Big Money Chasing Old Ideas: the Dilemma for Social Entrepreneurs

Last week I had the great pleasure of spending an evening with a few “social entrepreneurs” at the conclusion of a quick 2-day trip to Israel for a series of meetings.

Without meaning to denigrate any of the others with whom I met, that evening was certainly the highlight. It is so refreshing and reinvigorating to spend time with those who are truly committed to invention, re-invention, and re-balancing the volunteer sector. As readers of my blogs or attendees of my lectures are well aware, I firmly believe that we are in the midst of a profound transformative time in history, and that 21st Century institutions are being created or evolved in just such settings. Whatever little knowledge I can share with those who attend pales in comparison to what I learn from them and how optimistic it makes me feel.

Now let’s be fair. It is not always easy to be a “social entrepreneur.” Even great ideas take time to find their way or their funding. And many great ideas never do translate into a viable model. And those that do may take much longer to achieve sustainability than the social entrepreneur ever imagines.

And let’s be honest: a healthy innovation sector has failures – some well deserved; some really regrettable. From a macro level, if we don’t do enough experimentation that there is some failure, we aren’t trying enough things. From the perspective of the individual who is devoting his or her life to something requiring deep belief and buckets of sweat equity, failure can be almost tragic.

Hence I take the plaints and questions of social entrepreneurs very seriously since I am well aware how arduous the search for funding and recognition can be – or how serendipitous success may seem. And one question was asked which seemed to strike a chord with others, and deserves a reply:

When I arrived, I was offered some food but declined mentioning that I was still sated from a more than complete luncheon at the primary meeting I attended. One of those present decried this questionable priority saying how much better use could be made of all of that donated money than simply providing luxurious luncheons, implying that the groups in the room would certainly be able to use it more effectively.

I wouldn’t argue that none of us at the luncheon needed a full 4-course luncheon, and I suspect that all of us would have been more than satisfied with a more modest repast. But a more modest luncheon does not mean that even one dollar of those savings would have found their way to any of the fine groups which are associated with this collection of innovators. Those who support that international organization don’t say to themselves “gee, if we only had less opulent meals, we could support these wonderful start-ups.” They support that large organization for a wide variety of reasons, some altruistic, some political, some self-interest, some because they always have. None, I am sure, said to themselves, “I am supporting this group because of the luncheons.”

The question was followed up by referring to the words of a previous guest of this group. That speaker is himself the CEO of a large non-profit and very much in the hunt for philanthropic support. Apparently he bemoaned that there is a lot of “big money chasing old ideas.”

And this is undoubtedly true.

But, so what? Let us remember that charitable giving is voluntary. Even if we all believe that everyone should give, everyone who gives has the right to decide where to give his/her voluntary contributions. And if many – perhaps most – choose to give to safe, established, often unexciting organizations, we have no right to begrudge those choices.

What social entrepreneurs certainly have a right, indeed an obligation, to do is to demonstrate why their ideas are more likely to solve the problems or serve the needs of populations better than the stodgy older organizations. They might be right. And they should readily engage the competition for ideas, and for funds.

An increasing number of funders are indeed open to supporting new ideas, to taking risks with not yet proven projects, or simply encouraging innovation. If it is true that the world is being transformed in profound ways, time is on the side of the innovators. And eventually the big money, or at least some bigger money will follow.

I put my faith in the innovation sector more than the established organizations. Not all innovators will succeed, but the sector itself is succeeding. And while there is always a price to pay for change [the subject of another post at another time], the world of philanthropy has already changed in very real ways.

Big money may still be chasing old ideas, but smart money is chasing new ones.

Richard Marker serves as an advisor to foundations, independent funders, and not-for-profit organizations; he is a Senior Fellow in Philanthropy at NYU’s George Heyman Jr. Center for Philanthropy. Richard specializes in strategic philanthropy and planning and regularly blogs at Wise Philanthropy.