Hilde Schwab – recognizing the best
It is amazing the difference one person can make in the life of another: the passion one person can stir; the determination one person can effect; the hope one person can inspire.
For Hilde Schwab, co-founder and president of the Schwab Foundation for Social Entrepreneurship, Muhammed Yunus was that person. When Hilde Schwab and her husband, Klaus, met Yunus, few people knew of him. Today, many years later, Yunus is world-renowned for developing the concept of microcredit, as the founder of Grameen Bank in Bangladesh and as the co-recipient of the 2006 Nobel Peace Prize.
“At that time,” Mme Schwab recalls, “we said it was very strange [that nobody knew of Yunus] because he helps millions of people out of poverty by putting a very, very clever idea into practice. I told my husband then that we should create a foundation with the purpose to look out for other people like Muhammed, people who must be around the world but who nobody knows.” And that’s exactly what they did.
Turning a dream into reality
Hilde and Klaus Schwab set up the Schwab Foundation for Social Entrepreneurship a decade ago with the aim to search for outstanding individuals or organizations that have innovative ideas to address the big social problems of our times.
The foundation is based on the idea that individuals are embedded in societal communities in which the common good (including the success of the economy) can only be promoted through the interaction of all participants. With this in mind, the foundation aims to promote social entrepreneurship as a solution to the social, economic and environmental problems facing the world.
The foundation was financed by an endowment made by the Schwabs. Today it works with a small group of partner organizations who are particularly interested in working with social entrepreneurs and support the search and award process.
Each year, the foundation selects between 20 and 30 social entrepreneurs worldwide. Initially, the foundation ran a global competition and selected individuals irrespective of their country. In 2005, however, in an effort to raise awareness and get the media’s attention for social entrepreneurship, the foundation set up dedicated media partnerships in more than 20 countries. Together with their various partners, they selected a social entrepreneur of the year in each country. Today, the foundation has gone one step further and not only has country-specific selections, but also regional selections.
The most important criteria for selection are innovation, direct social impact, reach and sustainability, with emphasis being placed on the latter.
“It’s important that it’s not a purely donation-dependent organization but rather an organization that can get a large part of their budget on their own,” explains Mirjam Schöning. “We look for quite established entrepreneurs, those that already have a reach and scope and a demonstrated model.”
Rather than give grants to its social entrepreneurs or invest in their organizations, the Schwab Foundation creates various opportunities, mostly through the World Economic Forum, for their entrepreneurs to gain access to networks that would otherwise be inaccessible to them. Hilde Schwab says that in the past decade, these networks have proven to be invaluable in mobilizing the financial and in-kind resources needed to strengthen and expand the entrepreneurs’ organizations.
“As entrepreneurs, we are always seeking ways in which we can increase our visibility, as well as ensure our credibility, be more effective and better prepared to do so, and be heard when important decisions are taken,” says Suzana Padua, the 2009 Social Entrepreneur of the Year, Brazil.
In Brazil, the award is co-sponsored by the Schwab Foundation and Folha de São Paulo, the country’s largest newspaper. As a result, Padua says that not only has her organization, the Institute for Ecological Research, received some much-needed attention, but so has the cause they are fighting for.
Why social entrepreneurship
“In the beginning,” says Hilde Schwab, “I had to explain what social entrepreneurship is and often began with what it is not; it is not philanthropy, it is not charity and it is not corporate social responsibility – but it is real entrepreneurship with a social purpose.”
A social entrepreneur can broadly be defined as a person who applies practical, innovative and sustainable solutions on a large scale to solve social problems in general, but specifically those that affect marginalized and/or poor people. In the same way that business entrepreneurs try to create or transform entire industries, social entrepreneurs seek to transform society using opportunities and methods often overlooked by other people and companies.
In Hilde Schwab’s view, social entrepreneurs are often the best people to address problems in society because they understand the issues and challenges more intimately and can therefore provide key insights. Having said this, she says it has taken many years for businesses to recognize and appreciate their value and importance.
“Many social entrepreneurs tell us that ten years ago they were treated like some exotic addition to the programme and they were looked at as the poor cousin. But this has changed dramatically,” she says. “Businesses are much more open to talking to social entrepreneurs who have new ideas and who have new technologies that can be used, for example, to fight poverty.”
According to Hilde Schwab, as businesses come to better understand the causes of the financial crisis and the subsequent effects thereof, they have come to realize that their focus should be on creating long-term strategies that benefit the economy and society. As a result, she says, many people now see social entrepreneurship as an opportunity to deliver meaning at a time when other “returns” seem less appealing.
Challenges facing social entrepreneurs today
Although the need for social and economic transformation is greater than ever before, funding for social entrepreneurship projects and companies has decreased.
“Those [companies] that are not financially sustainable have big problems because funding, not to say that it’s stopped, has slowed down dramatically,” Hilde Schwab says. “But if they have a sustainable model from the start, they will survive. We should not forget that these are people who had terrible difficulties starting their operations so they are used to fighting. They never give up.”
She points out, however, that social entrepreneurs can be successful despite uncertain market conditions and volatile environments.
Nick Moon and Martin Fisher founded KickStart in 1991. The organization helps rural entrepreneurs in several African countries identify viable business opportunities and access the technology required to get them started. When the post-election violence broke out in Kenya in 2007, 600,000 people were displaced, farming ground to a halt and there were severe food shortages throughout the country. Instead of packing up and leaving, KickStart launched Imarisha Maisha, a project aimed at getting people back to work by supporting 17,000 people irrigate 5,000 acres of land. Not only did the project get people back to work, but the produce from the land helped lower the cost of food for thousands of people in the country.
Although the current economic downturn has created further challenges for social entrepreneurs in obtaining access to credit and funding, Hilde Schwab believes people could learn from organizations like KickStart and see the recession as a time of opportunity.
The next 10 years – finding the best
The Schwab Foundation celebrated its 10th anniversary at the World Economic Forum Annual Meeting in Davos earlier this year.
In the last decade the foundation has helped put the notion of social entrepreneurship on the map. “We think we can be important for social entrepreneurs worldwide if we continue our work in the way we are doing now,” explains Hilde Schwab. “Every year we add about 20 or 30 new social entrepreneurs to our network and the challenge for us is to find the best ones who can serve as role models and inspire many young people who want to engage in this field.”
Article by Alinka Brutsch