Tonight it's the launch of the RSA Social Entrepreneurs Network, and I'm actually rather looking forward to it. There's been a very interesting discussion on the group forum already about how social enterprise can reward the entrepreneurs behind it. Social enterprise is one of the fastest-growing sectors in our society, and I think it has a lot to teach the policy world, traditional charities and the commercial sector. The problem, as I see it, is this though: social enterprise is good at generating revenue through doing good, by selling products and services, delivering contracts for the public sector and so on. What it isn't so good at though, is looking after the people who make it happen. The sector suffers a lot of burn-outs, and many people who are starting successful social enterprises can only do so because they have made money in the commercial world, or because they are able to live cheaply without overheads like children or sick relatives. The sector is thriving, but at the expense of the people at the heart of it - and without the money from the lucrative public and private sectors, much of it wouldn't exist at all.
I think what's needed is greater liquidity in the social enterprise sector, which starts with making it easier for successful entrepreneurs to set up their next venture. Social capital is great, but it doesn't pay the bills while we work for free for a year raising funds and building brands. We need to make sure the people who have set up organisations with strong social impact get a return on their "sweat equity", or the sector will always be parasitic on the commercial world and dogged by burn-outs and drop-outs.
I think there are two obstacles to allowing this "liquidity" to happen. The first is the psychology around "non-profit": how can I as a social entrepreneur claim my financial reward when my project is based on goodwill and channelling profits back into the community? The second is structural: how can non-profits pay dividends on in-kind investment, in the way they pay a return on cash investments? Time invested for free in building an organisation should always be regarded as a loan, to be recouped with a reasonable return when the venture is successful. I don't want to be a millionnaire, I just don't want all my hard work to go unrewarded. And I think we need new corporate vehicles, and a new culture around money for good causes, to make this possible.
With Mindapples, my second social venture after School of Everything, I'm looking at ways to write in profit-shares and bonuses for founders and volunteers if we build a successful revenue model for our non-profit community organisation. Does anyone know any good examples out there of when this is done well that I could base our model on?