Blogger creates trouble!

Late breaking news from the Gathering. Yours truly clearly ticked off our articulate and thought provoking keynote speaker, Carl Schramm, the head of the Kauffman Foundation.

Carl Schramm

Carl's foundation is the foundation for entrepreneurship. Carl started off with a spirited advocacy for the power of entrepreneurship, touching on the vision of Ewing Kauffman, the founder of his foundation. He noted that the post-war predictions were that economic growth would come from large corporations, and that the era of the entrepreneur was over. Carl went to explain how much this is now the era of the entrepreneur, with half of the new jobs in the U.S. created by new ventures.

Carl covered the Foundation's efforts to foster entrepreneurship in kids (quite successful by his report). A really exciting venture is the creation of a REIT (Real Estate Investment Trust) to address the need of charter schools for viable buildings for their schools. He's also a big fan of of Teach for America.

So far so good. Carl then took the social sector to task for its lack of scale. He used the many successful corporations who have become household names and/or hit a billion dollars in revenues. He challenged us to name a new (formed in the last 10 or 20 years) nonprofit Google, or Microsoft or YouTube. People came up with a mix of names, but Carl didn't go for many (Habitat and Teach for America he did agree to).

Of course, I'm thinking that just maybe this isn't a fair way to measure the social sector. After all, small businesses generate a whole bunch of those great jobs created by entrepreneurial energy, and they rarely scale. And, the social sector isn't structured by its nature to encourage scale like the for-profit sector.

Carl concluded with a pitch for true charity, and talked about the the value of pure philanthropic motive.

Now, I was one of the many people in the audience who didn't see much room for the social enterprisers in the mostly binary world of Carl's speech (strong for-profits and traditional charities). Most social entrepreneurs don't think of themselves as charities. Of course, there an awful lot of charities who end up using the term social entrepreneur as a hook to ask for grants, so I understand why Carl could be critical of the concept.

I got up and asked the question about the middle ground where most of the audience was playing: not traditional business or charity, but social mission ventures with lots of earned income.

Carl was pretty annoyed, and simply said that I hadn't been listening to his speech. Actually, I felt like I had been listening pretty closely, and was hoping for a more analytical or reasoned response. And, I've had twenty attendees come up and thank me for challenging this point, because they felt the question was crucial.

We knew that Carl would be a thought-provoking speaker, and would challenge the world views of the attendees. We weren't disappointed!


rgm2007 said…
Hi Jim,

I came across another report on Mr. Schramm's talk ( ). In this piece, he is quoted as saying "The reason why there's a charitable sector in the first place is because markets are imperfect, and there is such a thing as market failure"

This got me wondering about the mission of Bookshare. If the lack of accessible reading materials is a market failure, then Bookshare's response is to address that market by 'sharing', which is really publishing, books in 'unmarketable' formats.

If that is the case, then there is a disincentive for Bookshare to address the root cause of this market failure, which would appear to be the economics of publishing, since the mission of Bookshare is alleviating the symptoms.

Not to pick on Bookshare, as this would seem to be a common danger for many charities. What I would like to see is an 'exit strategy' for Bookshare - how do you intend to put yourself out of business?

Bob Martinengo
Jim Fruchterman said…
I disagree that there is a disincentive for us to address the root cause of the market failure, because it makes an unsupported assumption about our motivations. While there are nonprofits who act as though their mission was to stay in existence, that is not Benetech. I would point out that we successfully exited our first social enterprise (Arkenstone), and each new Benetech project needs to come up with several exit options at its inception.

The best way to address this market failure is universal design, which is where someone with a print impairment can purchase the book in an accessible form. I co-authored with George Kerscher the "Soundproof Book" article, which advocated for making standard ebooks accessible. My essay on Google Print from two years ago was a strong pitch for universal design, not If our motivations were solely to support the continuation of (treating the symptoms), then we would be unlikely to advocate for such root cause solutions.
rgm2007 said…
It is not a question of motivations. The Chafee amendment calls for 'specialized formats' for 'exclusive use' by a group of people defined by their abilities - the opposite of universal design. The disincentive was built in to Chafee.
Jim Fruchterman said…
Chafee, which was designed to encourage easier access to books for people with disabilities is suddenly labeled a "disincentive." If Chafee didn't exist, would publishers suddenly change behavior and start publishing accessible books for the print disabled community? I highly doubt it. So, where's the "disincentive?"

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