Attend any conventional entrepreneurship bootcamp and you will witness a decent amount of focus on the “business” end of things. After all, that is the purpose of such entrepreneurial activities – to have a financially lucrative venture. The profit motive is paramount.
Social innovators, on the other hand, tend to focus on other metrics, and rightly so. Unfortunately, attention to the financial sustainability of their venture is often overlooked as something unnecessary or as somehow diluting the altruistic nature of their mission. This faulty reasoning has a huge negative impact on their venture and is a leading cause of its premature demise.
There are some key reasons for this lack of business and financial savvy among social innovators.
- Many social innovators have a background in the social sciences, arts, or engineering, and consequently have no formal exposure to the knowledge or tools of basic finance. Most colleges neither encourage nor facilitate this crucial learning.
- In the world of social changemaking, anything tinged with the tools of capitalism is often viewed with mistrust and cynicism, if not outright hostility. Finance and business are four-letter words to many social changemakers.
- Financial and business savvy are outside the purview of many academics who work in social change. This is unfortunate, because finance can be one of the most potent and creative components of a social innovator’s toolbox.
A MOST POWERFUL DEVICE
Finance, like all tools, can be wielded for good or greed. And, to be fair, it has been used for the latter in spectacularly vulgar and destructive ways. But that doesn’t lessen its potency as a force for positive change.
Consider the following:
- Knowing the different kinds of financing sources and their benefits, limitations and drawbacks can help raise the appropriate capital for your project.
- Examining and evaluating different revenue models and financing options for your product or service can mean the difference between adoption and avoidance by your target audience.
- You can better budget your limited resources through realistic financial modeling of your income and expenses.
- By tracking financial metrics along with social ones, you can rapidly assess the longer-term viability of your project or venture.
- Recent advances in decentralized finance (DeFi) are promising to revolutionize the social innovation landscape in unprecedented ways. Incorporating the latest DeFi technology could help provide an edge to your venture as well as vastly improve its reach and impact.
- Knowing how to build economic capital (including how you can monetize your passions and interests) opens up a world of personal and professional possibilities, allowing you to work on the things you value and care about, without constant worry of your financial circumstances.
Building economic capital is one of the six pillars of NovaMapping. You learn how to use the tools of finance for your personal and professional benefit. You no longer need to subscribe to the false dichotomy that has long plagued social innovators – you can make the world a better place AND be financially rewarded for doing so.