Promoting Social Entrepreneurship: A Conversation with Greg Dees

Today we hosted an intimate session with Professor Greg Dees, founding faculty director of the Center for the Advancement of Social Entrepreneurship and an adjunct professor at Duke University’s Fuqua School of Business. Greg is the foremost academic on topics of social enterprise and social entrepreneurship, and was visiting Toronto to take part in Rotman’s Corporate Citizenship Speaker Series. We were thrilled when agreed to participate in an intimate conversation in our space with a dozen or so colleagues and friends.

There were a few things that struck me about Greg’s observations. During the Rotman event, he showed a slide that illustrated how nonprofits and for-profits differ in their access to and use of resources such as labour and capital. Social enterprise, quite naturally, sat in the middle. Several models of this spectrum exist. But what was unique was how Greg referred to the way in which organizations can move through spectrum over time.

This was quite intriguing because the Centre for Social Innovation is itself undergoing this type of movement. The Centre initially depended on donations and grants to get off the ground and to maintain operations. But over time we have become increasingly self-sufficient. We are now generating enough revenue to cover our operational costs. We have also secured debt financing to help us through last year’s expansion, rather than relying exclusively on grant money. I think this is a really informative observation. Like most business, emerging social enterprises struggle to find their feet in their early years. But funders should not perceive this as an indication of ongoing need and dependence. Core support during early stages may be the critical ingredient to foster the growth of independent social enterprises that can survive within the marketplace.

This morning was a lively exchange. There was a question or comment about the inevitability of the blending of the nonprofit and for-profit worlds. I think it is quite common in our sector to anticipate (and hope for!) such an occurrence. But Greg pointed out that the fundamental structure of corporations – their financial imperative vis a vis shareholders – precludes such a complete transformation. This is why CSR or community granting are as much about building brand and image as they are about making a positive impact (i.e., ultimately serving shareholder interests). For me, this really emphasized the pre-imminent role of structure. New for-profit structures that adhere to a quadruple bottom-line are starting – and will continue - to appear. And new blended organizations like social enterprises will evolve. But the expectation that existing mega-corporations will transform into institutions that give the same weight to social, cultural, and environmental goals as they do to economic goals may be naïve or simply misplaced. It seems more likely that new institutions will exhibit these characteristics than it is that existing institutions will be transformed. I think those of us who have tried to shift organizational cultures can attest to how difficult it is to effect changes in organizational culture and systems once they have become has ossified. That said, I suspect new strategies for transforming existing corporations will appear, such as the B Corporation, which I learned about at our session. It will be interesting to see how initiatives like this evolve in the coming years…and what new social entrepreneurs have up their sleeves to facilitate this transformation.