Paul Sorenson was working his way toward a master’s degree from Washington University’s Brown School of Social Work when he kept bumping into the same questions over and over again.
As an intern for the nonprofit health-care provider Grace Hill, Sorenson was supposed to connect poor families with resources that could help get them caught up on rent and utility bills. But what if one of these agencies had its funding reduced, moved its offices or was no longer open?
“If I wanted to find a great burrito, there are all of sorts of sites I could use to find that,” Sorenson said. “But if I was trying to connect my family to legal assistance, it was really hard to figure out what was out there.”
Sorenson would go on to found GoodMap in 2012, a website that allows social service providers to sort, rate and share information on social service agencies. The 28-year-old manager of community building at Grace Hill Settlement House now spends his off hours testing and refining his socially conscious startup.
Embedding social workers with the business chops to spot and rapidly develop innovative solutions for problems: that was the bottom line when three years ago the Brown School began offering a specialization in social entrepreneurship for students like Sorenson.
“You can be in the for-profit arena and still have a social mission,” said Amanda Moore McBride, associate dean for the Brown School.
What she’s describing is the core premise of social entrepreneurship, a business philosophy that incorporates social and environmental impacts into a company's bottom line. All students at the Brown School are now exposed to the concept and required to receive at least some management training. But the specialization is an avenue for students who want to get deeper into social entrepreneurship, and interest has steadily taken root.
For instance, this is how she described attendance for an information session at the start of the semester.
“The first year, there were a few people in the room,” she recalled. “The second year, there were maybe seven or eight. Last year, it was standing room only.”
Students first take classes on the basics, like how to develop a sound business plan. As they move forward, students receive training in fiscal management and budgeting for a new business. They are also required to pick up training from the Washington University's Olin School of Business in subjects that include financial accounting, conflict resolution and business and labor law.
At the end of the sequence, students enroll in the “Hatchery” at the university’s Skandalaris Center, an interdisciplinary entrepreneurship program established in 2003. In the class they work with an outside entrepreneur to develop a business plan for a new venture. Those plans are ultimately presented to a panel of judges that can include faculty as well as venture capitalists and philanthropists.
While McBride said many students don’t stick with the specialization after taking the intro course, for some the idea of merging business basics with social work is a natural fit.
“I refer to them as that 6-year-old who had that really successful lemonade stand,” McBride said. “They knew how to assemble their siblings and get the word out on the street. They don’t just want to address a problem, they want to solve it.”
As for Sorenson — who was the first student to graduate from the Brown School with the specialization — entrepreneurship wasn’t on his radar when he came St. Louis to study social work. But after he took the idea for GoodMap to his advisors, they steered him toward the then brand-new lineup of courses.
“I said, ‘hey, I have this idea, I don’t really know where to go with it,’” Sorenson said. “They said, ‘take these social enterprise classes, they’ll really help you out.’”
Other schools of social work have also started bringing business concepts into their curriculum. Boston College, for example, began offering a similar course lineup the same year the Brown School debuted its specialization. McBride said she often finds herself fielding questions at conferences from curious faculty at other universities.
“They’ll say, ‘can I get a copy of that curriculum?’” McBride said.
While the specialization leans heavily on entrepreneurship training, McBride said, its success isn’t necessarily measured by sprouting rows and rows of socially minded startups. Rather, she said, students develop the skills needed to evaluate what strategies effectively address a social issue and then quickly bring those ideas to scale.
“We’re going to be able to leverage more investors if we can also prove a return on investment that’s financial as well as social,” McBride said.
Not all students are sold on the idea that social workers should be looking for ways to thread the needle between profit and social good. But amid growing competition for what can be scarce public and private dollars, McBride said the training can give them an edge when it comes to locking down funding sources.
It’s a point not lost on Sorenson, who’s experimenting with a revenue model that blends money from subscriptions with more traditional funding sources like grants and donations.
“GoodMap, as a social enterprise, tries to tackle the social problems we talked about at the Brown School in a way that is sustainable,” Sorenson said. “In a way that we’re not just constantly going after grants and donations to scale that change.”
The launch pad
Chris Miller, senior lecturer of social entrepreneurship at Washington University, wanted to make some thing clear — there’s nothing wrong with making money.
“One of the problems those of us teaching social entrepreneurship face is the perception that because entrepreneurship is modified by the word social, somehow that means our counterparts in commercial entrepreneurship are doing something nefarious,” Miller said. “And that’s simply not the case.”
The difference, he said, is that social entrepreneurs seek profit as a way to fund a product or service that attempts to solve a problem facing society. With that in mind, in 2010 Miller founded the Mission Center L3C, a startup incubator designed to serve as a launch pad for socially conscious upstarts.
Earlier this year, GoodMap was part of the center’s first class, which also included a nonprofit focused on expanding science education and a for-profit wine company that directs profits into providing job opportunities for people with disabilities. Along the way they’ve received mentoring coupled with hands-on training in things like fundraising.
Even if a social entrepreneur has a solid business plan and a feel-good backstory, Miller said, it’s often a tough sell to earn the trust of prospective investors.
“There continues to be a perception among traditional investors that social entrepreneurs shouldn’t be trusted with your money,” Miller said. “That we’re tree-hugging hippies who don’t know how to run a business. The reality is we both know how to run a business as well as leverage resources to improve the community.”
And like any new business, social entrepreneurs face plenty of financial risk, a truth that Miller knows firsthand. After he left the St. Louis-based headphone company Yurbuds to start the Mission Center, the then 28-year-old quickly found himself more than $450,000 in debt.
Ultimately Miller dug himself out by offering back office support to nonprofits, including accounting and human resources services. To date, he said the center has generated a little more than $1 million in revenue, with profits funneled into expanded services for nonprofits and providing upstarts like Sorenson with extra resources.
Miller said the market will ultimate determine the success of a social enterprise. And two years after its inception, Sorenson is busy working out the bugs in GoodMap before kicking his company into high gear.
“What we decided to do with GoodMap was reach the organization and professional first,” Sorenson said. “Because if they don’t know what’s going on, no one does.”
BJC HealthCare has been piloting GoodMap since last June. Mel Donatelli is the Director of Strategy and Operations for BJC and said the problem Sorenson spotted during his first internship is pervasive.
To illustrate the point, she laid out an example involving a poor patient with multiple health issues who has come to a BJC facility seeking care.
“Quite often they’re already sick, they have heart disease or COPD, they just found out they’re also diabetic,” Donatelli said. “They’re not really sure how they’re going to get to their dialysis because they also have end stage renal disease, too.”
The patient in this scenario is surrounded by the latest in life saving technology. But when it comes to finding outside resources, Donatelli said, health-care workers often rely on binders full of agency names and addresses. In the margins are notes from staff about any changes that may have occurred at the social service agencies listed in the binder.
GoodMap, she said, has the potential to speed up the process and ultimately help staff do a better job meeting the patient’s complicated list of needs.
“What we’re trying to do with the GoodMap tool is help that patient meet those needs,” Donatelli said. “Versus just having us say, ‘OK, here’s where you’re going to go for dialysis,’ and have no idea how they’re going to get there.”
Carving out a new space
While teaching social entrepreneurism is relatively new at schools of social work, for many business schools across the country, the idea has become standard operating procedure.
“Almost all major business schools are offering social entrepreneurship,” said James Thompson, director of the social entrepreneurship program at the University of Pennsylvania’s Wharton School.
Though Thompson said reliable numbers on the trend are hard to come by, scan the landscape of America’s top business schools and examples are numerous.
At Harvard, for instance, the number of students enrolled in social enterprise courses or independent projects almost doubled between 2001 and 2011. At Wake Forest University, nearly seven out of 10 MBA courses include content related to social benefit. That’s an increase of 152 percent between 2003 and 2009, according to the Bridgespan Group.
“For a lot of the younger folks we speak with, they like the idea of being able to earn enough to do what they need to do for them and their families,” Thompson said. “But also they like the idea that they’re doing something more than seeking economic profits.”
Thompson said the uptick in demand is part of the reason more and more business schools are now offering courses on the topic.
“It’s becoming increasingly an aspect that’s very important when students consider what program they’re going to attend,” Thompson said.
In St. Louis, McBride said the Brown School’s social entrepreneurship program has roots that stretch back to the 1970s, when students were encouraged to start new programs aimed at solving social problems.
“What is new, though, is the integration of policy,” McBride said. “What does it mean to run a hybrid organization? There are very few people who know and understand that.”
And the regulatory and legal landscape for social entrepreneurs can be tricky to navigate and constantly shifting.
In recent years, a handful of states like Illinois have created a new legal and tax structure for social entrepreneurs called a low-profit limited liability company, or L3C. The Mission Center, for instance, uses the legal structure. But it’s not necessarily clear what the future holds for the L3C. The state legislature in North Carolina, for example, approved creating L3Cs in 2010 but then stopped recognizing the legal structure on New Year’s Day 2014.
“The legal infrastructure hasn’t found a way to deal with them,” Thompson said. “You have a very well defined nonprofit sector. A very well-defined for-profit sector. And for all these folks trying to carve out a space in the middle, a lot of that institutional structure still has to materialize.”
There are large-scale experiments with financing, too. In 2012 Goldman Sachs invested $9.6 billion in an education program for juvenile offenders in New York as part of something called a “social impact bond.” If outcomes like recidivism rates go down, which would save the city money, the bank gets a return on its investment. Meanwhile, the idea of for-profit companies making bets on complex social outcomes has sparked some concern about how the practice could muddy the way programs are evaluated and lead to unintended consequences.
As social entrepreneurship has become more popular, so to has digital learning. This fall the Wharton School will roll out its first Massive Open Online Course, or MOOC, on social entrepreneurship. The class and its content are free, but students can pay to get one on one interaction with an instructor.
In one month, with no advertising, Thompson said more than 8,000 people from about 158 countries signed up to take the course.