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Are the Girl Scouts a Social Enterprise?

| Thursday November 13th, 2008 | 0 Comments

SoCapConference.jpgWhat about WalMart? At a recent SoCap08 panel discussion on Market Creators, moderator Todd Johnson from Jones Day suggested the Girl Scouts of America and WalMart occupy the opposite ends of the continuum defining social enterprise. His opening remarks generated a few chuckles from the audience, and a few hisses when he mentioned WalMart, but he made his point. All successful strategies should be considered when evaluating what makes a sustainable mission-driven business.
“Start from a clean sheet” was also the message to those organizations who provide the investment infrastructure to the social enterprise sector; the panel included a sample of these organizations. Our current capital market system was not built in a day. And likewise, the emerging social capital market will require the development of an infrastructure and support system to “reduce friction, increase trust, and accelerate growth – from rating agencies to new legal structures to exchanges.”


Every market is based on supply and demand and consists of sellers and buyers. From this perspective, there is no shortage of demand for social investing. Mark Campanale from the Social Stock Exchange estimates there are 60 million socially conscious consumers, and added “if you can create an infrastructure to gather capital and allow it to flow to opportunities, the money is there from the public.” Addressing the supply side, Andrew Kassoy from B Corp estimates there are 30 to 40 thousand sustainable business entrepreneurs looking for investment.
linktv.jpgBesides supply and demand, a functioning capital market also requires a set of standards or a vetting mechanism to allow investors to separate the good companies from those just doing good marketing. Triple Pundit readers will recall several posts describing B Corp’s rigorous vetting process. To display the B Lab brand, companies must meet comprehensive and transparent social and environmental standards. They must also change their governing documents to institutionalize all stakeholders’ interests — employees, consumers, the community, and the environment.
The last bit of the puzzle, and more problematic, is the ability to measure return. With the wide range of social enterprises addressing so many different social issues, how do you measure and compare the social returns? Elise Lufkin from Calvert Giving Fund offered a different view on this topic, suggesting that traditional measures of return may not apply here. She cited Robert Putnam’s Bowling Alone theory about the decline of social capital and believes many people gain the social returns of connection and relationship through their investments. For many this return is sufficient and they are not looking for more quantifiable returns.
fora-logo.gifIf you missed last month’s Social Capital Markets 2008 (SoCap08) conference in San Francisco, two of the conference media partners, Link TV and FORA.tv, have posted a sample of conference videos, including the panel discussion reviewed above on Market Creators.
Registration for SoCap09 will be available soon, so make sure to keep an eye on the website. While you are there, you can also access several useful resources, like the socapmarkets wiki generated by MBA students from Berkeley Haas School. You can also still download an excellent white paper “Making Sense of the Social Capital Landscape: Defining A Common Language” that offers a conceptual framework for describing social impact along a spectrum from relief to recovery to development to systemic change.
By the way, although donations and grants are still their primary revenue source, the Girl Scouts sell over 200 million boxes of cookies every year generating a huge amount of earned income and sustainability. One enterprising scout, Jennifer Sharpe from Michigan recently sold a record 17,328 boxes just by setting up shop on a busy street corner. Is Jennifer our next great social entrepreneur?


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