Every economics 101 course introduces the idea of opportunity cost: the cost of a good is its price plus the entire realm of other opportunities not pursued. In other words, you pay for everything you don’t do – and thats a lot of stuff. Seems grim, right? Barry Schwartz explains in my favorite TED talk that these choices actually makes us unhappy. How can you be happy if there is something else you don’t have? Or what if someone gave you everything?

Strategic Philanthropy can often have this same approach. With a limited pool of resources, it is essential that a project have the highest social return on investment. The segmentation of philanthropic giving structures a hierarchy of social good. The marketing departments for large charities reinforce this hierarchy, bringing televised attention to pressing matters. In essence, what is rationally good is distilled by a few large organizations and their marketing teams. Domestic health issues affecting the affluent may receive more funding than devastating disease in developing countries because they are more easily cured, and easier to market.

Segmenting good in this way is a radical shift for charitable giving, which in the western world is built on Judea-Christian ethics of equality. Economic principes may further dictate who is worthy in a competitive arena. Some aid cannot be justified. But is it just to apply theory to charity?

Today’s New York Times offers a bold and equalizing alternative to such a cold picture of philanthropy: The Secret Society for Creative Philanthropy. The organization instructs givers to share $100 (maximum) in such a creative manner that the act may be bigger than the gift. Paper Airplanes out of $5 bills – I bet they’ve tried it. The movement has grown from a single writer to multiple communities in various cities. A cynic might suggest that the all the money could be better spent strategically. I think that there is an art in reminding people the of pleasure of giving, sharing, and passing it on.

In a similar light, the featured picture shows a book tracked by bookcrossing.com. Registrants enter a book into the database and leave it in a public location for new readers to discover. They are another great example of counter-veiling forces of generosity and gifting. Gifts build relationships, solidarity, and community – the backbone to our economic engines.

I rejoice in this art form, simple reminders that we are all worthy of gifts of love and random kindness.

Social enterprises are like the smart geeky high school student who is also a an all-american football star. Well, with one exception – social enterprises are handicapped. They sit in the shaky middle between bottom-line, for-profit companies and socially & environmnetaly focused non-profit organizations. They are hybrids.

Despite recent buzz about the field, there has been a general lack of institutionalized support for the sector. Foundations are weary to fund for-profit entities even with a social mission, and businesses rarely offer tiered pricing for hybrid businesses. Where as non-profits often receive reduced rates for services like legal and tech (Google Apps is free for non-profits), social enterprises pay full price. And boy do they pay for it.

In full disclosure, in my other life I run a social enterprise called Runa. We not only have to maintain strategic relationships with small farmers, indigenous communities, and other organizational stakeholders, but we also have to run a highly profitable tea business. We want to do both, and our investors feel the same. While we have received a good deal of good will press and local support in our home town, both business and non-profit communities do not really know how to handle us. So we front the bill.

Usually the nerdy football star matriculates to college with help of a financial aid package, and thats where the metaphor ends. Luckily, there is a growing community of social enterprises fighting to do good… and do well. How will we treat these Hybrids as they grow out of the awkward high school stage?

photo credit: crimfants

This is part 4 of an 11-part series on Undergraduate Social Entrepreneurship coordinated by the Social Innovation Initiative at Brown University posted on Change.org.

There is a culture of generosity embedded in the principles and institutions of social entrepreneurship. After all, social entrepreneurship emerged out of a demand for both nonprofit values and for-profit strategic impact, and tries to draw the best from both fields.

But while traditional entrepreneurs may favor “lone wolf” innovation, social entrepreneurs are inherently, well, social. Grassroots community organizing, volunteer-ism, charity giving and a deep commitment to social justice inform our social methods. To tackle global issues, we rely upon the generosity of our network.

Why are individuals in the social sector generous? Because entrepreneurs in the social sector know that the more that you give, the more you get in return. This lesson is slowly leaking into the private sector, too. Seth Godin’s latest e-book What Matters Now exemplifies that generous people will garner generous attention.

This ethic is especially true in a student setting, where competition is low and collaboration high. As a junior in college, I co-hosted a dinner for social innovators to answer the question: “How can we help each other?” Around the dinner table, we critiqued each other’s projects in global health (Mali Health Organizing Project), food security (Gardens For Health International), and conflict resolution (Strait Talk). We worked in diverse fields, but had a common need: each other. Today, this round-table format — an open forum dinner with skilled and generous listeners — is a cornerstone of Brown’s Social Innovation Initiative. We needed each other’s critical feedback, diverse skills and open networks. Together, we helped each other fund-raise and rethink our marketing plans, and inspired one another to take our projects beyond the safety of school walls.

Across the country, a proliferation of university support for student social entrepreneurs is on the rise. What’s more, in the same way that social entrepreneurs have for years, universities are now using the same culture of generosity to build their programming. The team at AshokaU, for example, has convened Change Maker campuses around the United States, sharing experiences and programming to enhance the entire sector.

Generosity spreads. This principal is evident in the proliferation of open sourcing in the social and private sector. Generosity gives back. Online fundraising is changing the way we make change. Generosity comes back. So, what did you do for somebody else today?

Photo Credit: micah.e

Fair Trade, Rainforest Alliance, Organic, Wild Harvested, Heart Healthy, what do they all really mean? Each certification has different standards and a different emphasis on social, environmental, and labor practices. While certificaitons assure consumers that their purchases are ethically sound, does the proliferation of certifications, especially in the food industry, dilute their meaning and effectiveness?

Multiple certifications can confuse consumers. Consider Fair Trade vs. Rainforest Alliance, their standards are dramatically different. These variations give producers the ability to choose their prefered certification based on service and price, while consumers are left largely in the dark.  Kraft has been a registers Rainforest Alliance member and major donor since 2003. Consumers should ask if Kraft’s donations influences the laxity of the certification.

According to Fairtrade.org, the labeling intends to connect consumers with producers. But with so many labels out there, and businesses choosing their preferred certification, producers may actually be disconnecting from consumers.

I invite you to join the conversation.

Pitfalls of Non-Profit Marketing:  In his latest HuffPo blog post,George Weiner, CTO of DoSomething.org explains the greatest misunderstanding in online fundraising: strangers don’t want to give you money, nor do they want to marry you. Rather, they might like a story or useful and interesting content to get them hooked. DoSomething.org is one of the most successful fundraisers out there, take their word.

Google Saves Trees: Google announced another life-changing technology, and no its not the Nexus One. They announced just a few days ago at the Copenhagen conference a new forest mapping technology that will track deforestation using Google’s geo technology and cloud computational power. This technology will speed up research and give us immediate data on deforestations contributions to climate change.

Help me Reforest the Amazon: My tea company, Runa, is half way to our goal of reforesting one hectare of the Amazon. We are planting highly caffeinated Guayusa tea in agroforests. Indigenous farmers harvesting guayusa can increase their incomes by 200% in a season.  Giving the gift of tea gives back a little more.

Diana Wells at Brown, courtesy of the Brown Daily Herald

Last week I had the pleasure of moderating a conversation with Diana Wells, the president of Ashoka. We discussed how Ashoka has diffused the concept of social entrepreneurship through its network of fellows. Nearly 30 years since Ashoka started the dialogue, social entrepreneurship and innovation has reached a national consciousness. Last summer, the Obama administration appointed Sonal Shah, former head of global development at Google.org, to lead the charge as the head of the White House Office of Social Innovation. With strong growth in the field, Wells gives us a peak into the future of social entrepreneurship.

True to Ashoka’s mission, Wells instructs that funding leaders must be a top priority. She exclaims, “the author of the idea will be its best champion.” Social entrepreneurs must have undying passion to battle trying social issues. Luckily, there has been a surge in leadership funding, with organizations supporting leaders at different stages in the lifecycle of entrepreneurship. However, on a national level, this funding is still miniscule. Wells incites that the Office of Social Innovation’s largest role will not be funding leaders, but contributing to a national set of priorities, primarily leadership. But as a new entry into this growing dialogue, does the office threaten to dilute the conversation?

There is a tension between local solutions to social issues and scalable ideas. To deepen, rather than dilute the dialogue, Wells sees the future of social entrepreneurship as aligned with Ashoka’s strategy: support ideas that are system changing by their ability to be replicated in other locations. In other words, cookie-cutter approaches to change scaling will not work. Instead, change-makers should adopt and modify workable solutions to local issues. Don’t the best ideas often come from another place? Car and Bike sharing germinated in Europe before entering U.S. markets and the British Invasion co-opted the best of American blues and rock & roll. Open-sourced web development expands this trend to a global arena.

The various stakeholders are dynamically defining the field. As leaders like Wells and Shah of social change embed themselves in our institutions and media waves, we can hope to see a future of positive social change.

My friend and former Do Good Well blogger, Nathaniel Whittemore, has added a great post over at Change.org, “How Your Leader’s Expertise Can Become your Company’s Biggest Weakness.” The gist is that there is a changing nature of leaders in organization. Success is dependent upon humble leaders, both self-starters and experts at delegating. Through his experience leading the Global Engagement Summit, Whittemore explains that when you let the reins loose, often the team can create more than a leader could conjure on her own:

The lesson for leaders is to think soberly and humbly about the nature of the commitments they have to their organizations. Every leader’s arrangement is different, but to execute specific tasks as well as to coordinate the work of others requires investing a large amount in the leadership of others. What’s more, I think the lesson is for leaders to think about how they arrange support around themselves that’s related to their expertise, even if that feels counter intuitive when they’re trying to save resources for elsewhere.

An entrepreneurship professor of mine echoes this notion, coining the term “vulnerable leadership.” He argues that a leader must be able to strategically let down their guard to give space for the rest of the team to advance. I prefer to call it “Socratic Leadership.” While the leader may have most of the answers, as Whittemore suggests, it is his role to socratically advance the dialogue amongst the team. By suspending judgment and comment, the Socratic leader enables team engagment, conducts ideas as a conversation, and collectively creates innovative answers.  When success is increasingly determined by an organization or team’s ability to execute on brilliant ideas, the role of the leader necessarily morphs to support the whole.

via Flikr

John Gerzema TEDx: Empowering consumers

The recession has changed consumer behavior. While personal savings may have fallen in the past 20 years, consumer voices have risen. New methods of organizing both online and offline may give consumers power to dictate the next steps in our economy.

Good: A Design For the Rest of Us.

Good design is not only a must for conveying a message, it is also a force to transform the world. This interview with Warren Berger the author of Glimmer gives insight on how use design problem solving for issues outside of design.

Planet Green: Green Materials Guide

Employ that design thinking and start building with green materials. This guide to green materials is must see for those about to undertake their next building project.

Story telling is the centerpiece of building communities. Last week leaders in business, media, policy, and education gathered at BIF5, to tell stories. I had to ask myself, why would impact oriented individuals be willing to give up two days to simply tell stories. Stories are not quantifiable, they are not deliverables to file away in work reports. So whats the big deal about stories? Well for one they inspire thought provoking dialogue and innovation. This is especially true at BIF5 where stories are not about historical accomplishments, but rather future projections.

A cell tower in Kumai, Ghana via Flikr

Two way communication died months ago. This weekend at the Better World by Design conference at RISD/Brown thought leaders in design, engineering, and appropriate technology collaborated on group projects and shared significant developments since convening last year. I was particularly delighted to see Ken Banks from Kiwanja / FrontlineSMS. His open software has enabled health clinics, farmers, and merchants  better track patient health, harvest growth, and sales in developing countries. A number of his constituent projects have received significant funding to scale successful projects to new countries.

The opportunity for cell-phones to change the world has  recurred throughout mainstream media in recent months. Yesterday the New York Times reported that texting in east and central Africa has enabled farmers to increase their livelihoods. Farmers receive texts about incoming disease strains, volatile pricing, and weather patterns. Farmers in rural areas are connected to urban centers where markets and commodity brokers influence prices. This urban, rural dialogue is changing farmers behavior and their access to global markets. This a contributing factor to Africa’s cell-phone boom, the largest growth sector in the mobile industry.

Access to global communication systems is changing the power dynamics and relationships between producers, manufacturers, and consumers. Working with Runa, a sustainable amazonian beverage company, my team was contacted by Ecuadorian indigenous farmers by e-mail before we had done first site visit. Having seen our  website (shoddy at best), they expressed interest in working together.

At what other point in history have rural areas had such sophisticated knowledge sharing tools to improve their livelihoods? How does this effect education and training for both knowledge and labor economies. When else in history have producers had the ability to access global networks of consumers so directly? What implications does this have for our conceptions of global trade?