Why Social Enterprises Are Key to a Sustainable Global Economy — And Our World-Changing Idea to Make it Happen

Alexandra Nemeth

Content Marketing Manager at MovingWorlds.org

The growth of the social enterprise movement is a silver-lining of the last 18-months, and we cannot let the opportunity to scale this movement go to waste.

Earlier this week, we hosted a virtual celebration of our Fast Company World Changing Idea Honoree award, where we shared more about what is next for our S-GRID program, how it connects to our MovingWorlds Institute and Corporate/CSR partnerships, and some BIG platform improvements we’ve made to make it easier for you to build your network, grow your skills, and scale your impact.

Continue reading for key takeaways from the session, and you can also watch the full recording here.

Why Social Enterprises Are Key to Building Back Better

Navigating the challenges of this last year hasn’t been easy for anyone working in the social impact sector. But through it all, we’ve been continuously inspired and motivated by the incredible individuals and organizations in our community.

We saw social enterprises rise to the occasion, responding faster than governments or nonprofits to crises like COVID-19. And if there’s one silver lining from this year of tumultuous change, it’s been the growth of the social enterprise movement – and at MovingWorlds we’re determined not to let this opportunity to further scale this movement go to waste. We’re committed to pouring resources into our communities, social entrepreneurs, and partnerships to help the movement do even more. 

And we’re not alone – governments, corporations, and even the World Economic Forum are making major bets on the social enterprise movement, and investing accordingly. 

We missed social entrepreneurs in the first two crises of this decade; we cannot afford to miss them again.

-Chantal Line Carpentier, Chief of the New York Office of the Secretary General at UNCTAD, USA

Why all the focus on social enterprise? There’s an Archimedes quote we return to again and again that goes, “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” At MovingWorlds, we firmly believe that our biggest lever for changing the global economy is social enterprise, which we define as “an organization that utilizes business principles, highly ethical internal operations, and the alignment of 100% of its resources to solve social and environmental challenges through the creation of sustainable earned revenue streams – while also positively influencing the larger systems around it.”

If we can help more social enterprises participate in the global economy by embedding into global value chains, we can help facilitate the spread of more sustainable thinking across all sectors. 

Our ‘World Changing Idea’ 

Every year, there are about $12 trillion worth of transactions just in small business-to-business spending, many of which deplete the environment while propagating inequalities. If you expand the scope to include large corporations, that number becomes even bigger, but we’re focusing on small businesses because they’re typically the ones at the very beginning or very end of supply chains – niche areas where governments and big corporations are not providing enough support.

The amount of money that these small businesses are transacting represents almost 100x more than all governments combined spent on global development in 2019. Our ‘world changing idea’ that led to the launch of our S-GRID program was: if we can divert some of that capital to social enterprises, we can help corporations meet their sustainability and equity targets by embedding social enterprises in their value chains, helping the social enterprises scale impact and revenue while making the entire system around them more sustainable.

If we continue to rely solely on charity or government to solve our most pressing global challenges, we may as well be trying to rebuild with a shovel what we’re removing with dynamite. Even corporate leaders are increasingly speaking up about how unrestrained shareholder capitalism has gone too far. But we are also living in a time when we actually believe capitalism can change – according to JustCapital, a majority of people think if we can evolve capitalism we can realize a more sustainable and equitable future.

Our 2021 Research

6 months ago, we set out on a CSR research project to find out: is this really a movement, or just a few forward-looking companies who are making real investments in meaningful social impact?

What we found is that corporations are investing more than ever before. In fact, 72% of companies mentioned the SDGs in their reporting. Still, only 14% have specific targets outlined, indicating that while a lot of companies are talking about being good, only a fraction of those are actually investing in it. Still, we have seen more and more real action and commitment by companies to invest in social enterprise, including SAP’s new 5×5 by 25 social procurement pledge, PepsiCo’s bet on regenerative agriculture, and in some cases tying CEO pay to equity targets. 

This trend will only continue to grow, and as it does, more and more companies will be approaching social enterprises as potential partners who have already figured out the unit economics of doing well by doing good. This represents a tremendous opportunity for social enterprises, as these potential partners control billions of dollars in spend that could make all the difference.

It’s important to point out here that this is NOT charity or traditional philanthropy; corporations are investing in social enterprises because it actually makes good business sense. Businesses are starting to use their most powerful assets – both financial and human – and preparing them to partner with social enterprises, and MovingWorlds is helping companies, like SAP and PayPal, make that transition.

The Opportunity of a Generation

There is a massive shift underway where corporations are investing in sustainability and equity through their core business, and social enterprises are realizing that revenue-based partnerships with these corporations are an effective way to grow beyond traditional philanthropy, grants, or impact investment. There are also an increasing number of individual professionals looking for more purpose and impact in their work who have control over parts of that spend. Combined, these three trends are resulting in a massive growth of capital being deployed towards social enterprises. That’s what we at MovingWorlds are working to accelerate. 

To help social enterprises realize this opportunity to change the economy, MovingWorlds focuses specifically on what’s known as the “pioneer gap.” 

As you can see on the left-hand side of the social venture growth curve graphic above, when an idea is initially developed, it’s easy to access capital and support: there are grants available, new business competitions, accelerators, and all kinds of potential investment. This is the pioneer gap.

But as soon as an idea moves into initial testing and hits the reality of the market, things start to get tough. More investment is needed to improve the product, adapt to customer feedback, and iterate on the prototype. In this and the subsequent stages, it’s hard to access talent or financial capital as even “early-stage” impact investors won’t get involved until the idea is proven. Once there’s proven scale potential, as you see on the far right side of the graphic above, then it becomes easy again to access resources and impact investments.

What MovingWorlds is focused on doing is providing support to cross that pioneer gap. We go into the places where financial capital won’t, and when we do, we bring corporate procurement spending and human capital with us. And if we can do that correctly, it will truly change the world – helping social enterprises grow their world-positive ideas while making corporate value chains sustainable and equitable.

Platform Updates to Make You Even More Impactful

MovingWorlds now operates a single platform where corporations, ecosystem builders, social enterprises, and passionate individuals can learn, connect, and work together to build the sustainability and equity of the global economy. 

That means more learning, community, and networking opportunities for professionals, more direct support and revenue opportunities for social enterprises, and more connections and partnerships across value chains and sectors.

Starting with social enterprises, we help them access the connections, resources, and learning they need to grow their operations. Our community platform creates peer-based connections, our learning management system provides learning and interactive guides to build skills and processes, and along the entire journey, social enterprises can use our Experteering network to request:

  • An expert to come lead a training for any number of employees
  • An Expert Advice Call to get subject matter expertise on any topic
  • A Connection to build a network at a company or in an industry
  • Aa Coach and/or Mentor for ongoing support
  • A Pro Bono Project for dedicated skills-based consulting or project-based work.

As we have for nearly a decade, we also support professionals that want to learn more. They can also access our community site, learning resources, and provide support to our social enterprises. Increasingly, we also host events that engage both professionals and social enterprises together, like design challenges.

And then for corporations and CSR leaders, we operate a fully managed platform and service to scale social impact programs by educating and engaging employees to build more sustainable and equitable supply chains.

The Next 10 Years

We believe that our world-changing idea award is not a recognition of past efforts, but rather an indication that our efforts will change the world, and we have every intention of making that a reality. We invite you to join us.