Does Philanthropy Have a Place in Social Enterprise?

One of the holy wars of the social entrepreneurship movement is founded on whether both nonprofits and forprofits can count as social enterprises, or whether only one really counts. But with a new Tactical Philanthropy track at this year's Social Capital Markets conference, at least one major player is suggesting that all are welcome.

The Social Capital Markets conference started two years ago as a place to convene all players in the space emerging between doing business and doing good. While the conference has gone to lengths to bring together investors at different points of the social enterprise funding chain, it's never before had an explicit focus on looking at how philanthropy is changing as a field.

In partnership with Tactical Philanthropy -- Sean Stannard-Stockton's philanthropic advisory services firm, which grew out of the blog of the same name -- this year's SoCap will have a track that focuses on how philanthropy is changing, particularly in reaction to an expansion in the types of actors who are trying to create change.

I think it's a great move. First, there are enough major players (most notably the Skoll Foundation) who believe social entrepreneurship needs to be in the nonprofit domain that it makes sense from a field building perspective to have this conversation. Second, and more important to me, I think there are enough examples of really smart companies that had to chose the nonprofit path for financial reasons -- Kiva and Samasource come to mind -- that philanthropy has to have a seat at this table.

One of the questions I'd love to see addressed is how philanthropists determine when their subsidization of an organization is healthy, versus when it is simply giving those organizations an excuse to take longer to figure out how to meet demand. I'm referring explicitly to companies that provide services for nonprofits or for low-income constituencies and also have aspirations to self-sufficiency. I worry that philanthropic subsidies in these cases can sometimes create incentives to spend more resources on increasing the philanthropic pie, rather than improving the product offerings to their main customers.

If you want to learn more about SoCap, visit them at Socialcapitalmarkets.net.

Photo Credit: sociate