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Jim Fruchterman
Palo Alto, CA
Recent Activity
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Jim commented on the article |I'm definitely honored by the nomination, Nathaniel! It echoes a conversation that I've had with many senior social entrepreneurs: the one thing that we could imagine that is much fun as creating new enterprises would be funding great start-up social entrepreneurs and helping them on their way to social impact!
To be honest, I'm trying to make my job as head of Benetech look more like this. The main exception is that I don't have millions, not to mention billions, to invest in new ventures! But, we see tons of great ideas that could make it in the in-between space you describe: not on its way to being a traditional public company, but most definitely not acting as a traditional charity!
Feel free to send folks my way who want to deploy money with this approach!!
Jim (from Benetech)
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Jim commented on the article |There were between 30 and 40 social entrepreneurs at the WEF this year. It was the tenth anniversary of the Schwab Foundation for Social Entrepreneurship (Klaus Schwab is the founder of the WEF), and on the last day of the Forum we got together and debriefed. The SEs are integrated into the sessions, often speaking alongside top corporate or government officials. The event where I spoke on the topic of being more open with intellectual property policies, I was paired up with the Director General of the World Intellectual Property Organization!
The consensus was that over the ten years at the WEF, we've seen a dramatic shift on the core themes of the conference. The issues we were alone on, or on the fringes, are now core issues. Issues like the climate crisis, corporate ethics, food policy, globalization and so on are central issues for the WEF attendees.
Even with the big challenges we have today, taking a long view is really encouraging.
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Jim commented on the article |Samasource connected us with two social enterprises in Kenya that now do work for our Bookshare project. We're delighted with the price/performance and quality of the work, which mainly helps people with disabilities inside the U.S.
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Jim signed the petition | -
Jim commented on the article |It's worth amphasizing that risk taking is an interaction between social entrepreneurs and investors/donors. If you don't have a funding system that encourages high-risk, high-return ventures, you won't see a big pipeline of such ventures. Sometimes when new donors show up who are more risk tolerant, they are surprised to find that there aren't as many opportunities as they'd like to make those kinds of philanthropic commitments. It's one of the reasons why social enterprise is popular for those ventures that can bootstrap their way to sustainability on limited funds. But, many social problems aren't amenable to that option, at least not on a shoestring.
The solution is the kind of ratcheting up we see these days, where the back and forth between SEs and donors keeps encouraging more and more risk taking, and more success results in more funding for risky ventures. But, we have to have an environment that doesn't completely punish failure, and the funding community has a very hard time with failure. There are just a handful of examples of donors being open about failure. Compare that to the business entrepreneurship field where failure is accepted as a typical outcome and millions of words are dedicated to dissecting failure and how to avoid it.
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Jim commented on the article |Any exit has the substantial risk of a divergence from the founder's intent. One of our ideas when we sold our nonprofit Arkenstone social enterprise (reading machines for people with disabilities) to a for-profit was that we gave up control over that enterprise so that we could create the next generation project addressing the same problem, Bookshare. We think it worked out, even though Arkenstone is now run to maximize profit rather than social impact.
At Benetech, we try to come up with at least three viable exits for each new social enterprise we launch (other than the old stand-by, failure to thrive). What would this venture look like if it:
- Spun off as an independent NGO
- Merged with or was acquired by another NGO
- Succeeded in its goal and shut down because it was no longer needed
- Was sold to a for-profit because it had bridged the risk gap to becoming viable as a for-profit business (as Arkenstone did)
