Thursday, December 18, 2008

Rightsizing Enthusiasm

"Until today's [social] entrepreneurs discover which business models really work, there will be uncertainty and wasted effort."

Steve Hamm, Capitalism with a Human Face, Business Week, December 8, 2008

This balanced article recognizes that "there's a danger of confusing enthusiasm with effectiveness" when looking at social entrepreneurs and their enterprises. 'You have to get beyond the gee-whiz factor of social entrepreneurship,' says Michael E. Porter."

The problem is that we tend to look at only the stars and not at the failures or the enterprises stuck in the mud. Moreover, even some of the stars are puzzling in terms of impact.

"Grameen Bank, the pioneer of microfinance, says it has brought 65% of its 7.5 million clients out of 'extreme poverty,..yet..Bangladesh.. remains one of the poorest countries in the world, with 40% of its people under the poverty line."

And yet there are remarkable social enterprises that marry social mission and business practices and seem to derive the best of both.

"In a sense, the social enterprise phenomenon is like an industry just starting to take shape."

For the social enterprise field to mature we need good information and transparency about performance, the right expectations for financial returns, and access to capital for growth.

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