Entrepreneurs face unequal challenges even before getting in an investor's door. Data illustrates disparities in the social innovation sector.
Where are the women?
Over the last several years, Echoing Green has seen a decrease in the number of women Fellows selected relative to men. The last six out of seven Fellowship classes have been majority male and the past two years have seen a particularly sharp dip in women Fellows.
This has us thinking. What’s going on?
We’re certainly not the only organization thinking about this. Five of our peer organizations, including Ashoka, Draper Richards, Ranier Arnhold, New Profit, and Unreasonable Institute have noted a similar challenge. And Acumen Fund recently hosted a women’s salon, gathering sixty-five women to share their stories, insights, fears, and hopes about impact and global development.
It’s not very different on the investor-side either. The ratio of female to male investors is virtually non-existent. A 2008 survey of the venture capital association showed that 14 percent of directors, partners, and principals at VC firms were women. And according to the National Venture Capital Association, there are 462 venture capital firms in the United States, but only one is run by a woman. As it turns out, this particular firm is interested in both social and financial returns on its investments.
In the UK, women are almost as likely to participate in a “social entrepreneurial” activity as men, but of the 55,000 social enterprises in the UK, only one out of six are led by women. In the U.S., women in high-ranking positions at nonprofits are paid less than men. And while women hold more leadership positions at organizations with budgets of one million dollars or less, men are the predominate leaders at nonprofits withmuch higher budgets.
Through a series of discussions led by her social enterprise Evolutionize It in Belgium, Ashoka Fellow Christina Jordan has found that “women are turning to social entrepreneurship because they tend to work more with their hearts….their work is an extension of how they see the world.” So why aren’t we seeing more prominent female-led enterprises? Jordan found that men tend to take on more large, scalable enterprises, while women are more driven by tangible impact, most likely concentrated in a local community.
As social enterprises continue to evolve, so too are the business models that drive them. The percentage of Echoing Green Fellows launching an organization with a for-profit or hybrid model has risen from 29 percent to 53 percent of organizations just in the past few years. While the gender balance among nonprofit Fellows has stayed fairly even, Fellows launching for-profit and hybrid models are predominately male.
Why are for-profit and hybrid models run by men?
We’re finding that it has a lot to do with education. For-profit social enterprises tend to be more technology-driven—and more often than not, led by MBAs. More men than women obtain MBAs and are more likely to come from technology or engineering backgrounds. In our particular case, data is showing that the average age of Fellows is skewingyounger—men tend to take risks at a much younger age, while women develop their confidence with experience. But this is an industry-wide trend that is forcing us to question how we are encouraging young women, in particular, to consider social entrepreneurship as a career.
If social entrepreneurship is a sector that naturally tends to foster and develop male leaders, is it our responsibility to provide opportunity, training, and support for women?
We say yes. Not because women may be missing from the sector, but because when more women are included in a group, its collective intelligence rises. General convention is that diversity is good, different perspectives are important, but as Professors Anita Woolley, at Carnegie Mellon, and Thomas Malone, at MIT Sloan, say “the more women, the better.” Women are charismatic leaders and they tend to care more about the development of their teams. They are strong mediators, excellent networkers, they value building relationships more than men—and they keep their heads during a crisis. Women care so deeply about the impact they want to create in the world, they develop succession plans more frequently than men.
An obvious point—women are critical to social change. But, a lack of women in the sector is a systemic issue that will require a systemic approach—it’s not just about electing more female Fellows, at Echoing Green, or Ashoka, or Unreasonable, but rather an approach that will require all of us to address the root cause of the problem—to actively encourage and support more women to identify themselves as entrepreneurs. This won’t happen overnight, or maybe even next year.
It’s definitely something we are thinking about. We’re taking a close look at our Fall recruitment for the 2012 Fellowship and how we can encourage women leaders to engage their networks in finding, coaching, and ultimately supporting more women social entrepreneurs. It’s only the first step, but in the social change sector where opportunity and inclusion are at the core of what many of us are trying to drive, it’s a critical one.
What ideas do you have to ensure more women take the plunge to launch their ground-breaking solutions?
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