Foreword to the original version, by Jed Emerson

The ability to create, to break the mold, to engage in enterprise is perhaps one of the greatest attributes of humanity.

Our capacity for shortsightedness, bias, and provincialism is perhaps our greatest weakness.

This document gives evidence of the first, and foreshadows the coming of the second.

While its roots are deep in our past, over the last three decades we have witnessed an explosion of innovation as a growing international community of individuals has experimented with a great variety of approaches to fulfilling one basic idea:

Markets and business, capital and commerce can be harnessed not simply for the creation of individual wealth, but rather the creation of value in its fullest.

These innovators have sought to create value consisting of equal parts equity, ecology, and economic development. They have broken with the beliefs of traditionalists to practice a form of social enterprise that seeks to engage in the community application of business skill and acumen. These social entrepreneurs have created a rich diversity of approaches and strategies, all of which are now coming together within a unified, global parade.

It is, however, a parade of many marchers, bands, and different colored banners. Having spent years on various side streets, the diverse parts of the parade are now flooding the grand avenue and approaching the town square, which is filled by glorious music and pageantry--and yet in the midst of the celebration we are suddenly aware we have a problem.

Too much creativity? Never!!

But too many words clashing in meaning; too many ideas promoted before having stood the test of time; and too many parts moving in a blur of confusion.

What is needed is a way to rise above the fracas, a tool to help us transcend the music of our own band in order to see the breadth of the musical parade in motion before us. What we need is a single, clear assessment of who "we" are and "what it is we are doing."

Kim Alter has presented us with such a tool.

Building on the nearly three decades of funding experience of the Social Enterprise Program of the Inter-American Development Bank, drawing upon the writings of practitioners and thought leaders from around the world, Kim has done an excellent job presenting us--social entrepreneur, investor, academic, and practitioner--with a set of frameworks and definitions to assist each of us in understanding how our own work fits with that of others and how together these various parts are unavoidably becoming interwoven into a singular whole.

By presenting us with a host of social enterprise models, this typology lets us see how our own approach to enterprise can be consistently defined and compared with that of others. By focusing upon the Bank's portfolio of investments in Latin and South America for examples, Kim has reminded us that the drive to enterprise is not a U.S., European or First World phenomenon, but rather one that speaks to the essence of human experience and ambition regardless of border, language, or level of literacy.

And by approaching her analysis from the perspective of a reflective practitioner, she tells us yet again that each of us can and must learn from each other. The best lessons and experiences are in the streets, the barrios, and the rural hillsides as theory meets practice and intense labor comes to be informed by thought. This document gathers the work of the whole and infuses it with thought in order for others to learn and understand more deeply the significance of the international efforts currently in motion.

Of course, the "problem" with assisting us in achieving greater understanding of the connections between our various labors is that we can no longer pretend that what we are engaged in is an "experiment" or a "demonstration project" or "proof of concept." Many questions remain and must be answered, but the notion that social entrepreneurship is a fad or thin intellectual fancy of those who couldn't make it in mainstream business is proved wrong not only by the work presented in the following pages, but by the continuing personal witness of literally tens of hundreds of social entrepreneurs the world over who now, via the Internet and the gathering storm of intellectual awareness, are proving themselves worthy of not grants, but investments; of not initiatives, but permanent program areas of major foundations and governmental funding bodies.

The "problem" with documenting an area of work so well is that we are now faced with at least two questions. First, now that the demonstration grants have demonstrated that fad is now trend and inquiry both emerging knowledge and expertise, we must ask:

Where is the serious money?

Where are the international field-building initiatives? Where is the "second tranche" of investment to take these ideas and organizations to real, meaningful scale and, thus, broader social and environmental impact? The challenge to the funding community, both private and public, is stark:

Are you in or are you out?

The practitioners have demonstrated both skill and informed practice. Now the funding community must follow through with strategic and significant amounts of capital (market-rate, concessionary, and philanthropic) to assure these efforts fulfill their obvious potential. In the words of one of my foundation colleagues, "It is time we move from our practice of 'let a thousand flowers wither' to let the best flowers bloom."

This document, and the many organizations whose work it draws upon, demonstrates the reality that the willing stand ready and waiting. Let us pray they do not stand waiting as long as it may take this report to begin gathering dust upon the shelf…

But the evidence presented in this document raises another question, and this one is directed at the practitioners of social enterprise. The second question is, quite simply:

What is it that you are really trying to do?

Over the past years, we have, each of us, contributed to a cacophony of concepts, terms, and ideas. We are all quite impressed with our disparate visions and intellectual approaches. And, yes, we are all quite cute and brilliant and revolutionary in our work. To be quite frank, there is a part of us (dare I say a large part?) that likes to be different and enjoys engaging our colleagues in nauseatingly long discussions of the social enterprise equivalent of how many angels can dance on the head of a pin.

We might pause for a moment and think:
If all we are trying to do is prove we can be communists in capitalists' clothing, fine. This paper demonstrates that we have proved our point. Those who were waiting for the definitive proof may now go home…

But, what if what we are really trying to do is change the world and what is really driving us to rise up early in the morning and fall into our dreams late at night is the vision of a genuinely transformed planet? If that is the case, then we need to see how our diversity consists only of divisions if one is face to face, nose to nose, and cheek to jowl with the notion of social enterprise--but as we step back a bit, as we take time to ponder what we really want to see around us in 30 years time, something else becomes quite clear:

The work of social entrepreneurship and the creation of social enterprise is also the work of a for-profit manager striving to drive the practice of corporate social responsibility into her firm; and, in truth, the approach of a venture philanthropist is not six degrees removed from that of a socially responsible investor or manager of a community loan fund.

What becomes clear is that it is all the same and we are all part of a common effort to create more effective tools to maximize total value for our entire global community.

The particular worth of the document presently in your hands is in some ways its simple contribution to helping us all see the parts that we are…

But the true potential of this document, for practitioners and investors alike, is the fact that it points toward the inherent truth that all of us are engaged in giving birth to ideas and skills that hold the promise of creating meaningful, full, and integrated value for investors, managers, entrepreneurs, and the future children of our world.

We must understand that defining the parts is just the first step toward embracing the whole. With this contribution by Kim Alter and the Inter-American Development Bank now in place, we must think long and hard about how we can best bring these parts together into a focused drive toward the real, ultimate goal:

the creation of sustainable economies, ecology, and equity that will be of benefit to all beings within communities and regions around the world.

Do we have what it takes to build our global communities at the same time we labor to expand our own organizations and pursue our individual strategies?

We could do a lot worse than try…

Celebrate the Struggle!

Jed Emerson1
Grand Lake, CO

  • 1Jed Emerson is Senior Fellow William and Flora Hewlett Foundation, David and Lucile Packard Foundation and Lecturer Graduate School of Business Stanford University