As a group, these winning organizations present a picture of sometimes stunning vitality. They expected annual revenues to grow by an average of 29.2% in 2003. Their employment was growing by 172%. Twelve of the 20 have some revenue-generating strategy similar to Rubicon's. And 13 of 20 spend 10 cents or less on fund- raising for every dollar they raise.
Our exhaustive study began with 117 social entrepreneurs identified by an expert panel as "the best of the best" in the arena of social entrepreneurship. We evaluated audited financials and tax returns, business plans and grant proposals, online surveys of executive directors and board chairs, and in-depth interviews with those executive directors and with outside experts.
Why did we do all this? Because the phenomenon of social entrepreneurship has emerged rapidly in the last 15 years as a force to be reckoned with - and, so, to be held accountable. Fueled by the economic boom of the late 1990s and by the widespread conclusion that governments were failing to solve social problems, citizens have taken up the tools of business to fight for change - in the circumstances of individuals and in the systems themselves.
Though no exact estimate exists on the size of the field, tax records indicate that the number of nonprofits grew by 60% between 1989 and 1998. About 250 colleges and universities offer courses or degree programs for students interested in jobs with a social focus. Most major MBA programs now offer courses or concentrations on social entrepreneurship. And there are 42 funds or foundations that invest primarily in social entrepeneurs, according to a 2002 study by Venture Philanthropy Partners.
It's an entrepreneurial revolution to rival the dotcoms - yet few, until now, have paid attention. David Bornstein, author of How to Change the World: Social Entrepreneurs and the Power of New Ideas (Oxford University Press, 2004), a book profiling the field and its history, puts it succinctly: "The past decade has produced vastly more social entrepreneurs than terrorists, but you would never know it by following the news."
That seems likely to change soon: Next fall, PBS will air the series New Heroes, which tells the stories of social entrepreneurs. The project was funded by the Skoll Foundation (started by eBay cofounder Jeffrey Skoll), which also has plans to bankroll a motion picture based on the life and work of Bill Strickland, a social entrepreneur who runs an arts program for kids and a job-training center for adults in inner-city Pittsburgh.
As you read the stories of these 20 groups, we think you will be filled with wonder. Their work - resourceful, daring, and often strikingly ambitious - evokes reverence for the spectacle of human invention and a soaring hope for what is possible.
The challenge for many of these groups now is to capitalize on the possibility they have created. For any of them to grow to massive scale, for their impact to be truly global, the methods for funding these types of endeavors will have to change. There is no nonprofit equivalent to an initial public offering - no foundation grant, individual donor, or government support that can equal what the free market supplies to innovative for-profit companies. Consider this fact from Bornstein's book: More than a third of the companies included in the Dow Jones Industrial Average today were added after 1990. Yet of the top 20 largest nonprofit service providers, not one was founded after 1980.
The names of these men and women and their organizations are not well known - yet. We think they will be some day soon. And we believe that institutions will emerge to truly leverage their ideas. For when history books reflect back on this century, Social Capitalists will be recognized as the architects of change, as catalysts who raised our expectations for the world, and of ourselves.
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