Rediscovering SocialInnovation

Jim PhillsThe Fieldstone Foundation

San Diego GrantmakersMay 7-8, 2009

Rediscovering Social Innovation

The Proliferation of “Social” Stuff

• Penetration of business ideas, managementpractices, and market principles into the worldof and nonprofits and government

• Juxtaposing private sector concepts with theword “social” as a modifier– social entrepreneurship– social enterprise– social venture– social capitalist– social innovation

Limitations of Social Entrepreneurship

• The Parable of the three blind men andthe elephant

This Is Social Entrepreneurship

Limitations of Social Entrepreneurship

• Can the Nobel prize Committee be wrong?– Muhammad Yunus– Grameen Bank– Microfinance

Limitations of Social Entrepreneurship

SocialInnovation

SocialEntrepreneurship

Social EnterpriseSocial Ventures

Social CapitalMarket

The Big Picture

Limitations of Social Entrepreneurship

• Focus on individual level attributes &traits– Boldness, accountability, and risk-taking

• Emphasizes the creation of neworganizations

• Typically limited to nonprofit entities

Limitations of Social Entrepreneurship

• But isn’t focus a good thing?• In this instance, No! because…

– Underlying concern is the creation of socialvalue by solving social problems

– Social entrepreneurship is not the only, andcertainly not always the best way to achievethese goals

The Meaning of Social Innovation

• “Innovation”– Novelty– Performance improvement– Magnitude– Implementation/Adoption

The Meaning of Social Innovation

• “Social”– Social needs or problems– Social value– Balance in creation and capture of value

favors the public

The Meaning of Social Innovation

• Any novel and useful solution to a socialneed or problem, that is better thanexisting approaches (i.e., more effective,efficient, sustainable, or just) and forwhich the value created (benefits)accrues primarily to society as a wholerather than private individuals

Examples of Social Innovation

• Microfinance• Fair Trade Products

Mechanisms of Social Innovation

• Exchange of ideas and values between public, private,and nonprofit sectors– Socially Responsible Investing

• Shifting roles and relationships between businessgovernment and nonprofits– Emissions Trading

• Blending of market-based principles and mechanismswith public and philanthropic support.– Affordable home ownership and secondary mortgage market

“Dissolving Boundaries”

Implications For Thought Leaders

• Develop conceptions of the phenomenonthat are clear and precise

• Distinguishing the processes throughwhich social innovations emerge, diffuse,and succeed (or fail)– These need to be seen as distinct rather than

conflated with our definitions

Implications For Context Shapers

• Nurture and support policies andpractices that foster the flow of ideas,values, capital, and talent across sectorboundaries– “Dissolving boundaries”

Implications For Social Innovators

• Importance of understanding, embracing,and leveraging these cross-sectordynamics and interaction

Postscript: A Victory for SocialInnovation

• President Obama’s Office of SocialInnovation

• Congress’ Edward M. Kennedy ServeAmerica Act 31 March 2009– Social Innovation Funds Pilot Program

Congressional Social Innovation Fund

• Objectives– Leverag[ing] Federal investments to increase State,

local, business, and philanthropic resources toreplicate and expand proven solutions.

– Increas[ing] private and public investment [to] allow[effective] organizations to replicate and expandproven initiatives or support new initiatives;

– Seeding experimental initiatives focused onimproving outcomes

– Strengthen[ing] the infrastructure to identify, investin, replicate, and expand initiatives with effectivesolutions to national and local challenges.

Some Friendly Amendments

• Social innovation fund, explicitly limits itsscope to " social entrepreneurs and other[italics added] nonprofit communityorganizations”

• This constrains the sources and kinds ofinnovative solutions to social problemswe can produce

Some Friendly Amendments

• There are those who believe that socialentrepreneurs should by definition be nonprofit.I don’t share that view. Many people intraditional larger nonprofits have taken offenseat the notion that you are a social entrepreneuronly if you’re new. In truth, a lot of people havecommitted themselves to social change andhave done great work. They should all becelebrated and seen as partners in the largerstruggle.

– David Gergen, in SSIR September 2009

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