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Top 3 Takeaways from Social Enterprise Alliance Conference

By Diana Peacock

Regardless of legal structure or tax-exempt status, social enterprise can be a catalyst of sustainable social change and economic development.  At Community Wealth Partners, we see earned-income as one potential route to help organizations achieve financial sustainability.  As such, social enterprise can be an important component of strategies that aim to solve social problems at the magnitude they exist, helping generate unrestricted revenue while often also creating jobs, spreading knowledge or otherwise contributing to an organization’s impact strategy.

We’ve been a part of the social enterprise community for over 15 years now, having helped dozens of communities across the country cultivate local social enterprises.  I recently returned from this year’s Social Enterprise Alliance Conference which each year helps elevate key trends, barriers, and bright spots in the world of social enterprise.  Three key takeaways struck me across sessions and conversations:

1. We cannot create big change alone.
For many years the dialog around social enterprise has been focused on “scale” defined as using earned-income to grow or replicate programs.  Both on the big stage and in some break-out conversations, I was struck by attendees’ use of “scale” to mean dramatic progress on social issues at the magnitude they exist.  Along with this shift in meaning, I sensed a general acknowledgement that in order to truly reach “scale,” nonprofits and the sector as a whole can’t rely on simply growing revenue and programs alone, and that concepts like building influence, pursuing collective impact, and developing new capital strategies are required to affect the systems change desired. 

2. Personal sustainability is as important as financial sustainability.
I was struck that the conversation around talent is extending beyond the usual topics (i.e. how we need to attract new talent to the sector, grow young leaders to fill the upcoming baby boomer gap, etc.) to acknowledge that we need to nurture and care for ourselves as individual leaders, so that we can bring our best selves and thinking to the enormous challenges our society faces.

The conversations touched on a lot of the things we’ve seen in our own work – the need for tenacity and courage, the need to reconnect with our own personal “purpose” that explains why we do what we do, and the need for more compassion and empathy toward not just the ‘clients’ we serve in the sector, but toward our colleagues and selves.  Speakers such as Debbie Alvarez-Rodriguez, former CEO of Goodwill Industries San Francisco, San Mateo & Marin Counties, Eric Dawson, co-founder of Peace First, and Aaron Hurst, CEO of Taproot Foundation all touched themes found in our Dream Forward manifesto.

3. Innovative financing could change the math of how dollars lead to social change.
One of the aspects of conference I’ve most enjoyed over the years is learning about developments in financing vehicles for social enterprises and social change in general.  This year, I had the opportunity to dive into the evolving world of Social Impact Bonds (SIBs) and other Pay-for-Performance investment structures.  SIBs are very much in the “Research and Development” phase: the only deal that has gone through (which is in England) won’t yield demonstrable outcomes for another couple of years.  There are a couple of deals in the U.S. that have been announced, but none that are substantively underway.  Thus, the model is still unproven and has significant risks and barriers to widespread adoption.

I am admittedly slightly skeptical about whether we will see SIBs become a regularly used and sustainable model for funding social change, but I was excited to hear about an exciting variation on the theme that seems to have strong potential:

{Disclaimer: this gets a little technical!}
Several leading national and regional funders are exploring investment in a potential pay-for-performance deal with REDF as the intermediary organization responsible for achieving job-related outcomes for formerly incarcerated and disabled individuals in California (i.e. a reduction in recidivism, an increase in the tax base from new permanent jobs that are created, a decreased reliance on SSI/SSDI benefits, and an increase in employment tax).  The exciting aspect of this deal is that REDF would use workforce development social enterprises as the service/intervention to achieve these impact goals.  Thus, the intervention itself is being delivered in a more sustainable model, so theoretically it will be less expensive for investors to maintain and scale the progress in the future because there are market-based earned revenue models supporting the work.  Contrast this model to prevailing SIB deal examples where high-performing nonprofits that rely mainly on philanthropic and government revenue are selected as the service providers.  At the end of the outcomes period in 4-5 years, these organizations will have scaled up due to the increased investment, but will likely need to ramp back down if philanthropic funding at those levels cannot be sustained — as we’ve seen, for example, with organizations that benefited from stimulus funding.  (Now, this development doesn’t address the big question in my opinion which is the risk of government not adequately setting aside their savings and paying out on the deal… but I think the REDF deal is a step in a more sustainable direction)

Conference material will be available on the SEA website soon. I also encourage you to stayed tuned for conference videos on the Social Enterprise Alliance YouTube channel.

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Diana Peacock

About Diana Peacock

As a director, Diana Peacock engages in strategic partnerships with leadership teams, provides client engagement oversight and supports the overall growth and development of the firm. Diana has worked with a broad range of nonprofits and foundations, with particular focus on youth-serving, family services, and community development organizations. She has deep experience leading non-profit executives and Boards through strategy design and business planning, helping them pivot their organizations’ focus to meet growing needs and solve bigger social problems. Diana excels at assisting organizations with defining their impact, especially in highly complex environments, and has facilitated a successful merger of two national nonprofits. See Diana's full bio

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