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December 7, 2009

Do social entrepreneurs and their ventures fail? You bet! Do philanthropists? Of course! Unfortunately, you probably don’t hear much about either’s flops, fiascos, and total failures. Why? For some pretty simple reasons: social entrepreneurs hesitate to speak publicly for fear of being labeled as “difficult,” while philanthropists have something of a “do no harm” credo to which they, consciously or unconsciously, subscribe.
Like other entrepreneurs, social entrepreneurs can run out of money, overshoot their targets, and lose battles with their boards. But it’s the rare social entrepreneur who is willing to concede defeat for the long haul. Most will rise again, and to do so successfully, they’re reluctant to burn bridges—so this means you won’t hear them being terribly public about how things crashed. Many of us, however, have had enough private conversations with social entrepreneurs to know that they often come to a parting of the ways with powerful board directors or funders, usually over strategy, finances, or some other significant issue. Faced with the choice to speak out or move on, most social entrepreneurs will, to paraphrase President Obama, pick themselves up, dust themselves off, and begin again the work of changing the world.
Philanthropists, even the more intrepid sort, face a similar dilemma. When a social entrepreneur is not able to deliver on her or his promise, there is usually some variable that didn’t pan out as projected— a funding source that didn’t come through, inadequate staffing, or, sometimes, a nasty surprise. Do we cut our losses? Extend the grant period? Connect with other funders to hatch a bailout plan? Faced with an investment that’s heading south, thoughtful philanthropists consider the ramifications of their decisions: Who will suffer if I pull out abruptly? Blame management, the board, or another funder? Changing external conditions? It’s all well and good to say that we, as one funder, made a poor investment, but not so easy to pinpoint the problem.
Ending my blogging week on this note is depressing me. So let me close by circling back to where I began.
If one of the defining characteristics of all entrepreneurs and social entrepreneurs is the assumption of risk, shouldn’t we, as philanthropists, be clear that failure goes with the territory? At the Skoll Foundation, we’ve had our share—and you know, I’d be worried if we hadn’t! But when was the last time you saw failure worked into any assessment rubric or logic model? Maybe, just maybe, we should be holding ourselves accountable for failing as much as for succeeding! Now that would signal intrepid philanthropy. . . .

Sally Osberg