Invest in Something That Counts
December 1, 2011
Social entrepreneurship gains popularity in Claremont
Make money and serve the social good, all at once? Many would roll their eyes and begin to drift away from a conversation about providing electricity to rural villages in India. One might assume that this type of endeavor would cost investors thousands of dollars, without any net return. Not so, argues Jacqueline Novogratz, founder of Acumen Fund. Novogratz ardently defends the potential of social businesses to reap financial rewards, and her successful ventures and social entrepreneurship’s growing popularity in Claremont prove it.
Started in 2001, Acumen’s mission is “to create a world beyond poverty by investing in social enterprises, emerging leaders, and breakthrough ideas.” One of the social enterprises that Acumen Fund invests in is Husk Power Systems, a technology that utilizes agricultural waste to generate electrical power for 130 villages in India. The financial returns that Acumen will see from this type of investment will automatically be turned around and recycled into new investments.
Acumen Fund is not the only social-impact fund that has been successful in a short period of time. Ignia Fund, Leapfrog Investments and Microvest are three similar funds that have collectively raised more than $100 million in the last couple of years.
What has stimulated this growth and interest in social enterprise and investment? Has anyone else taken note of the trend towards socially-oriented businesses and careers? Apparently, yes. A number of major universities in America and around the world have begun to offer courses and careers? Apparently, yes. A number of major universities in America and around the world have begum to offer courses and degrees specifically on social enterprise. These initiatives, which include Duke University’s Center for the Advancement of Social Entrepreneurship and Stanford’s Center for Social Innovation, seek to prepare young professionals for success in a job market that demands experience with and knowledge about entrepreneurship and social innovation.
This spring, Claremont McKenna is offering a new course on entrepreneurship. Taught by Sarah Smith Orr, Executive Director of Kravis Leadership Institute, the psychology course is called Leading Entrepreneurial Ventures. As described on the portal, the class “addresses the issues faced by individuals who wish to capitalize on marketplace opportunities through entrepreneurial organizations. Students learn about the process of creating and leading new ventures, the range of dilemmas facing entrepreneurial ventures, the critical role of leadership and the executive team, and the psychological dynamics of new venture teams…” Both sections have already exceeded capacity.
In an interview with the Port Side, Smith Orr described her experience in the social sector, which she thinks has potential “to be more entrepreneurial and to engage young entrepreneurs in a way that gives them the freedom to create solutions to some pretty serious social issues worldwide.” Smith Orr sees social entrepreneurship as “looking at the potential that’s well beyond traditional structures.”
Founded in 2010, Claremont McKenna’s Social Enterprise Initiative for students on the Claremont campuses to participate in the growing field of social innovation. Gaby Andrade CMC ‘12, co-founder of SEI, was inspired to create the club after hearing speakers like Paul Rice, President and CEO of TransFair USA, and David Green, who was pivotal in founding of Aurolab, a nonprofit manufacturer of medical products based in India.
SEI’s work on campus includes fundraising campaigns, hosting speakers, and investing club funds in entrepreneurs from developing countries through on- line lending platforms. Last year, the club raised $10,000 to support a Malawi-based health NGO called Project Muso. Andrade believes it is valuable for students to learn about social enterprise in order to “expand their perspective on ways of addressing social and environ- mental issues [and] learn about other avenues to address these problems other avenues to address these problems other than the traditional non-profit route.”
In Claremont and across the globe, the conversation is changing. Creating social value has replaced making a profit as many businesses’ top priority. The educational world is responding by offering courses and degrees that will pre- pare students to excel in a world that demands business leaders who are driven by something beyond the bottom line. Today, a new generation of young professionals is entering the job market, inspired by the insight that incredible potential lies in the marketplace – potential that can and must be focused on alleviating the poverty, violence, and inefficiency that persist around the world.