Social entrepreneurship – the Not for Profit way

In a recent article in the Griffith Review by Cheryl Kernot titled “A Quiet Revolution”, social entrepreneurship is discussed at length. Kernot discusses a number of community-based social initiatives - successful and unsuccessful – both here in Australia and overseas. She argues that Australia still has a long way to go in terms of social investment and innovation.

One significant matter concerns what are good practices. Prior to the GFC there was a tendency to hold the private sector up as the model to follow. Today it is clear that all sectors have some practices that are worthwhile. No sector, however, has all the answers.

Extract from the article:

In the days before successful corporate and third-sector partnerships, there was a pervasive business culture assumption that most charities were unbusinesslike and wasteful with their resources and practices. There were frequent calls to measure the efficiency of those who received grants and donations and this became a well-developed area of public reporting.

As a result, successful third-sector organisations have worked hard to ensure that they have learnt the lessons of business efficiency. The First Nations Development Institute, for instance, manages to spend less than a tenth of its budget on its administration and a similar proportion on fundraising expenses so that well over three-quarters of its income reaches its programs.

The daily deluge of revelations of excessive spending on executive salaries, conferences and travel put the old criticism of third-sector inefficiency into a context that makes the inference offensive. The lesson of the new model is that learning needs to occur at both ends of the spectrum; right and wrong are not the sole preserve of either sector.

This reinforces the need to identify the many good governance practices of the Not for Profit sector and adopt them for all sectors.

Visit the Griffiths Review website to view the article below.

http://www.griffith.edu.au/griffithreview/campaign/Ed24_APO/Kernot_Ed24.pdf

Cheryl Kernot is Director of Teaching and Learning at the Centre for Social Impact.