashion a more just, humane, and sustainable world.