What does the future of social entrepreneurship looks like? The era of non-profit ventures is soon going to end. Only economically and socially profitable organizations are going to stay around and make a significant impact in the society. That was the message given out by the panel on The Future of Social Entrepreneurship, attended by representatives from leading impact investors: Skoll Foundation, Ashoka and New Profit Inc.
All these investors maintain an impressive portfolio of investments around the world in areas of education, public health, environment and workforce development. They shared insights on the criteria they use to choose social ventures. Only those ventures that have a validated business model – in contemporary business terms, the ventures that crossed the chasm – are selected for investment. Just like any other early stage start-up venture, social ventures too have to bootstrap themselves until they demonstrate profitability.
Why is profitability so important? Profitability is necessary for the organization to make a significant impact on the society, by sustaining itself on the long run and spreading its reach to a wider population base. Most often, the organizations fail to become economically profitable because they don’t know how to monetize the social value that they create. Monetization and securitization of social value are the vital steps towards profitability. This is where most of the social ventures lack expertise and where business professionals can fit in.
