Seeking a Few Great Leaders
By Alfred Miller Wise, President, Community
Wealth Ventures
”The only test of leadership
is that somebody follows.”
--Robert K. Greenleaf
 Leaders drive change. Ideas, theories, or concepts alone are ephemeral.
Like a seed lacking soil, ideas simply can’t take root to drive change
unless they’re in the hands of a leader. The change can be grand or
prosaic. We can follow a bold vision for society or simply switch
brands. Ultimately society follows leaders.
This concept is central to our efforts to create market-based approaches
to drive social change: By investing time and energy in creating leaders
who run successful social enterprises, we will pave the path for other
nonprofit leaders to follow in their footsteps and move the sector
toward greater self-sustainability.
Our focus on helping visionary social change leaders build what Jim
Collins, in his monograph Good to Great in the Social Sectors,
calls their “resource engine” is driven by a fundamental belief that
solutions to social problems in this country do exist. Every day, we see
amazing, compassionate leaders providing true solutions to those in need
in the fields of mentoring, education, job training, and poverty relief.
But capital markets that help these leaders take their solutions to a
broader market or expand on their success are insufficient. The idea of
“community wealth,” or using business ventures or corporate alliances to
generate resources to promote social change, is a powerful engine for
many more of these nonprofit leaders than currently avail themselves of
it.
Our regional initiative, Community Wealth Collaboratives, is squarely
aimed at this theory of change and focuses on building market leaders.
We take eight highly entrepreneurial organizations in a region and help
them launch or grow ventures. While classes and workshops help build the
field of social enterprise, they alone do not create transformative
change. Think of the approach as a venture capital model vs. business
school. Both are important, but one invests significantly in building a
successful venture, and the other builds awareness.
For social enterprise to gain a better footing, there has to be a
critical mass of local executive directors with successful ventures who
can stand before their peers and proclaim how their organizations have
been transformed.
To date, Community Wealth Collaboratives—ten-month peer learning
initiatives that have taken place in six cities—have yielded a 74%
success rate. That is, of 57 nonprofit organizations in completed
Collaboratives, 42 have launched ventures with a projected $15 million
combined in initial annual revenues and significant mission-related
outcomes. Collaboratives have proven to be the most successful
incubators for social enterprise in the country.
As the enterprises developed in the Collaboratives grow, they will help
the organizations increase financial sustainability and expand their
mission reach. The objective is to create market leaders—successful
nonprofit organizations that have moved toward greater
self-sustainability through launching or scaling an enterprise.
Running a business certainly isn’t right for many organizations, but
with more than 1.2 million nonprofits in the country, all vying for
donations from those who participate in the economy, the competition to
get funding is more intense than ever. Now is the time for many more
nonprofits to also participate in the economy. Building this stronger
“resource engine” to help the right nonprofits move toward greater
self-sufficiency is a critical way to advance social change.
There are a handful of great examples of social enterprise leaders, such
as Housing Works, which provides housing and an array of services for
those living with HIV/AIDS in New York City, and Pioneer Human Services,
which provides a variety of social services in Seattle. Housing Works
generates more than 90% of its $10 million budget through thrift stores,
bookstore cafes, and other social enterprises. Pioneer Human Services
generates almost all of its $55 million budget through its enterprises.
Yet the field needs more leaders. Because the nonprofit community in the
U.S. is inherently regionally focused, it needs regional leaders.
Regional social enterprise successes, market leaders, are the fulcrum
that will create a true paradigm shift. And a shift is needed. Community
Wealth Ventures can be the most vociferous advocate of this change. We
can shout from mountaintops and we can inspire, but ultimately the
nonprofit leaders we support will be the true change agents. Moving
nonprofits from recipients of others’ generosity to participants in the
economy is a fundamental change.
The history of great business and social movements demonstrates that
unless in the hands of a leader, change simply doesn’t take root:
-
Franchising
had been around for over 150 years. (In 1851, the Singer Sewing
Machine Company began granting distribution franchises for its
sewing machines.) But franchising didn’t take off until two
leaders—Colonel Harland Sanders of Kentucky Fried Chicken, and Ray
Kroc of McDonald’s—started pushing the limits of what franchising
could do to expand business quickly and with quality control.
-
Muhammad Yunus, an economics teacher in Bangladesh 25 years ago, met
a woman who was stuck in poverty over a matter of cents. She made
bamboo stools but couldn’t afford to pay the equivalent of 20 U.S.
cents to buy the bamboo. She had to borrow the money from the bamboo
trader, and then sell her stools to him at a price he dictated.
Yunus made a loan to her and a small group of others in the village
so they could buy their own supplies and make a profit from their
wares. He was repaid in full. When bankers wouldn’t support these
workers, he started a bank. Grameen Bank now works in thousands of
villages in Bangladesh, lending about $500 million a year to almost
5 million borrowers.
Why mention Ray Kroc, Colonel Sanders, and Muhammad Yunus together?
Because each is a prime example of driving a sea change by leading:
Franchised businesses now generate jobs for more than 18 million
Americans and account for nearly 10 percent of the U.S. private-sector
economy. Microfinance, or credit for the poorest of the poor, has proven
to be such an effective weapon to fight poverty that it has grown to
reach over 92 million clients in the world, 72% of whom were among the
poorest people on the planet when they took their first loan and many of
whom have pulled themselves out of poverty.
We believe that social enterprise can also be the paradigm change that
fuels social change in this country. This is a long-term commitment. To
get there, we need to invest the appropriate time, energy and resources
to help grow more market leaders who will ignite regional change, paving
the way for other nonprofit leaders to follow.
» BACK TO
HOME
»
SUBSCRIBE TO COMMUNITY WEALTH VANGUARD |
