Followup on social enterprises: roles in a market/ecosystem

My SSIR post seemed to get a fair amount of attention, which is always nice. But of all the retweets and shares, my hat goes off to Jennifer Lentfer for picking out one of the most critical lines of the piece. To wit:

It’s a point worth underlining. A social enterprise can drive better management and process improvements by capitalizing on its ability to focus—an ability that’s hard to find in larger organizations with broader agendas. If we’re thinking like capitalists or economists, this is a competitive advantage for the social enterprise. Anyone interested in furthering social impact might conclude that social enterprises are the best investment. (And this is more or less what’s happened in the past decade, though rarely put in those terms.)

But if we’re thinking about the social impact space as an evolving ecosystem—creating variations, selecting them, and replicating them for further variation—then we’d be more interested in the roles played by a focused social enterprise in the broader system. That might make us more critical of investments in social enterprise, except to the extent that they serve those roles.

I replied to Lentfer’s tweet and then Ian Quick chimed in with the logical extension of that point:

What if, indeed.

There’s an analogy to be made between the social impact funding space and crude natural resource management. Sometimes we use too much fertilizer, which seeps into the waterways and causes algae blooms. Sure, we grew the plants we wanted, but we also ended up with all this other stuff and it’s killing the fish.

You may notice a parallel to my post a few weeks ago about social movements v. social entrepreneurs. When we consider only the single thing we’re funding or supporting right now, we miss the bigger picture. This results in both unintended negative consequences and missed positive opportunities.