State of Social Entrepreneurship 2016

Echoing Green has selected and supported emerging leaders with bold ideas for social change for nearly 30 years. While what these leaders are called–change agents, social entrepreneurs, community mobilizers–has evolved since we first started supporting these innovators, their work has consistently operated at the intersection of social justice and entrepreneurship.

As an organization that looks for emerging innovators from communities around the world, we’ve had great success building a one-of-a-kind ecosystem of social change leaders. To date, Echoing Green has provided funding to almost 700 social entrepreneurs who have worked in more than 70 countries. In just under two months we’ll increase that number with the addition of our 2016 Fellowship class. These are incredible leaders prepared to challenge the status quo in order to make transformational change in their communities across the globe.

The Potential of Entrepreneurship

Since we first started investing in leaders to drive social change in 1987, our role has been to connect them to tools, networks, and human capital to help them transform the world for the better. We’ve worked to bring new voices into the social entrepreneurship space knowing that leaders can emerge from all walks with unique perspectives and ideas. Over the years, we’ve also worked and partnered with organizations who can help us continue to diversify our applicant pool.

Today there is no doubt that there is still room and demand for new leaders–the explosion of accelerators, incubators, impact investments, and programs seeking to support social ventures is a telling sign of the growing landscape. But the data to show this is working isn’t there yet. That’s why it’s rarely enough to write a check. There must also be an understanding of what it means to invest in human capital and what that investment looks like beyond dollars. As the landscape has grown, Echoing Green has been evolving our programs to address changing needs in the social change space.  A commitment to evolving, innovating, and iterating is crucial to Echoing Green’s process: providing emerging leaders with the tools that help them be most effective in their work is core to sustaining high-impact leadership over the long haul.

As a result of our commitment to this process, Echoing Green’s diverse community is made of incredible leaders with purpose. Every year, as part of our Fellowship selection process, we receive thousands of applications from self-identified early stage social entrepreneurs from all over the world. We ask them questions that help us understand the problems they’re looking to solve, what’s transformative about their approach, and their leadership potential (critical for staying the course as a leader for a lifetime). Our human capital approach is key to the health of the Echoing Green ecosystem, and our application helps us to understand if a person has the ingredients to drive dramatic change.

What’s Our Data Telling Us?

As one of the few seed funders for social entrepreneurs, Echoing Green believes it is important to share highlights from our applicant pool alongside learnings from our peers in the field. Doing so contributes to our shared understanding of the unique challenges and opportunities self-identified social entrepreneurs encounter. Looking at our applicant data from the past five years leaves little doubt that there are patterns among our pool of applicants which mirror what is happening in the “outside world.”

While we’ve succeeded in building out a bigger tent (as evidenced by receiving 2,077 applications from 120 countries for our Fellowship programs this year), we recognize several patterns among our pool which we hypothesize are tied to the impact of differential access to networks and funds. The data we see affirms what we’ve tacitly known but it is imperative that we continue to invest in our capacity to collect and analyze it. These inequalities aren’t new–but acknowledging the barriers presents an opportunity to be smart about how we assess potential when we understand that people don’t start out with the same resources (often due to structures beyond their control). The data doesn’t lie: as a field we must show up differently, taking a human-centered approach and meeting leaders where they are. Where they are, by typical measures, is not the sole indicator of whether they have the potential to thrive as leaders given the tools and support they need.

Inequalities from the Start

Echoing Green knows leaders can come from anywhere. We created our Fellowship application to help us identify leadership potential in a diverse global context. To identify individuals with the potential to develop into exceptional social entrepreneurs, applicants should be assessed not only by common business milestones–often measured by funds raised, degrees earned, or business milestones achieved–but also using indicators that showcase their leadership potential.

Chart 1 Source: 2016 Echoing Green Fellowship applications, U.S.-based organizations in operation for 1-2 years and with individual applicant leaders only. Data has been restricted to organizations which have raised funds, with statistical outliers removed. The graph displays the average funds raised by self-identified black and white applicants.

Chart 2 Source: 2016 Echoing Green Fellowship applications, U.S.-based organizations which reported a stage of “Proof of Concept” and with individual applicant leaders only. The data has been restricted to organizations which have raised funds, with statistical outliers removed. The graph displays the average funds raised by self-identified female and male applicants.

Gaps in our applicant data reflect some of the barriers we know exist for entrepreneurs globally. For example, our applicant data from the past five years (2012-2016) tells us that black applicants from the United States apply to Echoing Green’s Fellowship program with fewer existing financial resources than white applicants. We believe this data reflects opportunity gaps for people of color to launch their organizations. In our 2016 applicant pool, 56 percent of white applicants had already raised funds, only 36 percent of black applicants had reached that same milestone. When funds have been raised, black applicants consistently report raising less than white applicants: of those in operations one to two years, black applicants report revenue of USD 68,000 on average, compared to USD 122,000 raised by white applicants.

Source: 2016 Echoing Green Fellowship applications, all applicants by self-reported gender identification.

When we compare organizations at similar stages of organizational development, disparities persist. While male-led organizations which have raised funds and achieved “proof of concept” raised an average USD 172,000, female applicants raised an average of USD 97,000. The same disparity holds true when we compare organizations operating outside of the United States–male-led organizations still raise more. For international organizations in operation for more than two years, male-led organizations raised USD 154,000 on average. This is 20 percent more than female-led organizations, which raised USD 128,000 on average.

The data also hint that it’s not just about the money. Disparities we see at the university-level and in corporate hiring are also reflected in our applicant pool. For example, nearly three-quarters of our Climate Fellowship applications have at least one male applicant, compared to just one-third for those who identify as female. Climate proposals tend to come from those who emerge from STEM professions, so it showcases the need for more supports along the pipeline, and for organizations like Echoing Green to continue to expand where we look–it’s not that the talent isn’t there.

Understanding Leadership

As evidenced by the strength of our applicant pool, indicators such as having the “right” networks, or amount of  money raised are not the end-all for what makes successful entrepreneurs. Using our data to inform us helps us to refine our human-centered approach. In part, this means continuing to assess and refine our Fellowship selection process and partnering with organizations who also believe diversity is additive. Being part of a global community that values different perspectives, experiences, and approaches to change paves the way for innovation.

Entrepreneurial thinking, driven by the world’s “disrupters,” can be a route to equity. We support leaders who are confronted with–and asking–the tough questions about unconscious bias, access to capital, and other ways in which exclusion rears its head across industries. Breaking down silos, working across backgrounds and perspectives, and supporting leaders who authentically understand and engage with the issues they’re looking to solve catapults innovation to the next level.

Across the board, you’re not less worthy of investment simply because you haven’t raised the funds. An entrepreneur’s context, unique perspective, and vision can result in lasting impact with the right support in place. The persistence of these discrepancies among our applicant pool over the last five years highlights the importance of providing promising leaders with support early on–access to networks, capital, and leadership support. But it also means evolving where we look and how we select. The onus is on networks like Echoing Green to not only ask “who are we talking to?” but also to better understand “who are we not talking to?”

The Next 30 Years

There is an abundance of talent in the world. Given the chance, they will launch an idea that fundamentally improves the quality of life and opportunity for communities across the globe. Undoubtedly, some leaders will achieve in spite of the challenges they may face. But there’s no sense in gatekeeping when it comes to social justice. Echoing Green’s role is to help leaders become as ready as they can to take their work to the next level as they seek to transform the world. It’s important for all of us in the social change ecosystem–from leaders, support systems, funders–to consider what it might take to make sure doors open when leaders are prepared to knock on them.

After 30 years, we’ve learned important lessons about how to build an inclusive pipeline. But seeing the challenges entrepreneurs face before even getting a foot in the door of a network like Echoing Green, for example, illustrates how critical it is to continue evolving our process, leaving no stone unturned when looking for emerging leaders with purpose. To do that, we’re listening to our insightful community, we’re analyzing our data, and we’re evolving to do the work that needs to happen to make changes a reality. Once we find, support, and unleash leaders, their boundless potential must be met with a social change ecosystem ready to receive them.

We know there is more to do. This is only the tip of the iceberg for what the conversation of equity, access, and inclusion means for the Echoing Green community. And we know we must keep taking steps to foster and grow an inclusive pipeline. As we move forward, announcing the 2016 Finalists for Echoing Green Fellowships on May 5 and our Fellows in June, we’ll sustain a conversation about what needs to be done to continue to help leaders go further, faster for the sake of developing an equitable world for us all.

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