Five Tips For Being a More Effective Social Entrepreneur: A Conversation With The Skoll Foundation

culled from:greenimpact.com


1. Get to the Root of a Global Problem
The Skoll Foundation supports organizations working to solve the root cause of a global problem. Take Root Capital as an example. Root Capital is helping lift small Tanzanian coffee farmers out of poverty with a unique loan program that allows growers to upgrade their equipment and systems, increasing the quality of their coffee, increasing income by up to 50 percent, and decreasing water pollution by 80 percent.
Root Capital’s innovative program has since brought Starbucks in as a partner.  The Seattle-based corporation made a commitment to purchase the coffee at a premium price if the sellers implemented some changes to become a reliable source.

Shiwahiade Munuo, a Tanzanian coffee grower, says in a film on Root Capital’s work, “In 2005, we were selling one kilogram of coffee for 1000 shillings. After acquiring the coffee washing station, we now earn 1,900 shillings. Also, our kids no longer have to help us with work, so they have time to sit down and study for school.”

2. Have a Proven Concept

Unlike Ashoka that will provide new projects seed funding, the Skoll Foundation only funds well established organizations with a proven concept that is ready to scale up. It empowers them to extend their reach, deepen their impact, and improve society.
The funding criteria require a three-year track record, proof of concept, and a business plan for major growth in impact.
3. The “C” Word:  Collaboration
Another criterion the Skoll Foundation uses to assess organizations is to what degree can they  enter into effective partnerships to reach scale more efficiently. When done correctly, collaboration can tap into levers that can magnify impact (collaboration was the theme last month at the annual Skoll World Forum in Oxford).

“Collaboration is a word that is widely used and seldom practiced. To scale innovation, entrepreneurs need to tap into deeper pools of funding and explore how to create effective partnerships,” said Crisafulli.

He pointed to the example of a collaboration between two organizations they fund: Root Capital and TransFair USA.  As mentioned above, Root Capital provides farmers trade finance to produce a quality export, while TransFair is working to build a brand for fair trade and provides fair trade certification support to farmers.  Their partnership creates a very symbiotic approach.
Another unique collaboration is the EcoPeace-Friends of the Earth Middle East project, which brings together Jordanian, Palestinian, and Israeli environmentalists to tackle water management issues.
4. The Multiplier Effect
The Skoll Foundation likes organizations that have a “multiplier effect”: projects that get a big bang for their buck by tapping into levers and magnifying impact. Crisafulli points to Ceres as an example of an organization whose impact goes beyond its size.

“They take a very pragmatic approach of working with corporations to internalize environmental externalities and bring them onto the balance sheet. They have built a network of investors responsible for trillions of dollars of assets and aligned themselves with organizations that have a global impact. The result is a huge multiplier effect.”

5. Highly Scalable Business Models
While Crisafulli acknowledges that there have been some concerns about the effectiveness of some business models, such as microfinance, at its core, he believes microfinance is effective. And he sees the next big wave as something that will build on its strengths.
He articulated, “What investors are looking for are the next highly scalable business models that are going to reach hundreds of millions of people in a transformative way.”