[Book review] For social entrepreneurs, a blueprint to take action

from The Globe and Mail

HARVEY SCHACHTER

FORCES FOR GOOD By Leslie Crutchfield and Heather McLeod Grant Jossey-Bass, 312 pages, $35.95

Creating a World Without Poverty By Muhammad Yunus Public Affairs, 261 pages, $31.50

When non-profit leaders turn to the bookshelves for management advice, it's generally culled from the business experience.

Jim Collins published a slim monograph a few years ago adapting the ideas from his best seller Good to Great to the social sectors. But now non-profit leaders have their own version of Good to Great, written by two of their own who developed a list of high-impact, non-profit organizations and delineating six best practices common to them.

Meanwhile, individuals interested in social reform have an additional model to follow, courtesy of Nobel Prize winner Muhammad Yunus, who created the concept of microcredit with his Grameen Bank and now is championing what he calls social businesses.

Leslie Crutchfield, a managing director of Ashoka International, which supports social entrepreneurs, and Heather McLeod Grant, a former McKinsey & Co. consultant who advises the Center for Social Innovation at Stanford University, picked 12 of the most successful non-profits founded in recent U.S. history.

They didn't opt for the most recognized brands or even what may be the best managed, but sought the non-profit equivalents of Google and eBay - innovators that were having a significant social impact. The sample included: Teach For America, which sends some of America's best graduates to instruct for two years at a modest salary in the United States' toughest public schools; Habitat For Humanity, which set out to eliminate poverty and homelessness and has volunteers building houses for low-income people; and Environmental Defense, which started out as an antagonist to big business but now works with corporations to use free market mechanisms to combat climate change.

"Collectively, they have influenced important legislation on issues ranging from immigration to welfare reform, pressured corporations to adopt sustainable business practices, and mobilized citizens to act on such issues as hunger, education reform, and the environment. Founded and led by social entrepreneurs - whether they call themselves that or not - these non-profits truly have become forces for good," they write in Forces For Good.

The authors were astonished by what they learned from those non-profits, and contend the framework they discovered through their research offers a new lens for understanding the social sector and what it takes to create extraordinary levels of social change.

"The secret to success lies in how great organizations mobilize every sector of society - government, business, non-profits and the public - to be forces for good. In other words, greatness has more to do with how non-profits work outside the boundaries of their organizations than how they manage their own internal operations," they write.

These non-profits still relentlessly fundraise and put together well-connected boards. But they are content with just building a "good-enough" organization internally so that they can then spend their energy focused externally on being a catalyst for systemic change. They work with and through others, leveraging their strengths.

The six practices are:

Advocate and serve

They don't just provide good services or press for social change. They bridge the divide between advocacy and service and become good at both. (In Canada, however, tax laws place limits on charitable groups' advocacy.)

Make markets work

Rather than depending purely on altruism and charity - and seeing the private sector as the enemy - they find a way to work with markets and business to accomplish their goals. Some of them run businesses for the reliable income stream. Share Our Strength developed a consulting arm to help other non-profits generate revenues through business ventures and cause-related marketing partnerships.

Inspire evangelists

They view their volunteers as more than sources of free labour or membership dues, devising ways to get them involved in the organization's work. As a result, an emotional experience is created as supporters take part in achieving the mission.

Non-profit networks

They help other non-profits succeed, rather than viewing them as competition for scarce resources, believing that by building networks they will have a more lasting impact on society.

The art of adaptation

They are exceptionally agile, modifying their tactics as needed to achieve success.

Share leadership

Many of the leaders have colourful, charismatic personalities but they constrain their egos to focus on the good of the mission, putting that before their own interests and even that of their organization. Many have been around for decades, but they share power internally, allowing subordinates strong roles.

That's a taste of the principles, which I found even more intriguing as I delved into the separate chapters on each, seeing how the different organizations operated and the full range of possibilities for bringing each concept to life. It's a unique book that non-profit leaders can learn from and call their own.

In Creating a World Without Poverty, Mr. Yunus says that, for our free enterprise system to be complete, we must supplement profit-maximizing businesses with those that focus on addressing social ills, such as poverty.

He presents two models for such organizations: In the first, the shareholders would agree to never receive any return on their investment but would be satisfied with repayment over time; this would allow the organization to attain its social goals better without having to gain a profit. In the second version, the companies would be profit-maximizing, but the shares would be held by poor people who would receive the proceeds.

Why would individuals invest in the first type, when they would get no return? His answer is that's exactly what we do when we donate to charity. Here, the investment eventually would be returned, although it could be channelled into another social venture, something that might be attractive to philanthropists and foundations.

His Grameen Bank has started a few social businesses, notably a partnership, chronicled in the book, with the large French company Groupe Danone, to sell a cheap, nutritious yogurt snack for kids in Bangladesh.

The book, which goes beyond social businesses to delve into broader issues of poverty, offers an interesting alternative model for us to consider as we contemplate social action. With Microsoft Corp. founder Bill Gates having recently called for businesses to get involved in solving social problems, there may be growing momentum behind that basic notion and Mr. Yunus's may be a model that some choose to follow.