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How Can Commercial and Citizen Sector Interests be Merged?

How can the drive for productivity, innovation and efficiency that has made capitalism such a powerful force in the world generate projects whose primary goal is to maximize social benefits? Can the pursuit of financially-successful business operations and society-transforming benefits dissolve the distinction between doing business and creating social innovation?

Background:
• David Green is demonstrating that "compassionate capitalism" can have a global impact. See the Library for more background reading.

• Changemakers' September article about the Cemex corporation demonstrates that large multinational corporations can successfully pursue profits and social development at the same time – on a significant scale.

• Some social entrepreneurs have found it helpful to to combine commercial and nonprofit entities. David Green first creates a nonprofit that can more easily receive funds from private foundations, etc. Later, he creates a commercial entity that reaps the profits of the undertaking. To avoid a conflict of interest, he doesn't hold an equity stake in the commercial venture. According to Prof. J. Gregory Dees, "These partnerships and hybrid structures can help alleviate some of the potential tensions between profit making and social benefit. It is often very hard to take social objectives seriously and still provide a market-rate return to investors" (Dees, 2002).

(Each time a new opinion/topic is posted, an email message will be sent to all those who have participated in this discussion alerting them to the new entry to ensure that all participants continue to feel involved.)

Sept/Oct Point of View: Pursuing Profit and Social Development Together

Nov/Dec Point of View: What Makes Survival Education Work?

Needed: A Better Understanding
January 18, 2003 9:02 am
There are some practical problems in operationalizing the convergence of commercial and citizen sector goals. The commercial ventures are driven primarily by forces of market and competition. The criteria for success, material rewards, and rules of the game are well understood by the players. These existing rules and success criteria etc. are probably inappropriate for promoting the convergence. The whole field of social enterprise needs an in-depth analysis of motivational issues, institutional structure, identification of special groups of investors and venture capitalists etc. There is need for developing a better understanding of this new, complex and challenging field of knowledge. I feel this improved understanding can bring enhanced benefits to mankind.
- K.L. Srivastava, Consultant, Participatory Rural Development Initiative Society (PRDIS), Hyderabad, India, klsrivat@yahoo.com

The Approach Here is Exquisite
January 16, 2003 12:18 am
As a community development finance professional in the U.S., I'm struck by David Green's strategy for human capital. To a venture capitalist/social venture capitalist, competence for execution of any plan is paramount. The approach here is exquisite. I'm in the process of building a "community investment bank" in the U.S. and believe new approaches to marketing direct social investments to traditional investment institutions are necessary. I'd be curious as to how long the process took to get to clinicals trials and what form of accelerators might speed other good social business ideas to market.
- Jim Mingey, President, Intrust USA, USA, jmingey@intrustusa.com