Just Give Them a Social Innovation

With all the hustle and bustle of the Chagim, not to say the goings on in the financial world, you may have missed the announcement last month that Ashoka, a global association of the world’s leading social entrepreneurs, is coming to Israel. Here, translated from the Hebrew, is a recent article by Oren Majar that appeared in The Marker.

The international foundation Ashoka is a different kind of foundation: it does not invest money, but it does provide social entrepreneurs with an international network of support. From now on they are also in Israel.

by Oren Majar, The Marker Magazine, October 2008

If you are social entrepreneurs who like to reinvent the wheel, but lack the connections and the resources, we have some good news for you: Ashoka, an international, non-for-profit, social venture capital fund, is opening an office in Tel Aviv this month.

Nir Tsuk, who has served as the director of the fellowship program in international Ashoka, will be the head of the Israeli office. His goal is to find the people who are trying to create systemic social change in Israel, and to help them in the same way that venture capital funds help startups: by providing recognition networking and financial support. Well, perhaps not exactly direct funds, but the ability to raise them.

Tsuk has a succinct definition: “We do not want to give people fish or fishhooks, but to support ideas that will change the entire fishing industry,” he rephrases the old cliché. “With all due respect for establishing a new hospital or school, there are enough funds which do that already, but there is no one who supports social innovations. Naturally the old funds are intimidated by social entrepreneurship.”

Ashoka believes that in order to change the fishing industry – i.e. in order to support systemic social change, strong ties must be established between the social and the business communities. This is why Ashoka encourages the business world to develop new products aimed at the bottom of the customer pyramid – the 3 billion people who are so poor that the big corporations don’t reach them at all.

The most prominent project in Ashoka’s resume is the micro-financing bank of Nobel Prize winner Muhammad Yunus, which showed that small loans can be given even to the poorest people. Ashoka didn’t invent the idea, but it helped Yunus to implement it. In another project, Ashoka connected 20 fellows, who use sport as a tool for social change, with Nike, which became a sponsor of their activity. A third Ashoka project dealt with the problem of providing health insurance to people in the third world without bank accounts. The solution: an insurance product that can be purchased using cash, and for one dollar per month.

Many big companies have been approached by Ashoka and have risen to the occasion. Amanco, for example, which produces irrigation systems, started to produce, with Ashoka’s encouragement, systems intended for use in small fields in the third world. Ashoka’s fellows recognized the economic potential in such systems, and now they help Amanco to sell them – so both sides benefit from the project.

There are many more examples, including one rather bizarre project of a Tanzanian entrepreneur who trains rats to find landmines. But all of these examples have one thing in common: their modus operandi. Ashoka and its fellows identify a real need, and use Ashoka’s network in order to approach business organizations and convince them to develop products for the millions of tiny customers, who together act as a big market.

Ashoka does two fundamental things: First, it looks for the right projects and people, and later on it brings together people who can help each other, or connects them to the business, governmental or third sectors.

Since it was established in the 1980s by Bill Drayton, Ashoka has remained strictly independent of the governments of any countries it operates in. This is why it does not accept any funds from governments, but relies solely on business entrepreneurs and their organizations; the list of funders includes Google’s founders, eBay’s founders, Infosys, and others.

“The question is how to build a bridge between the third and the business sectors,” Tsuk points out, and adds, by way of demonstration: “One hi-tech entrepreneur who wanted to invest in social entrepreneurship in the region in India where he lived as a child approached us. Because Ashoka has a network of 300 entrepreneurs in India, instead of him looking for people himself, we matched him the right people to work with”.

Entrepreneurs who work with Ashoka enjoy a social network of over 2,000 people in 72 countries. The width and breadth of its network allows Ashoka to examine proposals and ideas from a global perspective, and to use methods that have been tried before by others. “The community is an open source: as a social entrepreneur you see what others are doing in the world, and as an investor you receive a body of knowledge and can see what works and what is worth copying,” says Tsuk. “Sometimes a thematic community is established – for example, to deal with the damages caused by the tsunami – and later on we try to distil from the activity of this thematic community conclusions that will help in the future in similar crises around the world”.

And after all that, we are left with one perplexing question: what is Ashoka doing in Israel? Have we declined to the level of a third world country? It turns out that Ashoka thinks that our challenges are big enough. But if you are about to apply for a donation you should remember: funding is not part of Ashoka’s business model. The only direct funding will be a three-year stipend for the entrepreneur, equal to a third sector director’s salary, which will allow him to promote his idea. He will have to find the funds for his project from governmental or business organizations himself – but he will enjoy Ashoka’s global network and connections in order to do so efficiently.