Changing the Way that Charity Changes the World.

Tag: social entrepreneurship (Page 2 of 3)

Management Advice from Patrick Esquerre

Hannibal the Great

Hannibal the Great

I recently had the chance to enjoy a lunch with Patrick Esquerre, the founder of La Madeleine Country French Café. Over a delightful meal of mussels and lamb at the impeccable Salum, we discussed Patrick’s career as an entrepreneur and philanthropist.

Patrick offered an interesting analysis of the three types of people involved in any successful venture:

  • Steppers: The majority of the workforce, which is capable of doing exceptional work but requires strong management to help them see which steps to take next. Their backs are strong but their necks are bent to look at the ground in front of them, not the road ahead. Many businesses can find companies like global PEO solutions which help aid with the management of these employees, especially if the business has hired these employees from around the world.
  • Bridgers: Those who can see the opportunities ahead, but who tend to be head in the clouds. They are more focused on the future … without necessarily how to take the steps to get there.
  • Bridger-Steppers: Those rare leaders who can both see the future as well as the steps that it takes to get there.

On the latter, he cited examples such as the brilliant military commander, Hannibal the Great, who not only envisioned a way to beat the Romans by leading his war elephants over the Alps, but had the capacity to motivate his armies to do so.

In the world of social enterprise and nonprofit management, we need more “bridger-steppers” who are capable of balancing the relentless pressure of today with the focus on improving the situation tomorrow.

This is no small feat. While our peers in the private sector can rely on executive leadership, we generally must rely on legislative leadership (as discussed eloquently by Jim Collins in his brief but wonderful volume, Good to Great for the Social Sectors). This is quite a challenge, particularly when most nonprofits are saddled with the burden of a constantly rotating volunteer governing board whose members are largely uninvolved in the organization’s daily operations (particularly fundraising). Worse, they are largely unaffected by their own poor performance compared to their peers on for-profit boards (whose incomes will be affected if their company under-performs).

Add to this the pressure of under-resourced staff teams and the chronic impoverishment of the philanthropic “annual recapitalization” financial model, and you can see why most leaders capable of being “bridger-leaders” either go into the corporate sector … or, increasingly, just start their own private venture. Entrepreneurship is a noble pursuit with its own immense challenges, but what our world needs is for more of these talents to be harnessed by the social sector. Only then will we see large-scale progress against poverty, illiteracy, disease and a faltering sense of genuine community among people at all levels of wealth.

Or, as Collins might say, we need the great to focus on the good.

Interstate Batteries’ 5 Requirements and 1 Standard

interstate batteriesCarlos Sepulveda, President and CEO of Interstate Batteries, delivered the following “Five Requirements and One Standard” at this morning’s Core24 event hosted at Jones Lang LaSalle.

Five Requirements
1. Deliver Value
2. Develop People
3. Deposit Positive Net Cash (“the more you take, the more you should bring back”)
4. Demonstrate Area Expertise (“Are you a thermometer or a thermostat?”)
5. Display Commitment to Enterprise Success (“care as much about the success of the organization as your personal success within it”)

One Standard
Collaboratively demonstrate the above requirements consistent with:
– Our mission statement
– Our philosophy statement
– Biblical principles
– Common Sense
– Sound business practices

Thank you to Sunny Morris (@sunnymorris) for organizing!

Are nonprofits bloodsuckers who are raping the economy?

That's the assertion that Rush Limbaugh is making here:

http://www.rushlimbaugh.com/home/daily/site_051409/content/01125109.guest.html

One of my firm values is the concept that nonprofits are BUSINESSES. The term "non-profit" simply refers to an organization's tax exempt status and inability to provide financial benefits to shareholders.

One of Mr. Limbaugh's accusations is that nonprofits don't contribute anything to the economy, but only "siphon off" contributions by begging.

A few problems with this argument:

  • Many nonprofits operate earned income ventures such as thrift stores, manufacturing facilities, schools and other enterprises; these are no different than their for-profit peers except that the capital that they generate is used to sustain charitable activities, not provide dividends to shareholders.
  • Nonprofits pay payroll taxes; their staff pay income tax and social security; etc. These are all dollars that are flowing back into the economy.
  • Most importantly, what would the country look like without the work of nonprofits? Could the for-profit sector be as profitable without the vital contributions that nonprofits make to the lives of their employees and customers?

I realize that Mr. Limbaugh is in the business of generating controversy. I had honestly forgotten he was alive until I heard about his rantings about nonprofits: that means that he succeeded in getting the attention of the 10% of Americans who work for nonprofits (reference here). His advertisers are likely very happy about that.

In that scenario, who's the real blood-sucker? What is contributed to the world by Rush's rantings and ravings? 

The nonprofit world needs to be scrutinized just as carefully as the government: after all, we accept public contributions and therefore need to operate transparently and with accountability to all members of the community.

But insinuating that we are "lazy idiots" is absurd. And implying that the work of fundraising is somehow "raping the economy" is ludicrous — how is this any different than providing salaries to a salesforce in the for-profit world? 

I defer to Robert Egger, the leader of the DC Central Kitchen, who makes a nice retort in this video response:

That's the "Rated G" version. You can watch the full version (with hilarious ending) here:

http://www.youtube.com/watch?v=SFzye1bqwag&feature=player_embedded

The Land of “Non” — an imitation piece

the land of nonbuhjiggydanceMy dear friend Stacy Caldwell, Executive Director of Dallas Social Venture Partners (whose 10th annniversary is being celebrated with a BigBang!), has launched a rather ambitious exercise to create a children’s fantasy documenting the way that the nonprofit sector is changing.

I have been in the sun all day, so here is the best I can come up with — an “imitation piece” based very largely (in fact, 90% of the words come directly) from Lewis Carrol’s “Alice in Wonderland”:

——

Jeremy was beginning to get very tired of sitting in a cubicle in a bank, and of having nothing to do: once or twice he had peeped over the cubicle wall onto the computer screen his coworker was reading, but it had no pictures or conversations in it, ‘and what is the use of a screen,’ thought Jeremy `without pictures or conversation?’

So he was considering, in his own mind (as well as he could, for the long day made him feel very sleepy and stupid), whether the pleasure of photo-copying a picture of his backside would be worth the trouble of getting up and going to the copy room, when suddenly a White Rabbit with rose-colored glasses ran close by him.

There was nothing so very remarkable in that; after all, the company held large investments in various chemical and food companies, and Jeremy was always wading through large crowds of malnourished protesters on his way into the office. Nor did Jeremy think it so very much out of the way to hear the Rabbit say to itself, “Oh dear! Oh dear! I shall be too late!” (when he though it over afterwards, it occurred to him that he ought to have wondered at this, but at the time it seemed all quite natural); but, when the Rabbit actually took a grant proposal out of its waistcoat-pocket, and looked at it, and then hurried on, Jeremy started to his feet, for it flashed across his mind that he had never before seen a rabbit with either a waistcoat-pocket, or a grant proposal to take out of it, and, burning with curiosity, he ran down the aisle after in, and was just in time to see it pop down a large mail chute behind the water cooler.

In another moment down went Jeremy after it, never once considering how in the world he was to get out again.

Thus began my foray into the Land of “Non,” where nonprofits thrived despite the most ludicrous of circumstances.

To be continued.

Good is the new “Cool”

I missed out on Elvis’ domination, and wasn’t around to see Beatlemania. I am grateful I was not alive during the disco era, and am still a little angry that I was not around for punk rock’s emergence. By the time I was old enough to appreciate music, the world was in throes of 1980s hair rock and piano keyboards… so, I tuned out.

But then the 1990s came, and I fell in love with music for the first time. The indie rock scene was blossoming, and the grunge groups of Seattle were not yet household names.

It seemed like everyone had their favorite “unpopular” band. Indeed, fame became a curse that drove away the initially rabid fan base of many an otherwise awesome rocker. Some groups tried their best to fight appearing too “commercial,” with Pearl Jam even taking the step to boycott playing shows at venues that were in the grips of Ticketmaster.

That world no longer exists. Pearl Jam has now signed with Target to release their latest album — and people have moved from having their favorite indie rock band to making music an ongoing part of their life. Thanks to the ever-present iPods and smartphones that keep us all constantly plugged in to our catalog of thousands of songs, music has become like air — necessary to live, but unappreciated. Or, at least, no longer appreciated as a differentiator.

Having a favorite indie rock band no longer makes us unique. So now, rather than bragging to our friends about knowing a band that they don’t know, we each have our favorite charity.

Microlending. Social enterprise. Cause branding. Why is it that so many people now know this silly jargon?

Because nonprofits are the new rock bands.

In the online world, we are not people. We are a brand. Our Facebook pages and Twitter accounts become places to promote our values, to align ourselves with complementary brands and to give the appearance that we are, indeed, the person we aspire to be at our highest and best moments.

When we align ourselves with United Way or American Red Cross, that says something about us. But its like saying your favorite band is The Beatles — who doesn’t like them?

However, when I visit your Facebook page and see that you support Charity:Water or The Chiapas Project, I think, “Wow, this person is really cool.”

Because good is the new cool.

Think about it. Bill Gates was a total nerd, and everyone hated him when he became the wealthiest man in the world. And then his amazing wife convinced him that they should give it all away, and suddenly he is on the cover of TIME Magazine with U2’s Bono.

Congratulations, nonprofiteers. We are all rock stars now. And thanks to people like Robert Egger, we’re actually beginning to look the part.

The Megacommunity Manifesto

Thanks to Greg Hirsch for connecting me to this article, a segue from our revolutionary plottings with Stacy Caldwell:

The Megacommunity Manifesto
by Mark Gerencser, Fernando Napolitano, and Reginald Van Lee
 
8/16/06
Public, private, and civil leaders should confront together the problems that none can solve alone.


"A megacommunity is a public sphere in which organizations and people deliberately join together around a compelling issue of mutual importance, following a set of practices and principles that will make it easier for them to achieve results. Like a business environment, a megacommunity contains organizations that sometimes compete and sometimes collaborate. But a megacommunity is not strictly a business niche. Nor is it a public–private partnership, which is typically an alliance focused on a relatively narrow purpose. A megacommunity is a larger ongoing sphere of interest, where governments, corporations, NGOs, and others intersect over time. The participants remain interdependent because their common interest compels them to work together, even though they might not see or describe their mutual problem or situation in the same way."


Read the full article here:

Robert Egger thinks Nonprofits face “A Starbucks Moment”

Robert Egger blog, One Voice for Change, recently featured an article that describes the unique employment opportunity facing the nonprofit sector, and how approaching it in a different way could cause a permanent and productive shift in the sector’s long-term impact and sustainability.

A Starbucks Moment for Nonprofits?

http://www.robertegger.org/blog/?p=407

The full article is at the link above or posted below.

My only question: When will the nonprofit sector give rise to groups like Nirvana, Pearl Jam and Soundgarden? That’s the day I put down my laptop and pick up my guitar.

Continue reading

How To Save Newspapers

Thanks again to the eternally vigilant insomniac of the social enterprise movement, Stacy Caldwell, for connecting me to this article on the L3C movement (

Sally Duros: How To Save Newspapers (Huffington Post)

http://digg.com/d1uFoZ?t

Chicago’s newspapers could find a lifeline to solvency and a return to social purpose in a new kind of business structure called an L3C, or low-profit limited liability company.
Why is that?

Find this interesting? It is clipped below. Also, a mountain of additional resources are here:

Continue reading

Social Enterprise 2.0: The Low-Profit Limited Liability Company (L3C)???

Thanks to Stacy Caldwell for connecting me to the fascinating concept of the Low-Profit Limited Liability Company (L3C). Stacy is a Social Entrepreneur/Cultural Anthropologist/Blogger who leads the Dallas Social Venture Partners in addition to being the inspiration behind my Two-Word Strategic Plan.

Robert Lang and the L3CAnd, of course, thanks to Robert Lang of the Mary Elizabeth & Gordon B. Mannweiler Foundation for creating the concept of the L3C in the first place!

Best article I have read about this is here:
"The L#C: A New Tool for Social Enterprise"

Another good one here:
"The L3C: A More Creative Capitalism – Social Enterprise, L3C, Americans for Community Development"

A slightly touger read here, but full of lots of good info:
Americans for Community Development

—-

Key points:
  1. L3Cs are for-profit entities organized to engage in socially beneficial activities
  2. The structure is already in place to open such a firm in Vermont, and more states are following suit.
  3. This would create a vehicle for engaging the "sacred 95%" — the corpus of a private foundation that is otherwise locked away from charitable purposes — through PRIs (Program Related Investments). 
  4. Example L3Cs: carbon trading, alternative energy, food bank processing, social services, social benefit consulting and media, arts funding, job creation programs, economic development, housing for low income and aging populations, medical facilities, environmental remediation, and medical research.  

It's easy to be impressed by the innovative approach, but do not dismiss this new proposal as simply a novelty that will fade away. I am very optimistic that the proponents of L3Cs have tapped into something that will experience rapid adoption once its initial roll-out phase is complete. By the end of 2010, I think we'll see some work coming out of the L3C movement that will make us ask ourselves, "Why did it take us nearly 100 years to find an alternative to the 501(c)(3) institution?"


As one of the aforementioned articles states:

"The L3C is still in “proof of concept” form, but will be put to the test this year. Because the first L3Cs were formed in 2008, this means 2009 will be the first year that the concept will be tested with the IRS. Hopefully, the IRS will readily accept Foundation investments in L3Cs as valid PRIs. Steve Gunderson, CEO of the Council on Foundations, which supports the L3C approach says “we’re optimistic” that the IRS will also support this approach to PRI investing."

Strap on your helmets, boys and girls. The social sector is speeding up!

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