Citing the model of City Year and the success of AmeriCorps as examples, two think tanks call for a new 
White House Office of Social Entrepreneurship.
The Center for American Progress Action Fund, with the New Democracy Project, will release a book in January that aims to help with President Barack Obama’s transition, “steering the government in a new, more progressive direction.”
Writing in Change For America, A Progressive Blue-Print for the 44th President, Michele Jolin explains that “The new president will take office with ambitious goals to solve our nation’s most urgent social problems, but he will be operating in a climate with limited tolerance for new government spending or government-only solutions.”
An office of social entrepreneurship in the White House — not at the Corporation for National and Community Service as has been mentioned — would establish a “policy environment that over the long term fosters new entrepreneurship, improves nonprofits’ access to growth capital, and removes outdated tax and regulatory barriers to innovation.”
Acknowledging the vital importance of the nonprofit sector — part of the private sector, and responsible for innovation and service that fall off the radar screen of government and corporations — Jolin goes onto identify specifically the social entrepreneurs of the sector who lead by example:
Within this vital and growing non-profit sector, “social entrepreneurs” — individuals who have developed system-changing solutions to solve serious social problems—are playing a unique role. Leading social entrepreneurs such as Geoffrey Canada of Harlem Children’s Zone, which provides comprehensive support to low-income children in New York’s toughest neighborhoods, and Nobel Prize–winning Muhammad Yunus of the Grameen Bank, which is the world’s most famous microlender, have developed innovative models that are reorienting the way philanthropists, the private sector, and—increasingly— policymakers address intractable problems.
Nonprofits, nimble and resourceful, can take risks and work out program models that — if successful — can be and have been successfully adpated and adopted by governments.
…the non-profit sector can be a source of innovation and experimentation, and serve as a testing ground for these new ideas. The federal government has adapted a number of successful non-profit approaches into full-scale programs. City Year’s national service successes led to AmeriCorps, for example, and a federal appropriation expanded YouthBuild into a national government program in 1993.
The cost-effective private-public partnership that is AmeriCorps has been central to the discussion of building bi-partisan support for national service.
John Podesta, Obama’s transition chief, is on leave from the Center for American Progress. To read more about the context of the recommendations, read The Chronicle of Philanthropy article.
Download the whole chapter “A New Office of Social Entrepreneurship” (PDF) from the book. See nine other chapters.
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I was looking on the web today searching for information about the White House Office of Social Entrepreneurship and came across your blog. I actually considered applying for the job as director of such an office and was looking to see if it had actually been established and who if anyone would be taking the lead there. As such I’ve read your entry here with great interest. I’ve been an entrepreneur for most of my life. I started my first business when I was 26 years old. Ran that company for more than 20 years and in the midst started or helped start a few others. I am now in the financial services business and squarely focused on the issues of social entrepreneurship. One thing that I think needs to be addressed in this arena is the default notion that Social businesses 1: are always small businesses and 2: Need necessarily be somehow outside of the business of maximizing financial profits. My colleagues and I are currently developing an investment fund that aims to identify and invest in businesses that operate from what we call a “multi-stakeholder” mindset. That means that we look for businesses that understand how a myopic focus on shareholders often sacrifices long-term health on the alter of short-term profits, and that a focus on core stakeholders; employees who give their precious time and energy, customers who are the life-blood of all organizations, communities that give them license to operate, suppliers who fuel their production cycle; actually increases the rewards for shareholders over the long-term. The interesting thing about multi-stakeholder focused companies is that they become “Social-enterprises” by default. If a company is focused on caring for all its stakeholders they have no choice but to seek ways to provide a broader set of benefits than “just” profit for shareholders. This concept is what has been labeled the “fourth generation” of sustainability. It’s a holistic mindset that understands that sustainability MUST be about continuous environmental, social, cultural AND economic re-birth if it is to be a true model of sustainability. We’ve come to encapsulate this notion in an idea that looks to focus the energies of businesses and non-profit organizations alike: It’s the idea that these two types of entities need to start looking more alike than different: For profit businesses need to understand that focusing on profit, for profits’ sake is not a sustainable business model. Massive societal forces are at play, both cultural and economic, that demand businesses enterprises of all sizes take a greater role in the betterment of society. Those businesses that miss this shift in the zeitgeist will be left behind in the future as customers defect because of harmful practices, employees look for more engaging places to work, suppliers bring their best ideas to the more humane partners and communities, wary of unsustainable practices erect barriers to entry. At the same time, not-for-profit organizations need to understand that “profit” is not a dirty word and that they can best serve their social goals by creating a “sustainable” flow of internal capital. Put simply while we believe in philanthropy, we also believe that relying ONLY on the kindness of strangers in the new financial reality is a recipe for disaster.
As you can then imagine I’m not a big fan of the L3C concept. Low profit doesn’t assist in sustainability. I think we need to set aside the moral objection to making money and understand that there is a new paradigm of business that allows for a “both-and” scenario where businesses can do good and do well simultaneously. Some people will read this post and accuse me of being the proverbial “wolf in sheep’s clothing.” The interesting thing is that this barb is hoist from both sides of the debate; “pure” capitalists often accuse us of being naïve, not understanding the real world, trying to focus businesses on things that are outside of the bailiwick of business activities. We get lumped into the Socially Responsible crowd which many capitalist see as business “lite”. On the other hand the Socially Responsible crowd accuses us of not being pure enough; we’re really just using this movement as a way to show companies how to exploit it for profit and we don’t really care about the social outcomes. How can we when “everybody” knows that you need to sacrifice profits if you intend to use your business as a vehicle for social good. The mere fact that we’re criticized from both sides helps me know that we’re on the right track. But we also come to this position honestly as we’ve been proponents of the concept of Polarity Management for most of our careers. Polarity Management suggests that most of life’s complex issues are not really problems that lend themselves to an either / or solution. Rather they are polarities that must be managed from a both / and mindset. Maximizing profit and doing social good are often seen as two opposing poles in an equation of choice. Selecting either one has an upside and a downside. If we decide to maximize profits we can’t focus on the social repercussions of our decisions. Our job is to maximize the return for our shareholders and once they have realized those gains, they can deploy that money if they like to do social good. On the other pole, if we choose to use our business as a vehicle for social good, profits are a secondary consideration. Our shareholders understand that we may spend some of their money on social issues or make decisions that will limit their potential returns. We believe that the multi-stakeholder model provides a framework to eliminate this false choice. It gives management the tools to realize the upside of both poles, an extremely profitable business that serves the broader social context. The true definition of a “social” “enterprise.”