“Professor Yunus was right. Bringing private capital into social enterprise was much harder than I anticipated.”
These were the words that came from Vikram Akula, who is the former Chairman of SKS Microfinance, and rang through the ears of 1,500 attendees in the Social Enterprise Conference at Harvard on February 25. SKS Microfinance and the microfinance industry came under immense scrutiny when a program that was designed to help the poor got carried away.
At the Social Enterprise Conference, Akula acknowledged the legitimacy of the criticism from professor Muhammad Yunus, the pioneer of social business and microfinance, who had previously voiced his concerns over SKS’s deployment of private capital in microfinance and its profit orientation.
Perhaps this dramatic confession on Saturday night has bigger implications. Akula brings up learning points for social entrepreneurs. The first is mission drift. Part of the reason for SKS’s woes was the move away from the focus of serving the poor as its core mission. It becomes easy to lose sight of the social mission when not everyone in the social enterprise space is altruist and as a result, it is vital for social entrepreneurs to ensure the mission and core values are defined and pursued.
The second point is a call-to-action. The problems of SKS highlight the need to figure out how we can provide a better space for social enterprises to pursue their missions without pressuring them to abandon that pursuit. SKS Microfinance is a prime example of the outcome between tensions of profit and social purpose.
“The mistakes I’ve made can help the rest of you” said Akula at the end of his speech.
Ashoka Founder and CEO Bill Drayton was also present to deliver his keynote.
“Right now I believe we’re at the most profound transition point in the history of our species,” he said.
Drayton observes a new model he calls collaborative entrepreneurship – that seeks teams working across traditional boundaries of public, non-profit, and private sectors – between social entrepreneurs.
He challenges the attendees to “help your friends have the courage that you have” in trying to create a better world and adds that the supply of investment opportunities need to continue to increase to harness the excitement for social investment that brings in the energy and capital.
Winners of the Pitch for Change competition were announced. Ho’oulu Pacific, which aims to address epidemic levels of obesity, diabetes, and unemployment of Pacific Islanders, took first place, followed by Jamela Oil in second and Emprofit in third. Essmart is the audience choice. Prizes include cash and consulting hours by Root Cause and Echoing Green to develop the ideas.
Photo from Social Enterprise Conference.