A Strategic Inflection Point
I like to look at the world in terms of paradigm shifts. Recently I have come to the conclusion that the global growth of the “Making A Profit While Making A Difference” thesis will create a paradigm shift that drives opportunity for everyone. The old paradigm of fixing social and environmental problems was, go to college, graduate, make some money, then one day give some back to people purposed to fixing the problems. The new paradigm that is being encouraged all over the world is “make a profit while making a difference”. This means that in short order, millions (frankly probably tens of millions) of people all over the world will be focused on making money while solving the social and environmental problems we face. Furthermore, these people will not only be graduates. Question 1. Are many of today’s not for profits the fax machine manufacturers of 1993? The companies that realized they were in the business of data transfer, pivoted to align with email and survived. Those who thought they were in the fax machine manufacturing business died. The “making a profit while making a difference” thesis (call it triple bottom line if you wish), is also purposed to allow all people to become innovators. All too often, segments of our community are left behind when a paradigm shift occurs, this paradigm shift truly provides everyone an opportunity to participate, if we provide them with the knowledge, tools, information, contacts, capital, etc., they need. I cannot recall a time when so many people will have such opportunity to fix the problems they face in their own communities while making money in the process. We cannot in good conscience let this opportunity get away. Question 2. What is the best way to efficiently and effectively help everyone participate? With the growth in the switch of mind set from donate to invest, we are seeing exponential growth in social enterprises. Just as emerging economies bypassed the old telephone infrastructure and went straight to wireless, countries like India are going straight to social enterprise. Some reports suggest that there are more social enterprises in India than there are in the rest of the world combined. Question 3. How do we protect the not for profits that are essential to sourcing, conducting diligence on, helping fund, and measuring the financial and other impacts of local innovations? Even with people wanting to invest as opposed to donate, an entity has to do the work. I am not aware of a time in history where ALL people have had the opportunity to be innovators in fixing their own problems, not just to subsist, but to make real money. If the solutions they create are designed to scale, who knows how large some of the companies they create can be.
Summary: I believe this is a strategic inflection point for the not-for-profit industry. It will be interesting t see who understands they are in the data transfer business and not the fax machine manufacturing business.