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Silicon Valley is a fertile source for the new social entrepreneurialism. Young, high-flying businesses are often eager to do good, but have no idea how to begin. They need a matchmaker like Gib Myers of Menlo Park, Calif. While toiling for the venture capital Mayfield Fund, he watched novices transform themselves overnight into multimillion-dollar firms. He decided to enrich them in other ways, and two years ago, he formed the Entrepreneurs' Foundation to use profits from successful new businesses to fund entrepreneurial service organizations. Says Myers: "A lot of these companies say, 'We want to do something for the schools,' or 'We want to do something environmental.' We set it up."
The Entrepreneurs' Foundation approaches good works as a service-supply industry. Client-company officials choose a cause they want to support, and the foundation puts together a service plan for the firm and its employees that reflects the corporate culture. The foundation raises endowment money in the form of stock options from young companies, most of them prepublic start-ups. In its first two years, the foundation signed up 60 firms; seven have since gone public, putting some $9 million into the foundation's coffers. Through its efforts, companies like Argonaut Technologies, Sylantro Systems and Silicon Light Machines have cleaned beaches, renovated dilapidated houses, organized blood drives and toy drives, and painted rooms at a shelter. The foundation introduced a Berkeley, Calif., company, KnowMed Systems, to a disadvantaged elementary school a few blocks away, and employees go there weekly to help children with reading, writing and math. "We want this to be a standard of the Bay Area," says Myers. "We want to change the culture of the entrepreneurial sector."
At the seven-year-old Initiative on Social Enterprise at Harvard Business School, cultural change is the essence of the curriculum. A graduate program helps give those who want to do good works the kind of organizational, profitmaking and management skills they need to thrive. "The for-profit economy is driven by a bottom line, and the nonprofit is driven by a different one," says Allen Grossman, formerly CEO of Outward Bound, who helps teach a course on entrepreneurship in the social sector. "Hooray for the difference, but we have to be flexible and borrow as much from both as is appropriate."
From June to December last year, three Harvard graduate students worked on plans for Boston's Mayor Thomas Menino to consolidate a dozen disparate city-run services into the Office of Business Development. Their research led them to recommend a holistic approach called the "balanced scorecard." Used by companies like Mobil and Cigna Insurance, this approach ties performance directly to a strategic plan, offering incentives and rewards to employees who meet their goals. Says Hannah Wu, one of the trio: "It's a way to bring social-enterprise thinking as well as everything we're learning about management techniques together in one place."