Social entrepreneurship—the art of creating programs with a transformative business model focused on bringing about large-scale, positive change—plays a critical role in building a more sustainable future by increasing income, improving environmental quality, creating jobs, and enhancing quality of life. But just like any start-up, there comes a time when a great idea needs an infusion of cash to have a large-scale impact. That is where the The Skoll Foundation comes into play.
The foundation, through its Skoll Award for Social Entrepreneurship, funds social entrepreneurs working to solve global challenges, such as poverty, deforestation, water scarcity and access to health care. The award is a change agent’s dream: unrestricted funding and support to take a promising solution to scale.
Jeff Skoll, the first president of eBay, is the force behind the award, the flagship program of the Skoll Foundation, as well as the annual Skoll World Forum in Oxford. As a successful business entrepreneur, Skoll is using his wealth to “to drive large-scale change by investing in, connecting, and celebrating social entrepreneurs and other innovators dedicated to solving the world’s most pressing problems.”
In conversation with Dan Crisafulli, Director of Ecosystem Investments and Partnerships at the Skoll Foundation, I had the chance to discuss the highlights of its current portfolio and tease out six trends in social entrepreneurship.
Six Trends in Social Entrepreneurship
1. Get to the Root of a Global Problem
The Skoll Foundation supports organizations working to solve the root cause of a global problem. Take Root Capital as an example. Root Capital is helping lift small Tanzanian coffee farmers out of poverty with a unique loan program that allows growers to upgrade their equipment and systems, increasing the quality of their coffee, increasing income by up to 50 percent, and decreasing water pollution by 80 percent.
Root Capital’s innovative program has since brought Starbucks in as a partner. The Seattle-based corporation made a commitment to purchase the coffee at a premium price if the sellers implemented some changes to become a reliable source.
Unlike Ashoka that will provide new projects seed funding, the Skoll Foundation only funds well established organizations with a proven concept that is ready to scale up. It empowers them to extend their reach, deepen their impact, and improve society.
The funding criteria require a three-year track record, proof of concept, and a business plan for major growth in impact.
3. The “C” Word: Collaboration
Another criterion the Skoll Foundation uses to assess organizations is to what degree can they enter into effective partnerships to reach scale more efficiently. When done correctly, collaboration can tap into levers that can magnify impact (collaboration was the theme last month at the annual Skoll World Forum in Oxford).
“Collaboration is a word that is widely used and seldom practiced. To scale innovation, entrepreneurs need to tap into deeper pools of funding and explore how to create effective partnerships,” said Crisafulli.
He pointed to the example of a collaboration between two organizations they fund: Root Capital and TransFair USA. As mentioned above, Root Capital provides farmers trade finance to produce a quality export, while TransFair is working to build a brand for fair trade and provides fair trade certification support to farmers. Their partnership creates a very symbiotic approach.
Another unique collaboration is the EcoPeace-Friends of the Earth Middle East project, which brings together Jordanian, Palestinian, and Israeli environmentalists to tackle water management issues.
4. The Multiplier Effect
The Skoll Foundation likes organizations that have a “multiplier effect”: projects that get a big bang for their buck by tapping into levers and magnifying impact. Crisafulli points to Ceres as an example of an organization whose impact goes beyond its size.
“They take a very pragmatic approach of working with corporations to internalize environmental externalities and bring them onto the balance sheet. They have built a network of investors responsible for trillions of dollars of assets and aligned themselves with organizations that have a global impact. The result is a huge multiplier effect.”
5. Highly Scalable Business Models
While Crisafulli acknowledges that there have been some concerns about the effectiveness of some business models, such as microfinance, at its core, he believes microfinance is effective. And he sees the next big wave as something that will build on its strengths.
He articulated, “What investors are looking for are the next highly scalable business models that are going to reach hundreds of millions of people in a transformative way.”
6. Passion of Young People
For Crisafulli, the single biggest source of optimism is the role young people are playing in helping to create these business models and the excitement, enthusiasm, passion and commitment he sees among students, including the Skoll Scholars at Oxford.
“My hope is that this is a harbinger that social entrepreneurship will actually become an integral part of entrepreneurship. Not just a stand alone silo, but a well integrated approach that brings positive impact into the mainstream of business.”
Deborah Fleischer is President of Green Impact, a strategic environmental consulting practice that helps companies walk the green talk. Green Impact designs and implements new green initiatives and develops sustainability communications that bring successes to life. You can follow her occasional tweet @GreenImpact.