Socialenterpriseblog.com

The Chronicle of Philanthropy reported that the White House Web site now lists an Office of Social Innovation (without a formal public annoucnement).  The article quotes several members of Mr. Obama’s transition team (including Echoing Green President Cheryl Dorsey) about the details of this office.  According the article:

A White House office “would leverage the president’s platform to highlight the importance of relying on social entrepreneurs and nonprofits to solve social problems where both the private sector and government have failed,” Ms. Jolin wrote in the journal Stanford Social Innovation Review last spring.

The office, she added, would oversee efforts to direct government money to help nonprofit leaders experiment, expand approaches that work, and help charities collect data and evaluate whether they are making a difference. While President Obama proposed during the campaign the creation of a Social Entrepreneurship Agency in the Corporation for National and Community Service, the federal national-service agency, Ms. Jolin argues that putting an office in the White House “elevates it as a priority.”

I am interested in inquiring how much interest there is in setting up an alternative capital market working group for social enterprise. The purpose of the group would be to assess the over all industry support such an effort. The 2008’ Social Enterprise Alliance (SEA) convention put a lot of interest in creating capital markets for social enterprise but I have been unable to pin down the real point person in charge.

I have a complete proposal as well as a dedicated website with specialized educational content for educating SEA members on these specialized methods of forming capital. Who out there would like to join in on this effort or possibly offer some contacts with an affinity?

Yunus says business schools should start turning out social-business MBAs trained in creating social returns: “People say, ‘Don’t be stupid.’ I say there are a lot of stupid people like me. I don’t want to make money. Lots of young people don’t want to make money, just because their mother, their father made so much money. They don’t know what to do with their lives. There are many such kids in the U.S.  They don’t have any challenge left. Give them the challenge: Fix the world. Create a social business enterprise.”

Increased foreign direct investment into developing economies could become a very effective poverty intervention strategy. Microfinance institutions (MFIs) would be the logical place to locate these investments. This is because presently, the resources available from multilateral and private donor agencies will never be sufficient to satisfy the demand for Microfinance capacity development.

Agents of social change and other stakeholders in the field of microfinance have debated for years on how to increase the financial liquidity of MFIs thereby increasing their capacity to lend to the poor. What factors would need to be present in order to facilitate the wholesale buying and selling of microfinance securitized loan portfolios in the world capital markets? What role should a global peer-based professional organization play in bringing about this possibility?

A peer-based professional association could help set new financial statement transparency standards for MFIs by encouraging the use of “cost-accessible” financial reporting for MFI practitioners using XBRL.

This author advocates a peer-based professional organization promoting the development of XBRL taxonomies (eXtensible Business Reporting Language). XBRL is an internet-based financial reporting protocol that could ultimately serve to boost the financial liquidity of MFIs. By boosting the financial transparency of MFIs with XBRL reporting, it would thus would in turn enhance the possibility of a secondary trading market place for MFI securitized loan portfolios.

A secondary market trading market for Microfinance securitized loan portfolios assumes that outside investors are able to easily evaluate the financial strength of MFIs and track their performance through standardized reporting protocols. The development of XBRL taxonomies for Microfinance institutions can play a major role bringing about this possibility. Advances cannot occur without a single unified voice advocating MFI financial transparency.

Wars, natural disasters, and rising energy costs have recently created large federal budget deficits. These deficits have led to reductions in public spending at all levels. The same events have also overwhelmed donors and created donor fatigue. This has led to reductions in private contributions for many causes. These declines in the traditional sources of income for not-for-profit organizations have created a need to develop new sources of income

Mr. Romano will discuss 509(a)(3) Supporting Organizations as defined in the IRS regulations. These are earned income subsidiaries, who generate non-taxable business income on the basis of their purpose to the supporting a non-profit parent, albeit separate mission structurally from the parent nonprofit organization. Often times this requires board member inter-locking between the two organizations

Social entrepreneurs are reformers and revolutionaries, but with a social mission. They make fundamental changes in the way things are done in the social sector. Their visions are bold. They attack the underlying causes of problems, rather than simply treating symptoms. They often reduce needs rather than just meeting them. They seek to create systemic changes and sustainable improvements. Though they may act locally, their actions have the potential to stimulate global improvements in their chosen arenas, whether that is education, health care, economic development, the environment, the arts, or any other social field.

John K. Romano (facilitator)

Is the executive director of the International Open Finance Association Inc. a 501 (C) (3) organization which has been involved in Social Entrepreneurship for over five years. He is also the moderator of the socialenterpriseblog.com His 3 hour workshop gives other nonprofits guidance on how to start a “for profit” business in order to finance “a non-profit” cause. After all, non-profit is really a legal status not a business strategy!

Date: November 8th The number to call is: 712-432-3900; when prompted press conference access code - 3326790 and then hit the “#” sign the call is free to cell phone users, otherwise normal long distance phone charges will apply.

The Stanford Social Review defined Social Entrepreneurship as having the following three components: (1) identifying a stable but inherently unjust equilibrium which causes the exclusion, marginalization, or suffering of a segment of humanity that lacks the financial means or political clout to achieve any transformative benefit on is own. (2) identifying an opportunity in this unjust equilibrium, and developing a social value proposition, plus bringing to bear inspiration, creativity, direct action, courage, and fortitude, thereby challenging the stable hegemony; and (3) forging a new, stable equilibrium that releases trapped potential or alleviates the suffering of the targeted group, and through imitation and creation of a stable ecosystem around the new equilibrium ensuring a better future for the targeted group and even society at large.

I would be very interested in hearing some more thoughts from others on this definition of what Social Entrepreneurship is, and perhaps sharing what they are in particular are doing in the rapidly growing field of Social Entrepreneurship. Please post your thoughts here.