Civic Entrepreneurship

“The key was to remove as many barriers to social entrepreneurship as possible, and to provide some of the enablers where they were absent: finance, networks, support, and development, so that the other invisible hand could do its work.”
- Geoff Mulgan (Young Foundation)
 
Government plays multiple roles in education and in other areas, adding a level of complexity to reform. It can be an operator, as is usually the case in K–12, or it can be a purchaser of services, as in charter schools, mental health, drug treatment, homelessness, and more.
 
Government also acts as standard setter in these areas. Achieving the right standards, without allowing the process to be exploited by groups that may benefit from high barriers to entry or adding undue costs, is a challenge. The tension between what government must do to guarantee health, safety, and performance and what government actually does—in terms of prescribing activities and limiting entrepreneurship—provides the backdrop to this chapter.
 
Open and competitive sourcing of service provision and innovation requires incentives from both the supply side and the demand side. By “demand” we refer to those funders who configure the market by essentially purchasing social services for others and who could give clients more choices by forcing providers to respond to real client interests. Promoting innovation through the demand side involves complex challenges, because no leader controls all the parts or sufficient resources. Thus creating space for breakthrough change requires a leader whose credentials and rhetoric inspire a community around an important social goal and then, through the right combination of persuasion and forcefulness, cause it to occur…
 
In social services, barriers to success come in all shapes and sizes. The most egregious of them are over-regulation and bias toward government and a tendency to maintain the status quo. By committing to a range of client options among providers, innovative public officials have the power to mitigate policymakers’ and government funders’ practice of protecting incumbent providers and their associations. This calcification generally arises not from nefarious political plots but from relationships that develop over time and then serve to bar new entrants…

One sure way to limit innovation and choice is to set up a process biased against it. Not even hard-core trade protectionists would advocate allowing GM to decide how many cars Honda can sell or letting a North Carolina textile manufacturer decide how many shirts China can ship to the United States. Yet this is exactly the process often used in [social] services…

So how might community leaders open up space for breakthrough civic accomplishments? They can do so by promoting a culture of innovation, providing information and forcing transparency, sponsoring events that create opportunities for social discoveries, and offering protection for those whose efforts, whether successful or not, challenge the status quo.

In addition to these critical steps, public and private policy actors can catalyze innovation by strategically injecting new sources of funding. Such is the plan of President Obama and his Social Innovation Fund. Even after institutional, cultural, and legal barriers are removed, growth and impact require funding. What we might call catalytic capital helps fertilize new ideas that can in turn leverage other resources for better results. This catalytic capital can be private or public, from local or outside sources.

Excerpted from "The Power of Social Innovation: How Civic Entrepreneurs Ignite Community Networks for Good" by Stephen Goldsmith

The huge potential of [catalytic] inventions—and their universal appeal—struck me when I sat next to civic entrepreneur Martin Fisher at a dinner and listened to him explain his international program KickStart. Fisher unleashes entrepreneurship in communities by designing and selling new technologies that help people start their own businesses. His approach does not involve aid in the traditional sense. Fisher understands the important role that entrepreneurship plays in wealthy economies and believes that with help, “self-motivated private entrepreneurs” can play a similar role in developing economies.^[1]

Fisher and his partner Nick Moon began their discovery with a clear understanding that their target audience—the rural poor in Kenya—were predominantly (80 percent) small-scale farmers who made just enough to survive. They also established that although land and skills were abundant in Kenya, farming that relies on seasonal rain is prey to periods of overabundance and waste followed by periods of scarcity and hunger. Irrigation would allow small-scale farmers to “spread out the production of food to meet the demand, increase incomes, and sustainably reach food and income security.”^[2] Fisher and Moon used these discoveries to design and then manufacture and distribute effective, affordable ($34 and $100) foot pumps for drawing water from the ground. The farmer, with his own labor, pushes on the pump he has stuck into the ground to water his crops.

KickStart’s 135,000 pumps have helped latent entrepreneurs start up more than 88,000 businesses after the users grew enough crops not only to feed their families but also to become wholesalers. These enterprises lifted more than 440,000 people out of poverty in Kenya, Mali, Tanzania, and other countries.^[3]

KickStart, offering a one-year guarantee, underwrites the risk of the up-front capital for small-scale farmers to buy the foot pumps. Fisher and Moon anticipate that the market will eventually grow to the point where the industry will be profitable, attracting the private sector, without the need for any subsidy. Technology in this instance unlocks value by treating individuals as latent assets rather than victims. Individual ownership, coupled with changes in production systems, allows those in poverty to enjoy a better life… Fisher built his inventions after spending time and sharing experiences with the people who would subsequently benefit from the technology.

Demonstrating a commitment to improved performance, KickStart closely monitors its customers’ progress, allowing Fisher and Moon to continually adjust their product and marketing efforts.

Excerpted from "The Power of Social Innovation: How Civic Entrepreneurs Ignite Community Networks for Good" by Stephen Goldsmith

_{[1] Martin Fisher, e-mail message to author, June 25, 2009.
[2] Ibid.
[3] KickStart. “ About KickStart. ” KickStart, www.kickstart.org/what - we - do/impact/}
 

“To create significant and long-lasting changes, social entrepreneurs must understand and often alter the social system that creates and sustains the problems in the first place.”
- Gregory Dees (Duke University Center for the Advancement of Social Entrepreneurship)

…Civic entrepreneurs like [Communities in School’s Bill Milliken] make substantial contributions not only by replacing the outdated with the innovative, but equally often by adding a missing ingredient that ignites drastic change in programs and other assets already operating in the community—innovation as catalytic ingredient.

We begin by considering some approaches for acquiring the insight, experience, and data necessary to unearth the missing ingredient. The process of identifying what would trigger drastic improvements inside a social delivery system like public safety or education could follow one or more of four methods: civic discovery, system discovery, personal discovery, or predictive discovery.

CIVIC DISCOVERY
Survey the institutional assets in the community—service providers, faith-based, community groups, small businesses.

1. Utilize local resources like nonprofit leaders and frontline city employees.
2. Use mapping as an opportunity to build rapport with local civic leaders.
3. Include in planning the non-institutional assets like family and social networks.

SYSTEM DISCOVERY
Explore the relationships among actors inside the system, including barriers to entry.

1. Assess level of competition and diversity; is funding overly prescriptive and monopolistic?
2. Evaluate whether and by what measures strategies are deemed successful.
3. Determine if the system creates enough room for innovation.

PERSONAL DISCOVERY
Discover an intervention through listening, close observation, and personal experience.

1. Use this process to identify what drives individual issues and challenges.
2. Design highly nuanced responses.
3. Find innovators excluded or marginalized by the larger social policy actors.

PREDICTIVE DISCOVERY
Utilize decision-support or predictive-modeling systems to discern solutions in data.

1. Mine new and existing data sets to find trends and predict future needs.
2. Look to future data mining and analysis for more personalization.
3. Learn from examples in health care predicting referrals and reducing patient error rates.

Having identified the missing ingredient using one or more of these methods, civic entrepreneurs then invent or otherwise supply transformative interventions that fit into one of four categories: realignment of the existing players; technological or programmatic innovation; highly effective management; or new pipelines for community involvement…

While I focus primarily on civic interveners who develop a new structure or technology or pipeline, there is another option for providing the missing catalytic ingredient in a local delivery system: The civic entrepreneur can import rather than invent the solution. Education reform expert Michael Fullan writes, “The main problem is not the absence of innovation in schools, but rather the presence of too many disconnected, episodic, fragmented, superficially adorned projects.”^[1] 

Indeed, when the Knight Foundation first funded our Harvard Executive Session discussions, we set out to bring together some of the country’s most creative civic entrepreneurs. These attendees represented a dazzling array of interventions, yet often they had not heard of one another. They began to identify how components of one solution could add value to another. Innovation must, of course, remain dynamic, and it constantly benefits from access to new ideas—whether “invented here” or imported.
 

Excerpted from "The Power of Social Innovation: How Civic Entrepreneurs Ignite Community Networks for Good" by Stephen Goldsmith

_{[1] Michael Fullan. The New Meaning of Educational Change. New York: Teachers College Press, 2001.}

 

The civic entrepreneurs with whom we spoke struggle to take their working solutions to a scale that causes systemic change. Social progress requires that they overcome built-in barriers to transform the delivery systems in which they are operating. We explore the links between innovation, entrepreneurship, and social change. Specifically, we wanted to learn how to help civic entrepreneurs successfully catalyze broader change.

Our view of the social production system in a typical community is represented in this figure below, “Vortex of Social Change.”

_{The above diagram represents the book’s theory of change. The actors in the two outside circles—both service providers on the right and market makers on the left—can catalyze change among all the actors by employing one or more of the strategies depicted in the inner circle.}
 
Outside the “Local” circle, which represents the local community, national actors assert influence that affects local conditions and responses. These outside actors include private funders such as national foundations and large corporations; national advocacy organizations, interest groups, and professional associations; national nonprofit innovators; and federal or state funding agencies.

The organizations inside the “Local” circle represent local players who can push for or impede a transformative solution. These local actors include private funders such as local philanthropists and community foundations; grassroots associations and interest groups; longtime civic institutions like the United Way, school officials and nonprofit providers; the mayor or other elected officials; and local civic entrepreneurs from all corners.

A host of forces operate on a community’s social service delivery structure—few of which argue for change. The tendency to resist disruptive change does not result from a nefarious political conspiracy. Rather, it is the natural result of a system in which one closely tied group of individuals—philanthropic and government funders—makes decisions for another group—citizens in need. Yet an impassioned person with an appealing vision can act as a catalyst. The center circle in the figure represents the civic reaction—the disruption and eventual transformation of the existing system triggered by civic entrepreneurship that produces more social good…

We consider market makers to be those organizations or principles that catalyze change and create the conditions for broad community solutions. They do this through programmatic and policy advocacy, funding, and rule setting that can source new providers who focus on results. Sometimes the conditions bring in new actors; other times the market makers clear the way for new arrangements of existing providers. Community leaders, grassroots organizations, and public officials promote entrepreneurship in their communities when they create environments of continuing innovation, challenge the very definition of public value, and exhibit a willingness to challenge the status quo.

Service providers engage in civic entrepreneurship as champions of a particular innovation, driving its design or identification as well as its adoption across a delivery system. The lessons that guide these champions of innovation include a mobilization of public will and political capital to demand results and change, a willingness to assume risk, and a delivery model that increases expectations of individual potential and responsibility.

We consider both market makers and service providers to be potential entrepreneurs and note that the levers of change they utilize are sometimes the same and sometimes quite different. Yet the lessons from both groups are essential to entrepreneurial communities and also to entrepreneurial organizations.

Excerpted from "The Power of Social Innovation: How Civic Entrepreneurs Ignite Community Networks for Good" by Stephen Goldsmith

[While mayor of Indianapolis] I engaged in a ten-year battle with the independent school board—and the even more independent school bureaucracy—to reform the city’s public school system. Despite tens of millions of dollars of social programming and countless hours of professional and volunteer service, we could claim nothing but consistently awful results.

Many years later the issue popped up again with a call from the respected innovator J.B. Schramm, whom I knew from my work as chairman of CNCS [the Corporation for National and Community Service]. Schramm, the inventor of the College Summit program, wanted my advice in his effort to bring the program to Indianapolis. College Summit claimed it could help generate enough change to improve the city’s dismal high school graduation rates (at that time less than one-third for young men of color).^[1]  I knew Schramm was succeeding in other cities and assumed he could change the future trajectory for many Indy students.

The story of how College Summit ended up in Indianapolis provides hope not only for the city’s youth, but also for thousands of Americans who aspire to make a transformative difference in their communities and in the country. Just after Schramm graduated from divinity school in 1990, he started tutoring students at a teen center in a low-income housing project in Washington, D.C., in the hope that they would pursue higher education. Over and over, Schramm watched capable students fail to matriculate to college for lack of the institutional and family support and social networks available to most middle-class youth.

Like other entrepreneurs, Schramm brought a fresh perspective to a problem others viewed and accepted as familiar. He saw individuals who had potential that could be fulfilled once barriers were removed. Schramm took a new approach to preparing his students for college. He hired a writing instructor and provided other transitional and life supports. And his protégés succeeded. From there, Schramm launched College Summit, which by 2008 had helped 35,000 high school students in ten states.^[2]

Today civic entrepreneurs, armed with innovative thinking, a bottom-line sensibility, and a willingness to tackle some of the nation’s most intractable social problems, are tapping into a powerful energy and sense of purpose. This growing cadre of change agents is shattering traditional policy approaches and replacing them with creative solutions and unique partnerships to produce dramatic results.

Yet serious questions must be addressed. How do promising new interventions like College Summit ever flourish in a social service model dominated by top-down approaches, prescriptive government funding, and relationships that all conspire to resist or slow change?

…Innovations in social problem solving offer more cause for hope and optimism than ever before—but only if they disrupt or transform an underperforming system for solving social problems.

These important lessons led me to wonder how we can identify, nurture, and then grow the innovations invented or championed by the J. B. Schramms across the country in a manner which, collectively, creates enough lift for truly transformative social change.

Excerpted from "The Power of Social Innovation: How Civic Entrepreneurs Ignite Community Networks for Good" by Stephen Goldsmith

[1] Christopher B. Swanson. “ Cities in Crisis: A Special Analytic Report on High School Graduation. ” Editorial Projects in Education Research Center, prepared with support
from America ’ s Promise Alliance and the Bill and Melinda Gates Foundation, April 1, 2008.

[2] College Summit. “ Results and Metrics. ” College Summit, www.collegesummit.org/aboutus/results_and_metrics/our_reach_and_growth.

I have an almost complete disregard of precedent, and a faith in the possibility of something better. It irritates me to be told how things have always been done. I defy the tyranny of precedent. I go for anything new that might improve the past.”
- Clara Barton (American Red Cross)

Although there is little consensus on an exact definition of social entrepreneurship, I view it much as Roger Martin and the Skoll Foundation’s Sally Osberg do. They define social entrepreneurs as those who identify and then challenge—with inspiration, creativity, direct action, and courage—an unjust “stable state’s equilibrium.”^[1]  These social entrepreneurs share passion, a focus on outcomes and impact that leverages other resources, a sound business model, and high expectations for not only themselves but also their clients.

Early on, many of us involved in these fields mistakenly hoped that a good organization or idea would naturally grow to scale—in the same way that commercial product innovations such as cell phones and low-cost airlines grew to transform their respective industries—without worrying too much about how. Over time I realized not only the extent of the obstacles preventing diffusion of a good idea, but that real change requires more than scaling a single organization. These discoveries led us to focus on civic entrepreneurship.

In most of the areas where social entrepreneurs are working, no markets exist. The individuals whom we are trying to serve do not have the money to buy needed services; thus someone else pays for them. Thus the start-up capital sufficient to prove a concept will not produce the broad growth needed for transformative change to scale.

Invariably, philanthropic and social investors rely on an exit strategy that looks to government as the sector that will eventually sustain an organization’s growth. As a result, an idea’s ability to grow depends on both government and the existing web of providers, funders, and politicians who have a stake in the status quo. In fact, in the areas in which social entrepreneurs operate (e.g., education, health, poverty reduction, social services, services to children and families, economic development of poor neighborhoods, low- income housing), government—its overall policies, financing, and regulation of suppliers—is the dominant force. In many of these areas, such as K–12 education, tax dollars represent most of the total spending—sometimes exceeding 90 percent.

Blaming government as the primary obstacle to progress, however, misses the mark. Comic strip character Pogo put it clearly when he said, “We have met the enemy and he is us.” Existing providers and their boards, staffs, directors, and sometimes clients lobby funders—whether private or public—to increase support of their efforts regardless of results. As Mayer Zald and Roberta Ash demonstrate, organizations naturally move through stages over time: “goal transformation, a shift to organizational maintenance, and oligarchization.”^[2]  In other words the passion that produced yesterday’s transformative innovation migrates over to sustaining the organization—which in turn precipitates an effort to raise barriers to entry for potential competitors. This evolution tends to calcify the system, making it difficult to redirect a community’s scarce resources to bold new interventions and players. Simply adding new innovations on a stable base of mediocrity cannot produce social transformation.

Thus, in this book we focus on a concept that overlaps social entrepreneurship: “civic entrepreneurship.” Doug Henton describes civic entrepreneurship as helping communities develop and organize their economic assets and build productive, resilient relationships across the public, private, and civil sectors. To Henton, the term “combines two important American traditions: entrepreneurship—the spirit of enterprise, and civic virtue—the spirit of community.”^[3] We use the term intentionally to underscore one of our major assumptions: that a leader in any sector can spark innovation and social progress. This definition incorporates, but is not limited to, the traditional understanding of social entrepreneurship as nonprofit or for-profit endeavors with a social mission. It also includes those who enable and champion progress by providing the necessary fodder for innovation and change. To us, civic entrepreneurship represents both the spirit of change and the spirit of community.

<sup>Excerpted from "The Power of Social Innovation: How Civic Entrepreneurs Ignite Community Networks for Good" by Stephen Goldsmith

[1] Roger L. Martin and Sally Osberg. “Social Entrepreneurship: The Case for Definition.” Stanford Social Innovation Review, Spring 2007.

[2] Mayer N. Zald and Roberta Ash. “ Social Movement Organizations: Growth, Decay, and Change. ” Social Forces, March 1966, 44 (3), 327 – 341.

[3]  Douglas Henton, John Melville, and Kimberly Walesh, “Civic Entrepreneurs: Economic Professional as Collaborative Leader.” Community Economics Newsletter, 269 (March 1999), from Center for Community Economic Development; Community, Natural Resource and Economic Development Programs; and University of Wisconsin -
Extension, Cooperative Extension Service. Available online at www.aae.wisc.edu/pubs/cenews/docs/ce269.txt.</sup>