Exploring Social Entrepreneurship

A few weeks ago, I wrote briefly about Muhammad Yunus (a former Vandy alum) and his micro-lending work with the Grameen Bank. Micro-lending is just one example of the new genre of philanthropy called social entrepreneurship. Social entrepreneurship begins with the recognition of a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. It allows on-the-ground entrepreneurs in the developing world to gain access to the capital markets. This appeals to me because I believe that lasting change comes when those closest to the problem lift up both themselves and one another. Local businesses run by locals are uniquely positioned to leverage the strength and interdependence of the members of a community.

My friend Michael has been helping me learn more about social entrepreneurship. Michael is an extraordinarily bright guy whom I’ve gotten to know since he joined our agency about a year ago. He has an amusing penchant for transforming nouns into verbs. In Michael’s world, we don’t schedule appointments, we “calendar” them. He’s well connected in the venture capital world and there are in fact, a number of venture firms that have philanthropic arms that invest in social entrepreneurs. One of these philanthropic venture groups is run by Vinod Khosla, Sun founder and an early partner at Kleiner Perkins. Khosla Ventures is actively supporting social entrepreneurship in the areas of micro-finance, education, alternative energy, and global health (among others). This is one of the places that Michael is trying to help me make a connection.

Getting involved with a group like this might be an attractive alternative to the large aid organizations. I like the additional accountability that comes with these business-focused (yet still philanthropically motivated) organizations. I know that my personal strength is in evaluating business opportunities and leading results-driven organizations. I worry that I won’t be able to find like-minded people in the large aid organizations (or at least not enough of them).

To test out social entrepreneurship in action, I’ve recently invested in a small African company that provides eco-friendly safari tours in Kenya. As you likely know, Kenya has recently experienced signficant upheaval following its December elections. Kenyan politics tend to fall along tribal lines with no tribe comprising a majority of the population. The current President (Kibaki) is a member of the Kikuyu tribe. He “won” in the December election against Raila Odinga of the Luo tribe, but international election oversight groups cited significant irregularities in the election and did not endorse its result as democratically legitimate. The contentious relationship between Kibaki and Odinga (who used to be part of Kibaki’s cabinet) boiled over into violence for most of the month of January (approximately 1000 Kenyans were killed and numerous citizens were forcibly displaced from the Rift Valley). Kofi Annan has sinced stepped in and brokered a power-sharing arrangement between Kibaki and Odinga and tensions have eased over the last several weeks (Canada has just lifted its travel restrictions to Kenya -- as of this writing, the U.S. still has not).

Naturally, the violence and tumult has driven a dramatic downturn in the travel and tourism industry in Kenya and many businesses are suffering as a result. The eco-safari business that I’m supporting is simply one of the innocent bystanders in the situation. I’m still learning about this company and this industry so I’ll save a more thorough discussion of this investment for a future post, but I’m excited by the opportunity to get a first-hand look at social entrepreneurship in action.