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SOCIAL ENTERPRISE: THE INTERSECTION OF BUSINESS, GOVERNMENT AND CIVIL SOCIETY

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April 19, 2011

Executives from Bank of America, Booz Allen Hamilton, the US State Department, and nonprofit KaBoom! held a lively debate about Social Enterprise: The Intersection of Business, Government and Civil Society, marking Georgetown’s McDonough School of Business introduction of its Global Social Enterprise Initiative (GSEI). GSEI also announced its first partnership — Bank of America and the Bank of America Charitable Foundation invested $1 million in the Initiative. Through this partnership, McDonough’s GSEI and Bank of America will co-host an annual symposium and engage in other activities focused on economic growth and job creation.

Opening Remarks

McDonough’s Dean George Daly began the event by describing Georgetown’s long Jesuit tradition of men and women for the service of others. At McDonough, he said, service for others takes a business approach — using business leadership to affect lasting social change. Professor Bill Novelli, the Initiative’s founder, defined social enterprise at Georgetown as the “leadership and management of social purpose undertakings in corporations, government and nonprofits to create social and economic value for large-scale, long-term change.” Collaboration across sectors is imperative, said Novelli, to create a sustainable impact around any social issue. GSEI will collaborate with other elements of the University to develop best practices and advance research, teaching, outreach, and creative problem-solving in global health and well being, responsible investing, economic growth and financial security, clean-tech energy and environment, and international development.

James Mahoney, Global Public Policy and Corporate Communications Executive at Bank of America, announced Bank of America’s partnership with the Global Social Enterprise Initiative. He emphasized the importance of cross sector collaboration, and highlighted the importance of corporations effectively communicating socially responsible efforts both internally and externally to the public, government officials and to other partners in the business and nonprofit sectors.

Panel Discussion

Professor Novelli asked how social enterprise was working within each panelist’s organization, the future of social enterprise, and best practices.

James Mahoney – Global Public Policy and Corporate Communications Executive, Bank of America Social responsibility is a critical business aspect at the highest levels of many organizations, including at the CEO level at Bank of America. Customers should feel as though they are affiliated with the right type of company. As a result, Bank of America is undertaking corporate social responsibility (CSR) efforts based on feedback from their customers. The recent economic recession has caused great uncertainty for customers and Bank of America is responding accordingly to invest in job creation and growth.

In general, CSR is here to stay. The free markets will ultimately drive the need forcorporations and other organizations to engage actively in socially responsible activities. As a result, firms must find ways to ensure CSR activities have a direct impact on a corporation’s bottom line.

Jim Thompson, Deputy Special Representative for Global Partnerships at the U.S. Department of State “CSR is Dead. Long Live CSR!” Jim Thompson summed up the evolution of CSR and said it is no longer just about philanthropy or charity. Rather, organizations must invest for impact. Organizations across all sectors will be collaborating to create more sustainable social impact. Specifically in international development issues, Mr. Thompson pointed to government collaboration with YouTube whereby youth from around the world uploaded videos identifying “what democracy means to me” as well as a program called Partners for a New Beginning, a cross-sector collaboration that promotes investment in politically challenging regions. He said that Secretary of State Clinton was aware and leading the way in these endeavors.

Darell Hammond – CEO, KaBOOM!

Social problems don’t arise from just one sector, and neither will the solutions. Mr. Hammond asserted that in the U.S., we have built silos around our sectors, and that we need horizontal connections to create solutions. Therefore, we will no longer define our identities based on the sectors in which we work. Rather, individuals should focus on identifying a cause or an issue for which they want to create a solution, and span across sectors to ensure success. Individuals should have loyalty to an issue, not a firm or other organization.

Reggie Van Lee – Executive Vice President, Booz Allen Hamilton

Mr. Van Lee spoke specifically about his company’s Megacommunities approach, which was initially pursued to study sustainable globalization. He said that leaders of government, business, and nonprofit sectors can coalesce effectively around issues. He noted that all of the resources to solve many of the world’s social issues already exist in respective silos.

Education issues, for example, affect all sectors in different ways. Corporations struggle to find skilled labor and local governments have smaller tax bases due to a long-term decline in education. The common thread, however, is dropout rates. This is an example of a focused issue a cross-sector project can seek to address as a shared goal.

Table Discussions

After the panel discussion, event participants at each table went to work. They addressed three broad questions regarding social enterprise in their own organizations and the effectiveness of collaborations across public, private, and nonprofit sectors. A summary of responses follows:

Examples of successful cross-sector collaborations and best practices

 Some compelling examples of social enterprises at work:

  • NASCAR and driver Jeff Gordon are leveraging their brand to sponsor a campaign to end hunger.  The purpose is to effect change through peers, rather than a top-down approach.  NASCAR has joined forces with AARP to generate awareness and funds for seniors who are in danger of going hungry.
  • The Gen Youth Foundation is collaborating with sports marketing firms and the NFL to fight childhood obesity.  The collaboration leverages the NFL brand and its image of athleticism, as well as support from USDA, the Department of Agriculture and the Fair Food Project in Philadelphia to drive local programs on healthy diets for children.  Investment from local NGOs and the mayor’s office seeks to promote purchase of local produce and dairy products.
  • The Grassroots Business Fund uses investment from a variety of sources, including the IFC, to invest in for-profit small and midsize enterprises in the developing world.  The goal is to promote commercial activities in key sectors such as agriculture and micro-lending that will create lasting economic growth at a regional level.
  • Paladin Realty Partners has partnered with OPIC and IFC to invest in affordable housing in Latin America.  This partnership allows each party to leverage their core competencies to generate sustainable housing growth.
  • The City of Detroit, with private hospitals and medical schools, have partnered to re-build Detroit’s healthcare system.  By bringing assets from each party, Detroit plans to be one of the leading healthcare systems in the nation.

Some common themes for best practices came up at several discussions:

  • Focus on a few core issues that you can solve, and do these very well.  This requires the group to identify outlier issues, agree to put them aside, and focus on the core mission of the project.
  • Ensure that each party is executing on its core competencies.
  • Set ground rules for everyone and every organization and provide a process for dealing with disagreements
  • Always focus on the long-term results and seek to institutionalize projects and processes.

Where are cross-sector collaborations going?  How do we measure our progress?

  • Organizations are becoming more self-reflective, attempting to understand where and why efforts have succeeded or not.
  • Private sector partners are looking more and more for financial results and ROI.
  • Projects are looking deeper into the supply chain to identify upstream benefits.
  • Consumers will continue becoming a stronger voice, demanding transparency and responsible behavior.
  • An increase in social enterprise activities will be incremental and evolutionary, based upon successes.  We must define smaller milestones and expand from there.
  • There is never a finite set of metrics to choose from, and they will vary among issue areas, sectors, and industries. Industry specific metrics will need to be adapted/morphed into social enterprise terms.
  • Success metrics must be agreed upon at the onset of any project or collaboration.  Third-party auditors will likely become more prevalent to measure success.

How can Georgetown’s GSEI further the concept of “doing well by doing good”?

  • Business students should focus on building re-usable frameworks to assess a variety of issues.  Students can engage in developing a system map around given issues to understand all the affected players– throughout a supply chain, for example.
  • Georgetown has the opportunity to be a matchmaker, facilitating knowledge sharing and education across parties with similar interests, including social entrepreneurs, government agencies and large corporations.
  • Develop valuation models to better assess both economic and social impact, helping to identify practices in which firms can expect direct and indirect benefits.

Conclusions

The Global Social Enterprise Initiative at Georgetown’s McDonough School of Business is off and running. With our new Executive Director, Ladan Manteghi, and our faculty committee and student teams, and with Professor Bill Novelli, we will pursue these ideas, collaborate with other parts of the University, add new partners from all sectors and integrate Social Enterprise throughout the curriculum and other aspects of our School.

We appreciated the participation of our panelists and attendees at our April 19 event and will be in contact with you going forward. In the meantime, please let us have your thoughts on thissummary and other aspects of Social Enterprise by emailing us at: gsei@georgetown.edu.

Link(s):

Global Social Enterprise Initiative Established at Georgetown University’s McDonough School of Business