Here are the "stickiest" things we read this week.
Social Velocity's Nell Edgington's headline (above) initially got our attention because, well, we are feeling the rapid evolution. John Trybus, Georgetown University's "social strategist," recently talked with Ms. Edgington about the state of social innovation and his blog post remarks on current sector transformations definitely resonate with us. Good stuff.
- The rapid evolution of the nonprofit sector is happening now. “Our economy is going under a fundamental restructuring and that’s affecting nonprofits as well,” Nell explains. “If [nonprofits] don’t dramatically change the way they do business they’re not going to be able to survive and thrive.” The status quo where nonprofits can hide behind the benevolent shield of charity no longer exists. Nonprofits “have to make some significant changes if they want to survive in this new reality,” she adds.
- A new type of ROI is fundamental to prove value. Forget the traditional ROI and think about a social return on investment. Says Nell: “It’s not enough to say we are doing good work and we’re helping people. You now need to start to prove that. That’s a real movement in the sector and I think that’s exciting.”
- Financing and not fundraising is necessary to ensure sustainability. The hamster wheel of galas, dinners and other traditional forms of raising money for good causes no longer works. “The system is broken,” Nell proclaims. To truly create sustainable sources of funding “it starts with taking a much bigger picture view and creating an overall financing strategy,” she adds. “So it’s starting with ‘what do we want to accomplish in the world?’ and how do we create a financial model to do that?”
Rod Schwartz, contributor over at Social Edge, bemoans the fixation of social investors on what's new and cool . Could Cleveland+ benefit from a "problem" like this? What's new and cool in our social sector? We understand this obsession with the shiny new toy (and have been guilty of it ourselves), but is this point-of-view good for solving social problems? Mr. Schwartz argues that it's as bad as (we would argue) business-as-usual is.
A charismatic founder might be in place, but there is no battle-tested team or Board. A breath-taking PowerPoint presentation has been assembled, but the route to market is unclear, and the business plan , though replete with colourful graphics, is bereft of anything which resembles hard evidence. There is sometimes no product or even a prototype—just the best of intentions and glorious aspirations.
The social enterprise sector must allow for innovation —for where else can the experimentation take place in solving social problems, but things are way out of balance. In my judgement investors and governments are obsessively fascinated with cool early stage ideas. We can dream together with the entrepreneur about what might be but forget that things almost never work out as well as planned.