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December 2, 2009

Paul McCartney had it right: “Money can’t buy me love.” But for just about everything else in the world, money helps. As for changing the world, it’s downright necessary! And yet, we’ve all encountered those who think societal change can be done on the cheap, that second-class talent is good enough, and that anything but what’s spent on direct program services is wasted. Oh, and by the way, social entrepreneurs and their organizations are still expected to produce world-class results, all of which should be impeccably measured, benchmarked, and ready to provide proof of sustainability.
The social entrepreneurs I know best are, to a woman and man, world-class talents, every bit as driven to succeed as the most wildly successful entrepreneur you know. But in order to produce big results, they need what all entrepreneurs need: investors who are as smart and committed as they are; skilled and experienced staff; computers, systems, electricity, and someplace to call headquarters.
At the Skoll Foundation, we’ve adopted Jim Collins’s (Good to Great and the Social Sectors) concept of the resource engine. Where private sector entrepreneurship demands a business model, social entrepreneurship requires a well-conceived and executed resource engine—in essence, a resource model aligned with a venture’s purpose, one that enables it to achieve superior performance over time.
For an organization like Wendy Kopp’s Teach for America, fuel for the resource engine is largely supplied by the U.S. government’s AmeriCorps funding, which secures annual stipends for TfA’s core asset, its college graduate teachers. For Habitat for Humanity, the resource engine gets its juice from the faith community, with churches of all denominations supplying the volunteers who are Habitat’s work force. Admittedly, it’s the rare social entrepreneur who is able to pull off what Shai Agassi has accomplished for his Better Place in securing $200 million in seed round funding from the finance and venture capital industries. Still,  there’s really no question that Agassi is every bit a social entrepreneur, determined to render that other engine—the one in most of our gas-guzzling automobiles—obsolete with his systemic solution to electrically powered cars.
The point of Collins’s model is that for any social entrepreneurial venture, there’s a proportionate mix of funding—fees and revenues, grants, contributions, government funding, contracts—that is fundamentally aligned with an organization’s mission and is, hence, more sustainable. The point of my little rant is that social entrepreneurs deserve investors who are savvy, dedicated, and willing to put their money on the line for change.

Sally Osberg