Lesson: Disruption for Social Good with Renee Kaplan

Step #3 Convergence: Addressing issues with new urgency

I think we're at a real inflection point when it comes to the urgency of social problems. Now we're seeing a great convergence happening with corporations who see it not as doing good things and giving back to their community, but seeing a sense of urgency with their lines of business, with their supply chain. They may need water. They may need access to these incredible resources that the Earth is providing.

There is a convergence between corporate, government, and the social sector that's really exciting because there is a sense of urgency. Sadly, it's because there are so many grave problems that we all have to be working together to solve. No one sector is going to do it on their own. We're seeing that happen.

We're seeing when a really good innovation arises; that, for us, we have the perspective that social entrepreneurs are providing those groundbreaking innovations. When we see that partner with a corporate that applies that innovation in their supply chain and then the government can put regulatory policies in place that help accelerate that, we see great, tremendous social progress happen. It's exciting.

We see social entrepreneurs struggle with sustainability just like an entrepreneur does. In some cases, it's not just the financial component. It's the sustainability from constituent involvement or partnerships with government or corporations. Again, by design, they have to be working with a lot of partners in order for their innovation to really scale. They don't go in a room or design lab and come out with a great product and then launch it and it's out in the world.

For us, sustainability is key and it requires a different mindset from the beginning that's much more mindful of scale and adaptability and the kinds of different funding mechanisms that can be accessed, which is a real challenge right now.

I think there's a lot of opportunity right now to look at more creative ways to fund social entrepreneurs. I say that because you have traditional philanthropy foundations that typically give grants to nonprofits who are doing phenomenal work. Those grants may last a period of a couple years. They may be renewed. These grants are usually given for a period of time. It may be three years. It may be renewed after that time. But it's a designated period of time. There's an agreed upon set of metrics that the organization is on the hook to achieve.

That may work really well for a short period of time. Then once that grant period ends, that social entrepreneur or nonprofit has to start all over again and be continually looking for new funding. At a different foundation it may have a different approach. It may have different metrics. It may have different reporting mechanisms.

So it becomes really challenging if you're a social entrepreneur/CEO going out to try to raise money for your sustainable organization when you're having to wear different hats, having to constantly adjust your internal processes to map to the foundation or to the funder. That's different than the for-profit sector usually works. It's always a challenge to raise money.

But in the social sector, there's a huge opportunity for us to look at how we do that differently. Instead of saying, "Oh, we're only a nonprofit or this is only a for-profit," again, this social entrepreneurship hybrid in the middle can be, we may be able to do program-related investments. We may be able to do loans at lower interest rates that give the nonprofit or social entrepreneur much more flexibility in how they work their financial plans. We can also look at possibly for-profit investments if there's a hybrid model where they may have a technology that's really exciting that could be offered to the public that could fund the nonprofit side of what they're doing in their innovation.

For us at the Skoll Foundation, we kind of consider ourselves vehicle agnostic. A grant is, at the end of the day, a vehicle. A program-related investment or a loan is a vehicle. A for-profit impact investment is a vehicle. What we like to think about is where is the social impact? Where do we see the impact at the end of the day? What's the right financial vehicle that can help get us there and really try to be creative about how we approach that.