Social Entrepreneurs
I’m a corporate leader and a social entrepreneur. The startups I launched operate in commercial verticals. But my passion has always been to bring innovative approaches to socio-economic and environmental challenges faced by local economies.
Social entrepreneurs are motivated by the need to initiate net-positive outcomes in the world. We seek to improve peoples’ lives in tangible and sustainable ways. However, as social impact brands, we must do more than talk about how our businesses impact the world or the communities where we operate. We need data-driven metrics that verify the results discussed in our strategic plans.
“I thought business was about making money, and philanthropy was about changing the world. Now I think both can be used as methods for changing the world.”
Hedge fund manager Bill Ackman
Harvard Business Review
Making Money and Changing the World
Well-known social entrepreneurs include Muhammad Yunus, who founded Grameen Bank in Bangladesh in 1983. Yunus believed that everyone should have access to financial products. Grameen Bank provided affordable, small loans that would empower borrowers to become self-sufficient and move out of poverty. No collateral is required causing critics to predict the bank’s collapse. The metrics proved them wrong. 97% of borrowers repay their loans. Consumers gained financial independence, and the bank is fiscally successful. The results are measurable.
“Becoming an effective altruist enables you to have a solid basis for self-esteem on which you can feel your life was really worth living.”
Peter Singer TED Talk
What is the ROI?
Effective Altruism (EA) provides a perfect model for measuring social or environmental outcomes. Their ROI-based approach helps us move away from emotional-based decision-making to an impartial and objective model.
The Omidyar Network was founded in 2004 by Pierre Omidyar, who, with his wife, launched the online retail site eBay. Inspired by the effective altruism model, Omidyar funded several social impact startups, such as BRAC that provided microloans in Haiti, Africa, and Asia, and MicroEnsure, which provided insurance to economically disadvantaged people in developing countries
Pierre Omidyar’s founding goal was to “broaden the range of tools he could apply for social change.” He wanted to focus beyond grants to nonprofits and include “impact investments into mission-driven, for-profit companies.”
Since its founding, Omidyar Network has grown into a social impact powerhouse of innovators, business leaders, academics, and advocates. It operates as both an LLC and a nonprofit. Collectively, the network is tackling the world’s biggest problems. It has taken its vision of “… a world in which individuals have the social, economic, and democratic power to thrive” to its fullest potential. In 2019, Omidyar Network committed $735 million in for-profit investments and $839 million in nonprofit grants.
Scaling Your Impact
As social entrepreneurs, we not only want to scale our business operations, but we also want to scale our impact. Impactt Consulting, a marketing and strategy consulting firm, helps social entrepreneurs scale their impact on the world. Their vision is “to create a sustainable, prosperous and inclusive future for humanity through business.” The firm serves social impact brands that adhere to the effective altruism methodology of using evidence and reason to identify the most impactful ways to change the world.
Final Thoughts
These are the final days of 2020, a year most of us are happy to leave behind. The global economy has been disrupted, and some sectors may not recover. With so much need, it can be challenging to discern where and how we can do the greatest good in the world. If we use the effective altruism ROI-approach, the changes we make will be unique, sustainable, and measurable.
