The traditional social entrepreneur success story goes something like this:
An individual comes up with an idea, finds funders or investors, and launches said idea. They see a wild and timely return for investors, but also immediate social impact. Quickly, they replicate the model and expand the project.
While it’s a great story, it doesn’t happen so linearly for the majority of social entrepreneurs. Because each individual’s journey is subjective, in-sector support systems adjust to meet the different needs and goals of emerging leaders.
Each of these specific needs fall under four main categories:
- Financial support to launch the idea
- Exposure to make necessary connections and grow support
- Technical support to get the idea off the ground
- Solidarity support and fellowship with other entrepreneurs
Each category previously had a one-size-fits-all model, but the sector has evolved to offer different support within each category. Dive into the various support categories below and learn which ones are the best fit for you.
Traditional funding has taken place through investments in purely lucrative endeavors, or grants and donations for strictly social endeavors. The distinction between the two has been strong, until recently.
There are several interesting trends creating new hybrid models, including for-profit social businesses and business-savvy, sustainable nonprofits.
1. Long-Term Support
At the 2016 Collaborative, individuals from the Peery Foundation and Tipping Point Community discussed a shift that they see in the sector—one from short-term to long-term support. This looks different for each grant recipient, but the theory is the same: long-term financial relationships yield greater results and trust between funders and recipients. The one-time grant givers see that the financial needs of a social entrepreneur are more complex than a simple transactional fix.
2. Citizen-Based Financing
The traditional story of social entrepreneurs finding one, or several, formal funders and pitching them at an official event is not the only story being told. There are hundreds of platforms that allow for peer-to-peer lending through crowdfunding sites. The democratization of funding enables different types of entrepreneurs to find adequate sources to finance their ventures.
3. Personal Financial Support
Support does not have to simply come in the form of an investment or grant because there are other indirect ways to support social entrepreneurs’ work. Organizations such as Echoing Green and Ashoka grant stipends, or living wages, to their fellows so they can fully focus on their initiative without worrying about personal income while the venture is in early stage.
4. Hybrid Finance
One example of hybrid financing is a model called Pay for Success which has been used by governments in the form of Social Impact Bonds. Pay for Success encourages high-impact institutions and the private sector to increase social impact while simultaneously generating income for businesses and maximizing shareholder returns.
This creates a cycle in which high-performing organizations receive high-level investments to grow and generate bigger social impact. The key performance indicators are agreed upon before the contract is signed, and then the outcome payer (usually a foundation or development bank) will continue to fund the initiative as long as the measured, verified impact is there. They can also bring on investors after the initial period is complete.
More incubators and accelerators are popping up all over the world, but each has a different model and approach to support. These models are segmented, specialized, specific, and geared towards the needs of different social entrepreneurs. Below are a few trends among these models.
While most accelerators provide general support, an increasing number focus on specific industries, accepting ventures that are innovating specifically within healthcare, cybersecurity, traditional finance, or agriculture, to name a few.
Some accelerators, like Startup Bootcamp, provide support in different cities for different sectors. Then there are networks of accelerators with hundreds of different incubation models that allow entrepreneurs to search and compare before applying. The majority offer specialized mentorship, coworking space, and access to funders as well as support like graphic design, programming, or business model creation.
6. More Inclusive Models
While it never hurts to be featured in Forbes or the Times, there are increasingly more ways to put your name out there and get the contacts, money, or simple name recognition you need.
7. Social Media Followings
Whether you’ve just started an account or already have a decent number of followers, a strong social media presence and cohesive messaging across platforms allow you to reach and engage people. Not only is social media free to publish, it also lets you communicate directly with your most ardent supporters.
8. The Power of a Good Story
Examples like Invisible Children’s Kony 2012 campaign demonstrate that a well-told story can reach and resonate with millions of people. Platforms such as Upworthy were formed from the idea that one good story can start a movement. If you tell a good story, its impact can be enormous.
9. Industry-Specific Media Outlets
From the Stanford Social Innovation Review, to Fast Company, to the hundreds of podcasts out there, media outlets are constantly searching for new material. Research and pitch your story to these outlets.
10. Democratized Advertising Platforms
Through small investments in targeted marketing, you can get your ads in front of the right people. Facebook Ads and Google AdWords are the two most popular forms of low-cost (pay-per-click), high-return marketing channels for your organization.
Networks and Solidarity Support
What does community mean for a social entrepreneur? What kinds of mechanisms allow for real collaboration? An increasing number of networks are sprouting from incubation cohorts and innovation conferences, and online forums for social entrepreneurs are multiplying, but this category continues to evolve in order to encourage partnerships in new ways.
As one social entrepreneur says, “It can be a lonely place, thinking you’re the only one crazy enough to do something like this.” As an industry, we need to think harder about how to serve the social and existential needs of the social entrepreneur. As social entrepreneurs, we need to think about how to support one another.
It is entirely possible to make entrepreneurship a viable, attractive option for people wanting to do good in this world. But we can only do so by building inclusive mechanisms and a real community of mentors, colleagues, and collaborators who empower each other.
Connect with the best of the social sector at the Collaborative.
This is a guest post by Megan Christensen, the VP of Search at Watson University and a Classy Fellow alumnus. She came to Watson after a yearlong Fulbright fellowship in Mexico City during which she worked as the Venture Coordinator at Ashoka Mexico and Central America.