Insight Report
Beyond Organizational Scale:
How Social Entrepreneurs
Create Systems Change
May 2017
Prepared in collaboration with the Bertha Centre for Social Innovation & Entrepreneurship,
University of Cape Town Graduate School of Business, South Africa
SCHWAB FOUNDATION FOR
SOCIAL ENTREPRENEURSHIP
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Bertha Centre for Social Innovation & Entrepreneurship,
University of Cape Town Graduate School of Business.
The Bertha Centre for Social Innovation and Entrepreneurship is a specialised unit
at the University of Cape Town’s Graduate School of Business (GSB). Established
in 2011 in partnership with the Bertha Foundation, the Centre has become a
leading academic centre in Africa. In collaboration with the GSB, the Centre has
integrated social innovation into the business school curriculum, established a wide
community of practitioners and awarded scholarships to students from across
Africa. The Centre pursues social impact towards social justice in Africa, through
teaching, knowledge-building, convening and catalytic projects with a systems lens
on social innovation.
Motsepe Foundation
The Motsepe Foundation’s main focus is poverty alleviation, creating employment
and improving the living standards of the poor and marginalised communities in
South Africa. It funds sustainable projects that improve people’s wellbeing and
help individuals become self-reliant.At the global level, the Foundation works
with regional and international partner organisations to supportvarious initiatives
including education, health, climate change, research and social entrepreneurship.
3Beyond Organizational Scale: How Social Entrepreneurs Create Systems Change
Contents
4 Preface
9 Five Lessons for Systems Change
10 Lesson 1: Embrace complexity and adaptability
11 Lesson 2: Build the evidence base
12 Lesson 3: Create, convene and coordinate coalitions
13 Lesson 4: Engage government
15 Lesson 5: Shift systems with humility
16 Strategic Questions for Social Entrepreneurs
18 A Message to Funders
19 Introduction to Case Studies
21 Case Studies
22 Child & Youth Finance International
26 Fundación Escuela Nueva
30 Landesa
34 Nidan
38 Sproxil
42 VillageReach
47 Terminology
48 Contributors
4Beyond Organizational Scale: How Social Entrepreneurs Create Systems Change
Every week we hear a different version of the same story
from a social entrepreneur: “I have developed a proven
education model and it makes a meaningful difference in at-
risk children’s lives. Ten years on, we’re only serving 1,500
children a year. How am I supposed to reconcile the number
of children we are reaching with the fact that tens of millions
of children need these services in my country alone” You can
replace the word “education” with healthcare, sanitation, job
training, housing or any number of other complex problems
for which social entrepreneurs have created innovative
approaches to solve. And you can add two or even three
zeros on to the end of that direct benefciary fgure, yet the
overall sentiment remains the same.
The Schwab Foundation for Social Entrepreneurship
manages the largest late-stage network of social
entrepreneurs in the world – including the trailblazers that
a generation of business school students have read as
case studies and looked up to as role models. In other
words, the social enterprises in our network have achieved
scale. By any objective standard, their numbers are
staggering:VisionSpringhas increased the productivity and
incomes of more than 3.5 million poor people through the
sale of glasses in Asia, Africa and Latin America, creating an
economic impact estimated at $280 million. First Bookhas
elevated the quality of educational materials for low-income
children by distributing more than 160 million books and
resources to schools and educational programmes across
North America.
Yet when you talk to virtually any social entrepreneur in our
community, they will describe their impact as a “drop in the
ocean” and say things like: “I’m not even 5% of where I want
to be.” They are proud of their achievements, and they have
a right to be; their interventions have improved and, in some
cases, radically transformed the lives of millions. Even so, it is
hard sometimes to avoid the conficting feelings so eloquently
described bya Schwab Social Entrepreneur as “being
responsible for an island of success in a sea of despair.”
For a sector that has long been obsessed with the holy grail
of organizational scale, the social entrepreneurship sector is
now coming to terms with the limits of incremental growth.
The needs are just too large and urgent; the models for
scaling we have developed thus far remain too narrow and
simply take too long. Conventional scaling models borrowed
from the private sector, such as branch replication, social
franchising and open-source dissemination, seem woefully
inadequate when aiming to create meaningful social change
for entire populations.
A few forward-thinking funders, for their part, are also
starting to grapple with many of these same questions.
How can our funding strategy evolve beyond a portfolio of
fragmented interventions How can we make “big bets” so
our philanthropic and investment dollars catalyse enduring
change
Perhaps not surprisingly, then, many highly successful social
entrepreneurs who have achieved signifcant scale, along with
the intermediary organizations and funders that support them,
are starting to coalesce around the concept of “systems
change.” It can go by different terms, including “equilibrium
change” and “transformative scale,” but many people still
confate these concepts with the operational scale of single
organizations. On the contrary, we believe that you can run a
small organization and still change a system.
Since we are a community of practitioners offering actionable
insight to other practitioners – “by social entrepreneurs for
social entrepreneurs” is our motto – we would like to offer a
practitioner defnition of systems change coined by Martin
Fisher, Co-Founder and Chief Executive Offcer of KickStart
International, for readers of this report: “fundamentally, and
on a large scale, changing the way a majority of relevant
players solve a big social challenge such that a critical
mass of people affected by that problem substantially
beneft.” For more details on how we defne this and other
terms, please see page 47.
The objective of this research report is to help practitioners
understand what systems change means in the context of
social entrepreneurship, how it is distinct from direct service
or “business-in-a-box” models and, most importantly, what it
looks like in practice – not as lofty exhortations and abstract
concepts, but as a s