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Social Capitalists

The Power of New Ideas

Cheryl Dahle

David Bornstein readily admits that he is somewhat of an anomaly in the world of journalism. While most of his colleagues in the late 1990s were power lunching with venture capitalists in Silicon Valley, breathlessly chronicling how the dot-com era was changing business, Bornstein was traveling to the poorest reaches of India and South America to learn about how entrepreneurs of an entirely different breed were using their entrepreneurial instincts to change the world.

His first book, The Price of a Dream: The Story of the Grameen Bank (University of Chicago Press, 1997) traced the path of the pioneering work of a giant in microlending, the practice of giving loans to poor people in developing nations. His second effort, in bookstores this month, How to Change the World: Social Entrepreneurs and the Power of New Ideas, (Oxford University Press, 2004) traces the broader movement of social entrepreneurship and its role in inventing the future.

His iconoclastic approach to choosing his subject matter has put him in the unique position of being one of the only journalists with a deep expertise in a field fast gaining international attention and significance. It's not every author, after all, whose book gets a nod from Nelson Mandela, who calls Bornstein's work, "wonderfully hopeful and enlightening."

For his part, Bornstein sees his divergent path as a result of a widespread media blindspot. "I would go so far as to say that the media is biased against the future," Bornstein says. "As journalists, we're trained to analyze what is in front of us, not to think ahead to what might transpire and how our own choices about what to cover might even determine that future."

Fast Company recently chatted with Bornstein, a member of the advisory board for the magazine's 2003 Social Capitalist awards issue, about the significance of the social entrepreneur movement and the factors driving its growth.

Fast Company: What explains the burgeoning of the field of social entrepreneurship over the last 15 years?

David Bornstein: There are several factors at play. Here in the U.S., you have a situation where more people have more choice and more capital available to them than ever before in history. That, coupled with people's emerging sense that government is not solving social problems, that there are systemic flaws that get in the way of solutions, has led to a tremendous amount of innovation and new application of entrepreneurial talent in the social sector. Abroad, you have the added element of the shifting political landscape over the last 20 years. The same conversations we're having in the U.S. about how to end poverty are also going on in Bombay, India, in Warsaw, in South Africa -- in many places where the social sectors there have only recently opened up to citizen participation. In Brazil, for example, you had a string of dictators who weren't too interested in challenges to the status quo, let alone addressing social problems. In communist society in Eastern Europe, participation in the civic sector was similarly off limits. The charitable sector wasn't really able to flourish in these areas until political change arrived in the late '80s. At the same time, you have increased freedom for, and hence participation from, groups that have been historically disenfranchised -- women, the untouchables in India, blacks and so-callled "coloreds" in South Africa. What you're seeing is the natural outgrowth of what happens when you get open entry, a pretty basic business concept.

FC: You've studied social entrepreneurs all over the world -- Poland, Hungary, Brazil, South Africa, the United States. Is there some common characteristic you've observed that is unique to this group?

Bornstein: They have an incredible tenacity, which I think comes both from a sense of outrage around injustice and an elongated view of time. They see how what they do every day shapes the future, and they see the urgent need for that change. They don't get tired of evangelizing for their cause over and over again. They don't get bored. They are just absolutely relentless.

FC: What's the most exciting development going on in this field right now?

Bornstein: It's thrilling to see how the market is moving to invent the kind of financial services necessary to make social change really scale. Right now, there isn't the equivalent of an initial public offering for non-profits. So if an organization in New York comes up with a great solution for solving, say, homelessness, there is very little chance that it can get access to the capital it needs to go national with that program. But you're starting to see foundations and individual investors grasp this challenge and think more creatively to solve it. For instance, the Bill and Melinda Gates Foundation has invested three quarters of a billion dollars in worldwide vaccine projects. That is an IPO level of investment that stands a chance of really making a difference. Pooling that much money in one place represents a fundamentally different approach. The potential impact of that is huge. In fact,50 years from now, as a result of his foundation work, I'd be willing to bet Gates will be remembered as perhaps a greater contributor to social innovation than to the world of technological innovation. He'll be the Rockefeller of this era.

FC: So what does that development mean to an individual who doesn't have millions to make that kind of IPO-level investment happen?

Bornstein: Well, the good news is that 20 years from now, hopefully sooner, there will be a whole field that will evolve around evaluating social entrepreneurs, the same way that you have analysts who rate for-profit companies as investments. As an individual investor, there will come a day when you can choose to spend your annual donation to charity, not based on an informal sense of, "It feels good to give to this nonprofit because I know someone who has the disease they research," but based on knowing which of all the thousands of nonprofits operating in the country delivered real social return on behalf of their investors. You'll be able to make rational choices about where your contribution will be most effectively used.

The other thing for individuals to think about is that this field has become a legitimate career path. For those who are still in school, or considering a career change, the field of social entrepreneurship is rapidly growing to encompass all sorts of jobs with all sorts of job descriptions. As an individual, you have plenty of opportunities to work in a way that is challenging, impactful, and deeply meaningful.