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Scaling Change: Market Forces are Part of the Solution

LeverageI’ve been thinking about this issue of how to scale social innovation a lot lately. When I was at the D.C. Presidio Fellowship week, we talked with the Social Innovation Fund. Their focus is on mobilizing public and private resources to find and grow the best community solutions. They identify evidence-based strategies that can make a difference on issues like economic opportunity, healthy futures, and youth development and then fund those innovators to do a lot more of the same.  The Fund is a great model for leveraging the private sector with the public sector to scale change. It builds on what the non-profit sector has always done, focusing on services and supports that are working, and adds the actively engagement of the private sector as part of the solution.

I really appreciate their recognition of the important role the private sector. This recognition is growing – there are an increasing number of models for how public/private partnerships can solve some of the most pressing social issues. For example, the Omidyar Network  invests in a combination of for-profit and non-profit ventures that together can help solve complex problems, like government transparency and financial inclusion, throughout the world. One of their approaches is to combine funding with technical support for the early stages of innovative market solutions, helping expand the scale of social entrepreneurships.

For me, one of the more exciting examples of private sector investment in social change and evidence of the tremendous scaling potential of engaging corporations comes from PepsiCo’s recent work with the Clinton Global Initiative.  They took the following inputs:

PepsiCo’s juice products in India + Clinton Global Initiative’s capacity + small cashew farmers living below the poverty line + highly nutritional cashew fruits + modern agricultural techniques

and created:

A value-added supply chain of over 2,000 small farmers (soon to be over 15,000) who previously could only sell the cashew nut, but are now able to efficiently grow and sell the fruit to PepsiCo where it is used to increase the nutritional value of existing juice products.

CashewTalk about a win-win. It made me want to fly to India to try one of the juices!

The takeaway from this great public/private partnership is to remember that the for-profit sector is built around the concept of scaling in a way the public and non-profit sector just isn’t. We need to leverage that! Businesses seek growth – new markets, new customers, new products. That means they have an ever expanding reach and when we can work with businesses to balance profit with social good, what we care about can grow along with their bottom line.

Next time we start a social change strategy, I propose we start asking questions from day one to help us identify the for-profit partners who have a business reason to be part of the change:

  • Who is already making profit related to the issue we care about and how do they make it?
  • What changes to current for-profit models could change outcomes on this social issue?  Who would benefit from thosePPP changes? How small of a change would make a difference?
  • Where is there potential for profit not yet tapped by anyone?

Just like any other type of social change, engaging a for-profit in a market-based solution to the problem may benefit from starting small and piloting the change. But once you can demonstrate the bottom line benefit, both in profit and in social good, just imagine the scaling potential!

Want more resources on scaling?  Check out the Stanford Social Innovation Review’s special supplement on scaling.