In the early-mid 2000’s, and with continued fervour since then, ‘Social Enterprise’ and ‘Social Impact’ have become increasingly prevalent terms. Among a growing class of freshly-minted graduates and young professionals, interest in organizations that sought to improve social outcomes, while operating in a ‘different’ way from traditional NGOs, gained increasing currency and appeal.
The increased interest in driving social impact began to change the contours of graduate recruiting and academic programs. On the recruitment front, NGOs – and in particular – social enterprises began to see burgeoning interest in their organizations. On the academic front, schools began to see unprecedented interest in public sector challenges from students seeking to deepen their skill set for the private sector. For example, in 2012, 97 MBA students from Stanford graduated with a certificate in public management or social innovation, up from 37 in 1990.
Across this new vanguard seeking to drive social change, there was an unfettered hope in being able to drive impact, change lives and achieve unprecedented health, education and environmental outcomes. In other words, the children of the ‘80s and ‘90s wanted to drive change, and believed in their ability to do so.
This desire to drive change continues to this day.
Not taking it as Gospel
Yet, recently, among this group, there has also been an emerging and continued scepticism and criticism of Social Enterprise’s ability to sustainably deliver material change in a distinct and superior manner to the efforts of conventional charities.
Admittedly, if only from my anecdotal experience, many people who I know that have spent time ‘in the field’ – working for a social impact firm in the developing world for an extended time period – have begun to express a sense of disillusion.
The previously vaunted results of some social enterprises have failed to hold up under closer – on the ground – scrutiny. Previous exemplars of moral leadership were found to not be in line with legal requirements. ‘Sustainable’ social enterprises were in fact not sustainable without donations – an unexpected output from a model that was supposed to be different from conventional charities.
The ‘falling apart ‘ of the social enterprise story – of new models, new organizations and novel results – could no longer be taken as gospel.
Good news or bad news?
Thankfully, this scepticism is not necessarily a blight, but possibly a boon to the future of Social Impact. One of the results of this scepticism is a greater passion among development practitioners for operating with discipline – in particular, depending more on data and objective forms of evidence as a basis for the justified implementation of development initiatives.
The dissatisfaction among the ‘new nation’ of social entrepreneurs with the results of various initiatives was hardly divorced from the sentiments among the broader international development community. This desire for more “hard” evidence as a basis for different social interventions helped to spurn greater interest in practices like leveraging Randomized Control Trials (RCTs) in a development context. This has spurned insightful policy recommendations – in books like More than Good Intentions or Poor Economics – that help to identify a set of insights from RCTs that have been shown to, among other things, identify interventions that can improve the future earnings potential and livelihoods of children in the developing world.
If anything, the desire for better results has also bolstered passion for efforts to address social challenges with for-profit operational models – albeit, in a more unvarnished and transparent manner versus previous efforts. Given the added responsibility that Social Enterprises – versus other organizations – bear, this might not be such a bad thing.