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Social Enterprise and the Cocktail Party Problem

April 7, 2011
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Confronting Old Conventions and Misconceptions

I’ve noticed a certain trend, and it speaks volumes about a major soft challenge confronting social entrepreneurs. Call it the cocktail party problem.

You see, cocktail parties are an excellent litmus test for gauging the assumptions and conventions of others, as social pressures, noise, and various distractions tend to push us back on familiar narratives and frameworks. And I find that whenever the topic of my work comes up, responses follow a predictable pattern: either “Tell me why” or, “What’s in this for you??”

My private sector friends often pounce as soon as the words donation or NGO leave my lips: “Tell me why,” they interject,” – why should I participate in this? Remember, I’m a cold hearted corporation, talk to me about the bottom line!!” Those with a public sector or nonprofit background are more apt to let me finish before leaning back, pursing their lips, and offering up a long “hmm okay…but what’s in this for you?”

What these responses reveal are widely held, deeply ingrained conventions that define the organization of society along traditional economic, social, and civic lines. Social entrepreneurs confront them every time they pitch their model to a new audience, because their models rarely fit  into the neat categories these conventions accommodate.

As individuals, we tend to process new information by fitting it into familiar frameworks. Thus, I watch as my listeners pick-out certain key words, and immediately pigeonhole IIC into a formulaic box they understand and are comfortable with. Bankers hear the words donate to NGOs and conclude “charity.” Nonprofit workers hear drive business from conscious consumers and think, “corporate marketing ploy.” Public policy types simply hear real estate and think “ponzi scheme.” Convincing all parties that a business model can successfully produce profit and public benefit is, to say the least, an uphill battle.

The conversation is complicated by the fact that “social enterprise” encompasses a wide spectrum of activities, ranging from self-supporting business to hybrid ventures lodged in larger charities or NGOs. IIC is the former – what Grameen Bank founder Muhammad Yunus describes as a “social business.” This is perhaps the most challenging place along the spectrum to occupy, as it demands equal integration of business and mission – two categories that society is more comfortable keeping separate. Social entrepreneurs in this space must defend against a dual attack: private interests that question business viability, and public interests that question legitimacy and the corrupting influence of profit.

The challenge social entrepreneurs face is defying convention, and proving that financial and social value can coexist without one degrading the other.

It’s a challenge that IIC faces almost daily, as we grow our ranks of Professional Members and Nonprofit Partners. On surface, IIC appears to be no different than traditional philanthropy – professionals who have chosen to sacrifice a little profit to do a little good.

Yet IIC is fundamentally different from traditional philanthropy; it is a business development tool. IIC uses philanthropy to supplant existing, for-profit business development models – and produces more cost-effective, valuable, and socially beneficial results.

But the straightforward business value of IIC doesn’t make its social mission less legitimate. Rather, the business value of IIC is what strengthens and sustains its social mission.

IIC is an open platform that allows consumers to find professionals that meet their needs and share their values of social responsibility. It cultivates symbiotic relationships, in which consumers’ passion for nonprofit causes drives business to socially responsible professionals, and enables those professionals to generate unrestricted funding for those NGOs. IIC gives socially conscious consumers the power of the purse, while expanding business opportunities for socially conscious professionals, and creating a new zero-cost funding source for nonprofits everywhere.

It will take time, energy, and demonstrable success before social enterprise is widely accepted, understood, and taken seriously. But with each new Member, NGO Partner, and Friend IIC is bringing the message of shared value and public-private collaboration to a wider audience and pushing us one step closer to a world where social progress and private profit are not considered mutually exclusive.

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