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William Drayton
Everyone a Changemaker
Social Entrepreneurship’s Ultimate Goal
Rodrigo Baggio grew up in Rio de Janeiro loving computers. As he matured into an extraordi-
narily tall, thin man with a hugely wide smile, he became a computer consultant. Sin embargo,
from early on, he was one of the few in his generation who noticed—with concern—that the
young people growing up in the favelas on the hills overlooking his middle-class neighbor-
hood had no access to this digital world.
Because he has the great entrepreneur’s tenacity of observation and thought as well as
acción, he decided he had to take on the digital divide—well before the phrase came into cur-
rency—and he has been pursuing this vision relentlessly ever since. While beginning to work
toward this dream as a teenager, he learned just how motivated and capable of learning the
young people in the favelas were. And also how competent the favela community was in organ-
izing. This respect underlies the central insight that has allowed Rodrigo to have a growing
multi-continental impact.
Rodrigo provides only what the community cannot: typically computers, software, y
training. The community does the organizing, finding space, recruiting the students and fac-
ulty, and providing ongoing administration. The result is a uniquely economical model, y
also one where, because the investment strengthens the broader community, it is self-sustain-
ing and a foundation for other initiatives long into the future.
Rodrigo’s chain of hundreds of community-based computer training schools now serves
hundreds of slums across Latin America and Asia. These schools now have 700,000 graduates.
I got a sense of Rodrigo’s power when he came to Washington shortly after being elected
an Ashoka Fellow. Somehow he convinced the Inter-American Development Bank to give him
its used (but highly valuable) computers. Somehow he convinced the Brazilian Air Force first
to warehouse and then to fly these computers home. And then he somehow managed to per-
suade the Brazilian customs authority to allow all these computers in at a time when Brazil was
trying to block computer imports.
William Drayton is currently the Chairman and Chief Executive Officer of Ashoka: Innovators
for the Public (ver
received his M.A. at Oxford University and earned a J.D. from Yale Law School. De 1977 a
1981, he served in the Carter Administration as Assistant Administrator at the U.S.
Environmental Protection Agency where he launched emissions trading (ultimately incorporated
into the Kyoto protocol), among other reforms.
© 2006 Tagore LLC
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Everyone a Changemaker
Several years later, I got a further sense of how his mind worked, when I asked him why he
was starting his work in Asia in Japan. Japón, he said, was the only large Asian source of com-
puters where he could imagine getting people to give them to him. Por lo tanto, as his first step,
he had to demonstrate the value of his program to the Japanese in several of their own slums.
That is how entrepreneurs work. Having decided that the world must change in some
important way, they simply find and build highways that lead inexorably to that result. Where
others see barriers, they delight in finding solutions and in turning them into society’s new and
concrete patterns.
That much is easy to observe. Sin embargo, there is more to it. De alguna manera, an unknown, young,
lanky Rodrigo, the head of a new and unknown citizen organization, persuaded the managers
of one after another of society’s big institutions to do things they never would have imagined.
He knew they were the right and logical things to do. Somehow they sensed that inner confi-
dence and found it surprisingly persuasive.
What were they sensing? Rodrigo’s words and arguments no doubt helped, but few people
are willing to step out beyond the safely conventional merely on the basis of good arguments.
Rodrigo was persuasive because his listeners sensed something deeper.
What Rodrigo was proposing was not just an idea, but the central logic of his life—as it is
for every great entrepreneur. He mastered and came to love the new digital world from the
time he was a young boy. More important, his values from early on drove him to care about
the poverty and inequality he could see on the hillsides rising behind the middle-class Rio in
which he was growing up. His values and his temperament had him taking on the digital divide
before the term was invented.
Como resultado, when Rodrigo sat across the table from the much older, powerful officials he
needed to move, they were confronting not just a good idea, but deeply rooted and life-defin-
ing values: non-egoistic, kindly determination and commitment.
This values-based faith is the ultimate power of the first-class entrepreneur. It is a quality
others sense and trust, whether or not they really fully grasp the idea intellectually. Incluso
though they would not normally want to step out in front of the crowd, a quiet voice tells them
to trust Rodrigo and go with his vision.
Any assessment of Rodrigo’s impact that stopped with his idea, let alone his business plan,
would not have penetrated to the core of his power. Our field has been impoverished by too
many assessments that never get to the essence.
Nor is Rodrigo’s most important impact his schools or the life-changing independence and
mastery he provides his students. Consider the impact Rodrigo has on a community when he
introduces his program. It is not a school created by the government or outsiders. It is a school
created by, funded by, managed by, and staffed by people in the community. The students are
responsible for learning and then making their way. Think how many patterns and stereotypes
are crumpled by these simple and very obvious facts. The psychological impact is a bit like
India emerging from 50 years of falling behind to suddenly being recognized as the new chal-
lenger at the cutting edge of the most advanced part of the world’s economy.
Accompanying this disruption of old patterns of action and perception is another contri-
bution, and I believe it is the greatest one of Rodrigo and every entrepreneur: the idea of cat-
alyzing new local changemakers into being. Unless the entrepreneur can get someone in one
community after another to step forward and seize his or her idea, the entrepreneur will never
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William Drayton
achieve the spread that is essential to his or her life success. Como consecuencia, the entrepreneur
presents his or her idea to the local community in the most enticing, safe, understandable, y
user-friendly ways possible.
Por supuesto, the entrepreneur’s own life story is in itself a beacon encouraging hundreds of
others to care and to take initiative. This also increases the number of local changemakers.
Además, when these local champions then build the teams they need to launch the idea
they have adopted, they are providing not only encouragement but also training to potential
next-generation local changemakers.
As the field of social entrepreneurship has grown and multiplied and wired itself together
across the globe over the last 25
años, the rate of this plowing
and seeding at the local level
has accelerated dramatically.
Ten years ago, the probability of
an idea from Bangladesh affect-
ing a community in Brazil,
Poland, or the U.S. was very
limitado. Now it is common (el
best-known example being
Muhammad Yunus’s impact on
the global spread of microcred-
él) and becoming more com-
mon every year.
Ten years ago, the probability of an
idea from Bangladesh affecting a
community in Brazil, Poland, or the
A NOSOTROS. was very limited. Now it is
common (the best-known example
being Muhammad Yunus’s impact on
the global spread of microcredit) y
becoming more common every year.
As the number of leading
pattern-changing social entre-
preneurs has been increasing
everywhere, and as the geographic reach of their ideas has been expanding ever more rapidly,
the rate of plowing and seeding therefore has multiplied. As have the number of local change-
fabricantes.
This whole process is enormously contagious. As the number of large-scale entrepreneurs
and local changemakers multiplies, so does the number of support institutions, all of these
make the next generation of entrepreneuring and changemaking easier. Not only do people
not resist, but in fact, they respond readily to this change. Who wants to be an object when they
could be changemakers, when they could live lives far more creative and contributory and
therefore respected and valued?
As important as Rodrigo’s impact is on the digital divide and on the lives and communi-
ties he serves, I believe this second dimension of his impact is far more important—especially
at this transitional moment in history.
The most important contribution any of us can make now is not to solve any particular
problema, no matter how urgent energy or environment or financial regulation is. What we
must do now is increase the proportion of humans who know that they can cause change. Y
OMS, like smart white blood cells coursing through society, will stop with pleasure whenever
they see that something is stuck or that an opportunity is ripe to be seized. Multiplying soci-
ety’s capacity to adapt and change intelligently and constructively and building the necessary
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Everyone a Changemaker
underlying collaborative architecture, is the world’s most critical opportunity now. Patrón-
changing leading social entrepreneurs are the most critical single factor in catalyzing and engi-
neering this transformation.1
EVERYONE A CHANGEMAKER
The agricultural revolution produced only a small surplus, so only a small elite could move
into the towns to create culture and conscious history. This pattern has persisted ever since:
only a few have held the monopoly on initiative because they alone have had the social tools.
That is one reason that per capita income in the West remained flat from the fall of the
Roman Empire until about 1700.
Por 1700, sin embargo, un nuevo, more open architecture was beginning to develop in northern
Europa: entrepreneurial/competitive business facilitated by more tolerant, open politics. El
new business model rewarded people who would step up with better ideas and implement
a ellos, igniting a relentlessly expanding cycle of entrepreneurial innovation leading to produc-
tivity gains, leading to ever more entrepreneurs, successful innovation, and productivity gains.
One result: the West broke out from 1,200 years of stagnation and soon soared past any-
thing the world had seen before. Average per capita income rose 20 percent in the 1700s, 200
percent in the 1800s, y 740 percent in the last century.2
The press reported the wars and other follies, but for the last 300 years this profound inno-
vation in how humans organize themselves has been the defining, decisive historical force at
trabajar.
Sin embargo, until 1980, this transformation bypassed the social half of the world’s opera-
tions.3 Society taxed the new wealth created by business to pay for its roads and canals, escuelas
and welfare systems. There was no need to change. Además, no monopoly, public or private,
welcomes competition because it is very likely to lose. De este modo, the social sector had little felt need
to change and a paymaster that actively discouraged it.
Por eso, the squalor of the social sector. Relative performance declining at an accelerating
tasa. And consequent low repute, dismal pay, and poor self-esteem and élan.
By the nineteenth century, a few modern social entrepreneurs began to appear. The anti
slavery leagues and Florence Nightingale are outstanding examples. But they remained islands.
It was only around 1980 that the ice began to crack and the social arena as a whole made
the structural leap to this new entrepreneurial competitive architecture.4
Sin embargo, once the ice broke, catch-up change came in a rush. And it did so pretty much
all across the world, the chief exceptions being areas where governments were afraid.
Because it has the advantage of not having to be the pioneer, but rather of following busi-
ness, this second great transformation has been able steadily to compound productivity
growth at a very fast rate. In this it resembles successful developing countries like Thailand.
Ashoka’s best estimate is that the citizen sector is halving the gap between its productivity
level and that of business every 10 a 12 años.
This rapidly rising productivity means that the cost of the goods and services produced by
the citizen sector is falling relative to those produced by business—reversing the pricing pat-
tern of the last centuries that led to the much-criticized “consumer” culture.
Como resultado, as resources flow into the citizen sector, it is growing explosively. It is generat-
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William Drayton
ing jobs two and a half to three times as fast as business. There are now millions of modern,
competing citizen groups, including big, sophisticated second-generation organizations, en
each of the four main areas where the field has emerged most vigorously: Brazil-focused South
America, Mexico/U.S./Canada, Europa, and South and Southeast Asia. (The field is also grow-
ing vigorously in Africa, the Middle East, Asia Oriental, and Australia/New Zealand, but these are
much smaller clusters.) All this, por supuesto, has dramatically altered the field’s élan and attrac-
tiveness. This is where the
job growth is, not to men-
tion the most challenging,
value-rooted, y aumenta-
ingly even well-paid jobs.
Just listen to today’s “busi-
ness” school students.
[S]ociety cannot significantly increase
the proportion of adults who are, y
know they are, changemakers and who
have mastered the necessary and
complex underlying social skills until it
changes the way all young people live.
Given the results-based
power of this transforma-
tion of the citizen sector,
local
and more
más
changemakers are emerging.
Some of
these learn and
later expand the pool of
leading social entrepreneurs. To the degree they succeed locally, they give wings to the entre-
preneur whose idea they have taken up, they encourage neighbors also to become changemak-
ers, and they cumulatively build the institutions and attitudes that make local changemaking
progressively easier and more respected. All of which eases the tasks facing the next generation
of primary pattern-change entrepreneurs.
This virtuous cycle catalyzed by leading social entrepreneurs and local changemakers is the
chief engine now moving the world toward an “everyone a changemaker” future.
No matter how powerful this dynamic is, sin embargo, several other changes are necessary if
society is to navigate this transition successfully:
(cid:121) Most important, society cannot significantly increase the proportion of adults who are,
and know they are, changemakers and who have mastered the necessary and complex under-
lying social skills until it changes the way all young people live.
(cid:121) Although it is normal for support areas like finance to lag behind change in the operating
areas they serve, the emergent citizen sector is now at significant risk unless it can quickly
engineer major structural changes in both its institutional finance sector and the broad
grassroots sources of support in its post-breakeven zone.
TRANSFORMING THE YOUTH YEARS
There are well over 400 Ashoka leading social entrepreneurs whose primary goal is getting
society to do a far better job of helping all children and young people to learn and grow up
successfully. Each has a powerful, proven, society-wide approach. (Between 49 percent and 60
percent of those elected by Ashoka have changed national policy within five years of their start-
up-stage election.)
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Everyone a Changemaker
Sin embargo, each of these approaches is a partial answer. It is built around one insight or
principle, works through one delivery system, and addresses one or two client groups. Ashoka’s
“mosaic” process brings all these powerful elements together, draws out the few universal prin-
ciples that open major new strategic opportunities for the key decision makers in a field (p.ej.,
en este caso, those who run schools and youth programs), and then markets these principles.
In effect, these mosaic collaborations promise our community the ability to entrepreneur
together, an advance that produces far bigger impact than anything the sum of our solo ven-
tures could achieve.
Roughly two-thirds of these 400-plus youth-focused Ashoka entrepreneurs have learned
the same three powerful principles. Because they need human resources to implement their
vision and cannot realistically get more teachers, they turn to young people. That young peo-
ple are a huge, and in fact usually the only significant available human resource is the first
insight. The other two follow logically: primero, the unconventional assumption that young peo-
ple are or can be competent; y segundo, the idea that one must transform youth communi-
corbatas (p.ej., in schools) so that they become competent at initiating and organizing, and then
train and reward their young people in these skills. Applying these three principles in hundreds
of different ways and across the globe produces strikingly similar and powerful results: moti-
vated students, better academic results, and young people who are experiencing being in
charge. And a very different feel to those schools and programs from the moment one walks
en.
Whether these social entrepreneurs discovered and developed these principles to solve
their staffing problems and/or with broader educational purpose, collectively they have creat-
ed a most powerful set of tools to transform the youth years. Además, the repeated success
they have had in large-scale and highly diverse applications of these principles leaves one with
enormous confidence in the power and practicability of these principles.
Ashoka’s young people’s mosaic also identified another principle that fits closely with this
first cluster: anyone (or any group) who does not master the complex social skill of guiding his
or her behavior through applied empathy will be marginalized. Since this is the enormously
cruel, destructive state of perhaps 30 percent of the world’s people, helping young people mas-
ter empathy is proportionately important.5 One of the best ways of doing so is by encouraging
them to build teams to contribute important changes and/or services. If their team is to suc-
ceed, they must master teamwork, which in turn rests on applied empathy.
Ashoka began developing its mosaic process and the pioneer young people’s application in
1990. Fue, sin embargo, only quite recently that Ashoka realized that its ultimate purpose, un
“everyone a changemaker” world, is an unreachable fantasy unless the youth years become
years of practicing being powerful and acquiring the required underlying skills: applied empa-
thy, teamwork, and leadership. This realization suddenly puts the mosaic’s core principles in a
new light: They are as powerful as they are in large part because they are so key to unlocking
this historical transition.
If young people do not grow up being powerful, causing change, and practicing these three
interlocked underlying skills, they will reach adulthood with a self-definition that does not
include changemaking and a social skill set that largely precludes it. Just as one must develop
strong emotional foundations in the first three years of life or suffer for a lifetime, young peo-
ple must master and practice these social skills and the high art of being powerful in and
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William Drayton
through society while they are young.
Consider how sophisticated the learned skill of applied empathy is: As we contemplate
each action, we must comprehend how it will impact everyone at several removes around us
and long into the future—and then guide our behavior accordingly. Our world now requires
that skill as the ticket of admission to most simple levels of society. A dependably good person
can no longer rely only on rules because they are increasingly in conflict, changing, or have yet
to be developed.
Those without this complex skill will be marginalized. Además, mastering it is only the
first step toward learning teamwork and leadership. Like ballet, these skills require extensive
and real practice.
The children of elite families grow up at home and usually in school being expected to take
initiative and being rewarded for doing so. This confident ability to master new situations and
initiate whatever changes or actions are needed is in essence what defines the elite. Entering
adult life with confidence and mastery of empathy/teamwork/leadership skills is what ulti-
mately has given this small group control of the initiative and therefore of power and resources
for millennia.
Sin embargo, the other 97 percent grow up getting very little such experience with taking ini-
tiative. Adults control the classroom, work setting, and even sports and extra-curricular activ-
ities. And this situation, coupled with society’s attitudes, drums home the message to this
majority: “You’re not competent or perhaps even responsible. Please don’t try to start things;
we can do it far better.” Teachers, social workers and others are comfortably in control; y, en
hecho, most school and other youth cultures are not competent and do not train and support
and respect initiative-taking. En cambio, the peer group culture, not surprisingly, is resentful and
in the worst cultures, quite negative.
Do these inarticulate, frustrated youth cultures bring analogous prior situations to mind?
Over the last century, many other groups—including women, African Americans, those with
disabilities, even colonial peoples—had to make their way from debilitating stereotypes and
little prior practice in taking the initiative to becoming fully accepted, capable contributors.
These groups, although very different from one another, had to travel strongly similar human
and community transformation paths.
Young people are the last big group to set out on this journey. They are also different; pero,
in the underlying psychological and organizational transitions ahead, they can learn a great
deal from the experience of these other groups.
Building on the history of these earlier movements and also on the accumulated experi-
ence of hundreds of leading social entrepreneurs working with young people, Ashoka and
many partners6 have prototyped and are beginning to launch at scale the equivalent of a
women’s or older person’s movement for young people.
Although this movement must ultimately change how everyone thinks about and relates
to young people, it is young people and their peer communities who will have to change most
and who have the most to gain. Por lo tanto, as with all the earlier similar transformations, es
essential that they be central actors—both in actually shifting to the new pattern (because the
best learning comes from action) and in championing the change (because people in any class
are most likely to hear and trust peers).
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Everyone a Changemaker
Mesa 1. The Movement’s Jujitsu: Four Levels of Leverage
Actions
Impacts
In any school, comunidad, or country
each year, ½ of 1 percent of the young
people have a dream and create a lasting
venture.
Each venture engages a team (típicamente 3-
5 in the core group plus 20 who tutor,
entrenador, broadcast, etc.)7
1% of a school or youth community
launches Ventures with on average 25
Participantes. Over two years: 20% a
25% of the whole institution are
engaged, likely «tipping» its youth cul-
tura.
Society questions the current disempow-
ering pattern, builds a women’s/disability
movement for young people. Youth
Venture participants provide role models
and champions. The press joins in.
By leading, these young Venturers
become lifelong leaders. They have mas-
tered the essential skills of empathy,
teamwork and leadership-and irrefutably
know it.
Everyone learns what teamwork, eso
they can lead, and how to do so. Este
further multiplies the next generation’s
proportion of «natural» líderes.
As Venturer peer groups recruit and sell
their work, they can both tip their school
or neighborhood youth culture and also
will wear down old attitudes and logistic
barreras (p.ej., espacio, insurance).
Everyone redefines the youth years and
lives them as a time of expected initiative,
competency, and contribution.
This emergent movement will be far bigger than Ashoka, and once it is past the next six to
ten intensely entrepreneurial years, it will require extensive operating management that is cul-
turally inappropriate for Ashoka’s “collegial/intrapreneurial” essence. Ashoka has therefore
created an independent but close partner, Youth Venture. Working closely with Ashoka’s young
people “mosaic” team, it has the lead in major spread and emerging operating work.
How to launch and build such a movement?
Ashoka, Youth Venture, and their partners are following a strategy that exercises enor-
mously powerful jujitsu-like leverage; leverage that works on four mutually reinforcing levels.
They are summarized in Table 1.
Each of these four levels in Table 1 needs the others. But they will not snap into place
together or everywhere in society instantly. This makes the job facing the pioneers much hard-
er than it will be for their successors; and it requires a phased, several-stage strategy.
The central challenge is getting to the scale where the synergies between these four levels—
and across schools, neighborhoods, and regions—kick in and become irreversibly self-multi-
plying. Ashoka/Youth Venture, recognizing this is the heart of the matter, has been experiment-
ing with a dozen different avenues and is gaining increasing traction. Here are some examples:
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William Drayton
(cid:121) Partnering with national organizations with many chapters (p.ej., the Girl Scouts) or broad
reach (p.ej., Youth Services America).
(cid:121) Co-venturing with public-spirited corporate partners, including experimenting with
engaging staff, local units, and key customers as nominators, Youth Venturer Allies, and local
organizers. (Most recently with Staples in Europe and Latin America).
(cid:121) Communicating the stories of Youth Venturers broadly and encouraging others through
media partners (including a growing relationship with MTV in the U.S. and Mexico).
(cid:121) Using Internet avenues to recruit, ayuda, and network Venturers, Allies, and local Partners.
(cid:121) Extending Youth Venture’s online “Virtual Venturer” program, which allows young people
to become Venturers even in communities without an established organizational presence.
(cid:121) Replicating the successful United Way model developed in North Central Massachusetts.
After two years, almost all the schools have multiple Youth Venture teams; the area’s commu-
nity college gives college credit for high school Venture work; and virtually all young people
in the area experience multiple Venture models. Four other local United Ways are moving to
seguir, hopefully followed by many others and also community foundations.
(cid:121) Partnering with a subject matter segment of the citizen sector (p.ej., the environment) a
support Youth Venture teams in its field as a means of seeding future leadership.
(cid:121) Building a network of stand-alone, volunteer-led local Youth Venture organizations akin to
the vast majority of Scout, 4-h, and Little League groups (experiments underway in four
metropolitan areas).
(cid:121) Breaking through with groups of schools, p.ej., those served by an Ashoka Fellow or where
we can get support from the leaders of a school system. This is more school system leveraged
than working school by school although we welcome individual schools as long as the lead-
ership comes from them.
(cid:121) Building links to youth communities (p.ej., punk rock bands, debate groups) built around a
common interest and that cut across institutions and geography.
(cid:121) Getting to scale locally: Using all avenues in a few medium-sized metropolitan areas or
small provinces or states (p.ej., New Hampshire).
Although the movement is far up the learning curve, all that means is that the pace of
experimenting/learning is accelerating and broadening. It needs many more partners who are
excited by this movement-building challenge of accelerating to scale, and who will join in
experimenting, adapting, and pushing.
And it needs to communicate its alternative vision for the youth years and ultimately for a
rapidly multiplying proportion of the population who have the power to change things.
As the number of young leaders increases and spreads, this job becomes easier and easier,
not least because such Venturers usually gain confidence once they see that, in addition to
being the founders of a newspaper or a program to help new immigrant youth or a peer-to-
peer counseling service, etc., they are pioneers in an historic moment.
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Everyone a Changemaker
NEEDED: NEW SOCIAL FINANCIAL SERVICES
Citizen organizations of all types and sizes urgently need a new social financial services system.
Where can two 15-year-old African American girls go when they need $900 seed funding to launch a teen-to-teen late-afternoon confidential telephone hotline? Or a 14-year-old who needs $800 startup and working capital to buy T-shirts to imprint and sell in order to fund an
Ecuadorian support group of young people with diabetes? Or a group of boys who need funds
to seed what eventually will became a successful effort to build a municipal skateboard park?8
They cannot go to a foundation or a government agency. They typically cannot even open
their own bank account. What if their parents cannot or will not pay? Or if it is important to
the young people to do it on their own (so they can do it their way)?
As we have just seen, society’s core interests are in making it easy, not impossible, for young
people to take initiative and build ongoing services. But our existing financial services institu-
tions fail us.
This is only one of many such failures of today’s social financial institutions.
Going to the other end of the sophistication scale, consider how the structure of govern-
ment grant agencies and foundations makes it extremely difficult for either institution to serve
leading social entrepreneurs. The people try hard, but the structural barriers are formidable
and firmly set. De nuevo, given how central social entrepreneurs are to what is society’s greatest
historical opportunity now, this failure is extremely costly.
What leading social entrepreneurs need and what today’s dominant social financial insti-
tutions—governments and foundations—can provide conflict point by point:
Social entrepreneurs need social investors who will value new ideas. The most important
innovations cut across the disciplinary and organizational boundaries created to solve old
problemas. Governments are bound by narrow, rigidly and impermeably bounded “stovepipes”
defined by legislation and refined ever more narrowly by the organizations and regulations
that follow. Foundations are captive to internally formulated “strategies,” their institutional
stovepipes, and staffs who typically follow specialist lateral career paths. Además, a program
officer confronting a crosscutting idea will have to learn more, think harder, and consult and
share decision-making much more than when facing a familiar idea that neatly fits his or her
programa. (Can you imagine what would have happened to the digital revolution if its entre-
preneurs had to fit similar strategy/stovepipe straightjackets created by Deutsche Bank or Bank
de América?)
Social entrepreneurs need and deserve loyalty. Their work is not a job; it is their life. Y
ellos son, day by day and year after year, central to the iterative process of creation that is the
essence of the value being built. But making and sustaining the commitments that would con-
stitute loyal partnering requires judgment, very-long-term perspective, and true understand-
ing of entrepreneurship—all of which are difficult for large institutions to muster.
Social entrepreneurs need medium- to long-term and often substantial investments. Ellos
must test and refine an idea (an inherently unpredictable process), learn how to market it and
cause many other institutions to change (also resistant to tight scheduling), and then build an
institution and movement. Almost all governments and foundations, guided by their own
internal one-year budgeting imperatives, provide one-year funding.
Social entrepreneurs need support in building strong, major institutions; governments and
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William Drayton
foundations avoid the “overhead” this would entail.
To some degree, it is natural for change in financial and other support services to lag
behind a transformation of the operating institutions. There is, sin embargo, considerable risk that
these financial institutions will not adapt adequately or at all.
Unlike business financial firms, neither governments nor foundations must respond to
their clients.
Governments are sensitive to political stimuli, but these synapses often do not come from
the clients being served. Development agencies are an extreme case: Their end clients have no
leverage; it is the contractors who do. En esto
caso, the resulting misalignment of incentives
may be worse than in the typical foundation
caso, where clients are as a rule no more than
supplicants.
[S]ociety’s core interests are
in making it easy, no
impossible, for young people
to take initiative and build
ongoing services. But our
existing financial services
institutions fail us.
There are further systemic reasons why
governments and foundations fail the citizen
sector. Their structure keeps them from see-
ing and often from serving whole classes of
potential clients well. Además, because they
are not subject to competitive discipline, ellos
do a poor job of rewarding high performing
citizen groups and closing or merging poorly
run ones. Society’s resources are, consequent-
ly, allocated poorly. Worse, the citizen sector
cannot become as productive as business as long as this undisciplined condition continues.
A notorious example is the dramatic variation in performance between the numerous
microcredit institutions in the Chicago area. Some have almost perfect payback rates and low
general administration and sales ratios. Others perform dismally. Hasta ahora, the institutions invest-
ing in these funds barely seem to notice.
Sin embargo, commercial competitive microcredit investment funds could not afford such
inattention. A fund that invested in any of the losers would end up with a lower return for its
investors and only one or two stars (out of five) on the Morningstar mutual fund rating serv-
ice.
If the incumbent institutions seem unlikely to transform themselves to provide the types
of services a rapidly evolving and increasingly diverse citizen sector now needs so urgently,
where can the sector look? To the enormous, highly competitive, client-focused for-profit
financial industry. It provides business a kaleidoscopic diversity of services that are minutely
fitted to client needs and that change, if anything, faster than the clients.
The first for-profit financial firms that recognize that there is a huge, highly attractive new
business waiting to be born here and that open it up will profit handsomely—and make a pro-
found contribution.
There are many factors coming together now that make such a move timely. The citizen
sector is now both very large and the fastest growing sector of society. It also has many large,
solid institutions.
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Everyone a Changemaker
Al mismo tiempo, there is huge existing, and more latent, demand for quality social invest-
mentos, with varying mixes of social and economic return and in different subject matter and
geographic areas. There also is huge actual and latent demand for engagement in the social sec-
colina. People want access to quality personal opportunities ranging from volunteering and
internships to full careers for themselves and their families and friends. They also want to spot
and land the new business/social opportunities that are now developing. A smart bank will
develop a web of products and services that will allow its bankers to serve every investor client’s
individual needs with a tailored package of varying mixes of financial, social, and engagement
valores.
Along with my colleagues in Ashoka’s Business Entry program, I have identified roughly
40 building-block financial and service products that, when combined orchestra-like in vary-
ing combinations and with varying pricing, can offer banks and other financial institutions a
very large, profitable new business. This business will enable these institutions to bring huge
value to a very wide range of clients—from teen beneficiaries of a skipping trust9 to a high
active net worth entrepreneur ready to sell his/her business and redeploy both resources and
career.10 The strategy here is to demonstrate just how profitable and attractive this business is
to new clients. The immediate work is to develop and refine the building block products in the
crucible of the full product-development process and, most critical, to direct client feedback.
This is not about a new product. Or even a number of new products. It is about building
a major new business that will link varying types and classes of investors with diverse investee
needs through equally diverse (and varying over time) canales. At one time the banks did not
invest in art or even real estate. Now those areas are integral, and clients expect them.
The transaction costs of government and foundation grant-making, taking into account
only the direct (not opportunity) costs to donor and donee, now run 20 a 45 por ciento, rough-
ly 10 times what is normal for business finance.11 This difference offers huge scope for finan-
cial firms to find efficiencies and capture some of the savings through fees.
Although some components of this new business’s product orchestra will be labor inten-
sive and custom-tailored, it is critical to have a large number of high-volume component prod-
ucts. Large volumes are necessary to drive down per-transaction costs, which is essential for
modest or merely wealthy investors and competitively key even for the sophisticated very
wealthy.
The now-huge socially responsible investment industry achieved this scale chiefly by
investing in subsets of existing financial stocks and bonds that exclude objectionable (p.ej.,
tobacco, brazos) securities. The new commercial microcredit funds that have been introduced
over the last few years are the first major example of the next step: the for-profit finance indus-
try profitably providing direct investments in citizen-sector work to the broad public. Ellos son
able to do so because there are 120 a 150 grande, safe, well-established microcredit lenders, con
clear, stable track records, in whose securities these funds can invest large sums safely without
incurring significant expense (relative to investment) in case-by-case due diligence reviews.
Although this success is enormously encouraging, it is far, far from enough. It illustrates
the principle, but it cannot provide either the volume or the choice the huge latent demand
necesidades, let alone what is required to build a substantial business for the industry overall.
Por lo tanto, a critical part of the Ashoka strategy to encourage for-profit finance firms to
enter the social financial services business is to catalyze the development of many, very large,
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William Drayton
reasonably uniform and safe, and therefore securitizable, new classes of social investment. El
single most important source of these new investment opportunities flows from our graceful-
ly named business/social “hybrid value-added chain” (HVAC) trabajar. This work originated in
another major “mosaic” collaboration, this one across roughly 400 Ashoka social entrepre-
neurs whose work is focused on ensuring full economic citizenship to everyone. A good many
of these working toward this
goal have found powerful
leverage in reconnecting busi-
ness with the newly entrepre-
neurial/competitive citizen-
sector through new value-
added chains
en
diseño, producción, distribu-
ción, servicing, and parallel
supports including finance.
The new, more productive
value added chains draw for
each step in the chain whatev-
er each side can contribute
most effectively and efficient-
ly. Sin embargo, this work has typ-
ically been limited to one
product or service in one
country; and these early cases
were held back by the relative
The transaction costs of government
and foundation grant-making, tomando
into account only the direct (no
opportunity) costs to donor and
donee, now run 20 a 45 por ciento,
roughly ten times what is normal for
business finance.11 This difference
offers huge scope for financial firms to
find efficiencies and capture some of
the savings through fees.
involved
immaturity of the citizen sector organizations at the time.
Ashoka’s HVAC strategy is to get four very different products/services quickly to the point
where the customers, negocios, and citizen groups are all benefiting enormously from the
new cooperative value-added chains. Once the businesses in an industry see one of their com-
petitors gaining important new markets and making significantly higher profits, they cannot
afford not to follow. The same is true for the organizations that compete with the pioneer
HVAC citizen groups, once they see how much their competitors are benefiting from large, sta-
ble, nonpolitical, new revenues and their new, unique ability to provide valued new services to
their clients. This competitive dynamic is key to the jujitsu that allows Ashoka, a small force,
to set in motion so large and irreversible an historical change.
Setting this same, huge structural change in motion in four very different industries will
make it clear that something far bigger than an industry-specific innovation is at work. El
HVAC principle will apply to most, probably all, areas of human endeavor. Once this frame-
work becomes clear and is widely grasped, everyone can begin looking for possible applica-
tions to their areas of work.
A key example: many a smart management consultant will make partner by building
his/her firm’s HVAC practice. They will seek out such high-yield opportunities, bring them to
potential clients, and then do the required design and institutional adaptation work. Porque
they will do this work regularly, they will be able to build practices serving managers who do
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Everyone a Changemaker
not have this experience. This response is key because it will institutionalize the catalytic work
Ashoka now has taken on.
Business schools and business writers will also be key players in helping spread awareness
of the HVAC idea and in reporting on and helping to systematize the knowledge underpinning
the field as it develops. There is also extensive work for the emerging institutions of the citizen
sector to do here.
Sketching the story of one HVAC on which Ashoka is working will help make this change
more concrete:
Over most of the planet small farmers do not have access to drip irrigation equipment. Él
is not profitable for the piping and irrigation firms to serve them. The companies’ costs are too
high for the poor rural economy, and the companies do not understand or trust the small
farmers or their environment.
In Mexico, a partnership between Amanco (the leading piping company in Latin America),
Ashoka, and local citizen groups is now beginning to demonstrate how to close this gap.
Over the last decade, grande, competent citizen groups have developed to serve small farm-
ers. Their cost structure is that of the “other Mexico,” that of the poor and of the rural areas.
They understand and have the trust of their clients. Además, the sector has increasingly mas-
tered relevant skills ranging from large-scale/low-cost organizing to knowing how to help poor
people save reliably.
These now large, skilled, economic citizen groups can provide the missing bridge between
the company and a huge untapped new market, between the farmers and access to a technol-
ogy that will provide them with more income, more stable income, water conservation, y
environmental benefits.
Everyone benefits enormously.
The farmers earn much more, more securely.
The environment benefits, and the country produces more, more reliably.
The first citizen groups to join are the only source, at least for a while, that can provide
these benefits to their farmer clients. This gives them a huge competitive advantage vis-à-vis
both government and other citizen groups. Además, they get the same markup that business-
es playing similar roles in bigger markets receive—a huge (especially relative to their cost
estructura) and growing revenue flow that is also independent of governments and founda-
ciones.
Amanco will be the first into this market and should settle in long term with a significant
compartir, even recognizing that competitors will follow. The company has established key rela-
tionships and is quickly coming up the learning curve to mastering this new market, cual es
making it harder and harder for others to catch up quickly.
Sin embargo, competition will come. Citizen groups that said no when Ashoka first
approached them, fearing the risks (and in some cases feeling uncomfortable partnering with
negocio), are watching and beginning to wonder where they can find such a deal. Business will
probably respond even more quickly. In a second HVAC area, slum reconstruction, a major
global competitor to the company with which Ashoka began this work decided it had to jump
on this new approach four months after the first HVAC collaboration began if it was not to fall
behind in accessing this huge new market.
Each of the HVACs creates very large, reasonably uniform financing needs across the
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William Drayton
globe. These eminently financeable needs in turn become a critical source of the attractive new
products needed to fuel the new businesses waiting to be born in the for-profit finance indus-
intentar.
To the degree these needs come from a business/social marriage, they will be even more
attractive to the finance industry and to many clients. This will reduce the price discount that
risk-averse investors attach to anything unfamiliar. It also builds in a further acceleration of
learning and therefore of productivity growth for both business and citizen sectors.
Learning will accelerate further as the two sides overcome the differences in style, idioma,
and clothing, and the mutually suspicious stereotypes that developed over the last several cen-
turies of deepening division. The people on both sides will bridge these gaps, not because
doing so is socially nice, but because it is essential for their respective core interests: negocio
wants these markets, and the citizen groups want to deliver these goods to their clients and
gain financial and political independence.
The HVAC delivering drip irrigation to smaller farmers generates two sound lending
opportunities:
The large, stable, competent citizen groups providing the bridge between company and
farmers need bridge financing when starting up until they reach breakeven.
Far bigger is the need to help the farmers obtain credit so they can buy this substantial cap-
ital asset. Loans to farmers for drip irrigation should be attractive to lenders for two reasons:
(1) there is security and (2) the farmers will stop making many other payments long before
this one, given how central this equipment is to their economics. Once the mechanisms are
desarrollado, such loans could quickly become a gigantic financial product class given that cap-
ital equipment and many millions of modest farms are involved.
The same pattern holds true for the urban slum reconstruction HVAC, where Ashoka’s
work is also far advanced. Similar logic but somewhat different specifics will produce yet more
financing opportunities in one HVAC after another. Each requires extensive financial engi-
neering and then marketing; but the cumulative effect, especially as the competitive jujitsu in
each area kicks over, will be a tsunami of large-volume, low-unit transaction cost, profitable
for everyone, and offering new investment opportunities.
Getting the for-profit finance industry to enter the social financial services field is entirely
critical if the citizen sector is to obtain the inventive, adaptive, responsive, and efficient insti-
tutional services it so urgently needs.12 Investor demand does not create the bottleneck. El
chief obstacles are: primero, inadequate flows of high volume, diverse, attractive investment oppor-
tunities; second and simply, insufficient imagination to see so large a strategic opportunity.
If anything, the need for profound change is even greater when it comes to how the citizen
sector supports itself once groups pass beyond the early years when institutional finance is key.
Citizen groups, very much like businesses, have a three-stage life cycle. They start with a
self-financing “garage” incubation period. Then they gear up for a time of service and product
testing and refining and also of institutional formation that often requires significant institu-
tional investment. Eventually they move onto a “post-breakeven” mature phase, where citizen
base or grassroots resources coming in must at least equal expenditures. Outside the U.S. y
a handful of other countries, this citizen base is entirely inadequate.
This inadequacy poses a profound strategic risk to both individual groups and the citizen
sector overall. As we have seen, the sector is now large and growing explosively. Foundations
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Everyone a Changemaker
cannot touch this scale of need. Governments, if they were not increasingly under pressure to
economizar, could provide the needed resources. In many cases they would like to do so, both to
ensure the provision of needed services and to reestablish control over the citizen sector. Este
es, por supuesto, a danger the groups and the sector cannot afford to run. Dependency on govern-
ment was precisely what caused the sector to fall so far behind business from 1700 a 1980.
The only alternative is to build the sort of broad base of citizen support that underlies
every sector of society that does not have the power to tax and that has become secure and
steady: negocio, religión, trade unions, social clubs, even the schools of samba that enable
poor neighborhoods in Brazil to prepare and mount Carnival groups every year.
This base has four main components: people’s time, dinero, information in and out, y
captive businesses. The mix that works will vary by field and institution. Sin embargo, any institu-
tion that cannot find a mix that works for it is unlikely to survive long.
The challenge here is not to get Brazilians or Poles to be more generous. They give gener-
ously now, but only to groups that ask, and ask intelligently—be they the churches or the
schools of samba.
The citizen sector is new. In most countries it is just now reaching the stage where there
are a significant number of reasonably stable, mature, clearly focused institutions ready to
build such broad citizen bases. El reto, entonces, is closer to home. It has to jolt the citizen
sector itself to grasp that it must and can go out and build this new sustainable, long-term
foundation.13 And, at the same time, to help it learn how.
WHERE WE ARE GOING
The daily news is chronically dispiriting, a reportage of follies that seem to be taking place in
a world without a compass.
That is probably so in part because this is a time when deep historical tides are moving
with unprecedented speed and force.
The millennium when only a tiny elite could cause change is coming to an end. A genera-
tion hence, probably 20 a 30 percent of the world’s people, y luego 50 a 70 por ciento, not just
today’s few percent, will be changemakers and entrepreneurs. That world will be fundamental-
ly different and far safer, happier, more equal, and more successful place.
To get there, we must end the infantalization of young people. They and the rest of us must
enable all young people to be fully creative, initiatory, and powerful changemakers.
We must also build the wisest possible financial and other institutions so that, as these
young people become adults, the new citizen sector will draw them fully into an “everyone a
changemaker” world.
We invite reader comments. Please send an email to
1. As Ashoka has come to understand this more clearly, it has clarified its ultimate goal. Challenged several years
ago by eBay’s Pierre Omidyar, Ashoka came to understand, given its understanding of these historical forces it
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William Drayton
came into being to serve, that its ultimate goal is an “everyone a changemaker” world. Before that, it had talked
chiefly in terms of the intermediate goal of building an entrepreneurial/competitive citizen sector.
2. Interview with economist Will Baumol in his office. See also, William J. Baumol, The Free-Market Innovation
Machine (Prensa de la Universidad de Princeton, 2002).
3. The “social” or “citizen” half of the world’s operations includes education (estudiantes, faculty, organizaciones),
salud, ambiente, emergency relief, rural and slum development, human rights of all sorts, and all the other
areas of human and environmental needs–except when these needs are served by the business other half.
Eventually the distinction will fade as the accidental division created over the last three centuries of rapid business
productivity growth and social-sector stasis erodes.
Ashoka and a growing number of other citizen sector organizations ask that everyone stop defining us as not
gobierno (NGO) and not business (“nonprofit”), respectivamente, the European and American first reactions to our
newly emerging sector. It does not make sense to define half of society by what it is not. We suggest the use of “cit-
izen sector” and “citizen organization” instead. One or more citizens caring and organizing to provide a service or
spark a change are the active ingredients. Y, as this paper articulates, our most important impact is our “every-
one a changemaker”—aka citizen—role.
4. Ashoka was conceived in the 1960s to serve this historic transformation, but it only began work in 1980 cuando
it perceived that the time was ripe.
5. Canadian Ashoka Fellow, Mary Gordon, and her Roots of Empathy program, is one example of the innovation
building in this area. See Mary Gordon, Roots of Empathy: Changing the World Child by Child, (Thomas Allen
Publishers, 2005).
6. These partners in the U.S., Por ejemplo, range from the Girl Scouts to Staples, from MTV to a growing number
of local United Ways and schools.
7. Youth Venture’s experience in the U.S.
8. These are typical of the sort of venture Youth Venture has found among teens in the U.S.
9. A skipping trust gives income from capital for a generation, but not the capital. Skipping a generation, the prin-
cipal is distributed to the grandchildren of the person who created the trust.
10. Ashoka is engaging with partner institutions to pioneer/demonstrate this new business. As this product and
business development work proceeds and partners agree,
it will report on these developments at
11. William F. Meehan III, Derek Kilmer, and Maisie O’Flanagan explain the reasons for this, in Investing in Society,
Stanford Social Innovation Review (Primavera 2004): “For starters, [government and foundations do] not have cost-
efficient transaction processes, when compared to for-profit benchmarks.
In the for-profit capital market, com-
panies spend between $2 y $4 raising capital (p.ej., legal, marketing, and administrative expenses)—for every
In the social capital market, sin embargo, nonprofits spend between $10 y $24 for every $100 ellos $100 they raise.
earn through fundraising (p.ej., obtaining donor lists, sending direct mail, or making phone calls). Nonprofit chief
executives, mientras tanto, spent between 30 y 60 percent of their time pursuing donations with such ‘soft costs’
unevenly accounted for in fundraising costs. Foundations and government grantors, mientras tanto, spend about $12 a $19 on administration (including general overhead and reviewing grant applications) for every $100 they allo- cate. Federated givers, those intermediary organizations such as the United Way and Jewish Community Federation that collect individual donations and then allocate dollars to charities, spend approximately $13 mil-
lion for every 100 to cover their expenses. That means that in the social capital market, the cost of raising capital
consumes roughly 22 a 43 percent of the funds raised, a dreadfully inefficient process.”
12. Ashoka is also pursuing several other, complementary strategies. One is its new Social Investing Venture (SIV)
programa. The SIV program seeks out leading entrepreneurs anywhere in the world who are championing major
structural change in social finance. It helps them get started and succeed and will work to enable them to share
and collaborate with one another, with leading operating social entrepreneurs, and with thought leaders in the
social investment field.
13. Ashoka’s Citizen Base Initiative is pursuing three specific strategies to help tip the citizen sector’s perception
and behavior. Ver
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