SOCIAL ENTREPRENEURSHIP FOR DEMOCRATIC GOVERNANCE AND PEACE
EXPERT ROUNDTABLE: WEDNESDAY MAY 27, 2015
Carnegie Endowment for International Peace
1779 Massachusetts Avenue NW, Washington DC
FRAMING DOCUMENT
Introduction
The purpose of this document is to frame the issues that we are planning to address during the
Roundtable so that all of you come to the event with a common understanding of the discussion and are
familiar with the key questions that we hope to address together.
Peacebuilding and Democratic Governance
Many of you may be unfamiliar with the world of peacebuilding and democracy building. In a seminal
document produced by the Alliance for Peacebuilding in 20111, the multi-disciplinary field of
peacebuilding was mapped and analysed. The report described a field with deep roots in peace studies,
nuclear disarmament, alternative dispute resolution, mediation, and conflict resolution. The field began
to take shape after the end of the Cold War and throughout the 1990s, in response to the fall of the
Berlin Wall and the conflicts in Rwanda and Bosnia. Over this period, the field matured into a rich array
of organizations operating in the spheres of both process (such as mediation and negotiation) and
structure (building resilient institutions). This is what we refer to as Peacebuilding 1.0.
The peacebuilding sector has continued to expand, influenced by the terrorist attack on September 11,
2001 and the wars in Afghanistan and Iraq into key related sectors such as development, democracy,
food security, health, and genocide prevention. As of 2012, peacebuilding has been incorporated into
the missions of the United Nations, the United States Armed Forces, the US Government, the private
sector, large development organizations, and a broad range of social change organizations. While the
field has grown exponentially in both impact and influence, it lacks the cohesion to operate most
effectively in fragile, chaotic zones of conflict around the world. In order to reach its full potential, the
field must move from Peacebuilding 1.0—the existing dynamic yet disconnected series of peacebuilding
activities across a broad range of sectors—to Peacebuilding 2.0—a more unified field that harnesses the
collective energy of all peacebuilding interventions and creates joint impact that leads to more stable,
resilient societies.
The challenge of Peacebuilding 2.0 is to coordinate, communicate, and learn across the current
disparate sectors as well as understand how a more expansive field can operate beyond the sum of its
individual parts. Recently, there has been talk of a Peacebuilding 3.0 which emphasizes a new, dynamic
systems approach to peacebuilding. The field has begun to acknowledge complexity theory and systems
theory as offering a valuable perspective on how we should approach the task of peacebuilding and the
promotion of democratic governance, focusing on understanding the complexities and dynamics at work
and then shaping them toward better outcomes. A key part of this agenda is achieving integrated
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Peacebuilding 2.0 Mapping The Boundaries of an Expanding Field (2012 Alliance for Peacebuilding)
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intervention and interoperability between the humanitarian and emergency/crisis response,
peacebuilding, development, human rights, health, and education fields.
The survey of 44 US-based peacebuilding organizations (all members of the Alliance for Peacebuilding)
and 75 other NGOs in closely related fields showed that for the US-based organizations the focus of their
work was primarily on core peacebuilding and conflict resolution processes, with over 90 percent
working on social cohesion and trust building. Their work also covered a diverse array of other sectors,
including development, human rights, women, and youth across 153 countries and at all points on the
conflict spectrum (before, during and after conflict). Many reported operating with extremely limited
financial and human resources, with more than 60 percent operating on peacebuilding budgets of less
than $500,000 per year.
Social Entrepreneurship for Democratic Governance and Peace
Every week there seems to be a new webinar or publication that is announced on how civil society
organizations (CSOs) are finding new ways to develop new earned income streams. There currently
seems to be a flourish of activity among CSOs around new entrepreneurial ventures and the adoption of
new business models to diversify income streams to enhance their sustainability and impact.
There are multiple drivers behind this surge in activity including the blurring of lines between public and
private goods, opportunities arising from emerging markets and changes in the funding landscape. CSOs
are exploring new ways to diversify their funding owing to the increased competition for both
government and Foundation grants and the increase in the availability of other forms of funding such as
social investment capital. The results from the US State of the Nonprofit Sector Survey show that the
greatest concerns nonprofits had over the past two years were associated with financial sustainability.
In 2014, when asked to name the three "greatest challenges" their organizations were facing out of a list
of 22, the top two cited by nonprofits were "achieving long-term sustainability" (41 percent of
respondents), followed by "diversifying funding sources" (21%).2 In 2015, “Achieving long-term
sustainability” topped the list again with 32% of respondents citing this challenge.3
Historically, CSOs have engaged in a broad range of fundraising and business oriented activities to
diversify their income streams and generate additional earned income. Traditionally, this has included
fee-based services, event financing, donations and philanthropic giving, endowment funding,
membership subscriptions and other commercially generated revenue4.
Although these different approaches collectively describe the range of strategies that CSOs have
adopted to enhance their sustainability, the initiative Partners is engaged in and the topic for
discussion at the Roundtable focuses on one dimension of this effort, how local civil society
organizations are developing commercial fee-for service activities and other business activities to
generate earned income.
2
Nonprofit Finance Fund, “2014 State of the Nonprofit Sector Survey,”
http://nonprofitfinancefund.org/files/docs/2014/2014survey_natl_full_results.pdf
3 Nonprofit Finance Fund “2015 State of the Nonprofit Sector Survey,” http://nonprofitfinancefund.org/state-of-the-sectorsurveys
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NAVIGATING THE FUTURE: Making Headway on Sustainability for Social Accountability Organizations, Lester M. Salamon,
Stephanie Geller, S. Wojciech Sokolowski, Johns Hopkins Center for Civil Society Studies, GPSA Working Paper 2, Dec 2014
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One way of conceptualizing the set of issues surrounding this challenge for local peacebuilding CSOs is
set out in the graphic below.
We are aware that many organizations are engaging in activities designed to earn income. For example,
within the Partners Global Network there are many examples of this kind of activity.

Partners Albania engaged with banks to provide training to the top management on customer
care, management, supervision, (online) sales, and communication. They are also working with
a Canadian Drilling company as their implementation partner for the CSR Foundation.

Partners Georgia created a for-profit arm to deliver capacity-building for businesses. PartnersGeorgia builds the customer service and human resource management of corporate clients,
which include local and international banks. In addition, Partners-Georgia provides a variety of
trainings and contracted services including the following: customer relations and effective sales;
communication with citizens; effective service delivery for marginalized groups; recruitment
through interviewing; personnel motivation; and participatory planning to key leaders in the
private sector.

Partners Mexico has worked on wind energy in the south of Mexico running multi-stakeholder
dialogue processes with developers of wind farms, communities and landowners. Partners
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Mexico is looking to create a trust fund with the contracts that it has with companies to reinvest
back in to community oriented projects.

Partners Poland has created a for-profit business providing mediation services to individuals
and businesses which provides roughly 30% of the organizations income.
Other examples of organizations adopting business-like approaches to generate earned income include:

The Contact Project is a for profit LLC that uses the science of complex systems, contemplative
practices, and collaborative processes, to cultivate listening, patience and respect so that
individuals are able to address conflict, difference and diversity with greater understanding.
They assist individuals, communities and organizations in developing these essential tools for
peace. The business model they use is based on a combination of ability to pay and subsidized
services. They charge a competitive market rate for organizational development and leadership
trainings to private sector organizations and CSOs that can pay and provide subsidized or free
services to communities and groups that cannot.

CDA Collaborative Learning has a long history of engaging the corporate sector promoting the
development of positive, constructive relationships between companies and the local
communities where corporate operations take place. CDA engages individual corporations as
partners, advising them about social responsibility strategy and incorporating conflict sensitivity
and human rights considerations into their community relations approaches.

Smart Kolektiv pioneers the promotion of the CSR concept in Serbia. The organization is guided
by the idea of connecting business and society in finding ways to apply business logic and
experience to the solution of social problems. Smart Kolektiv helps companies to cooperate
articulately and strategically with the community, while helping various social groups to get the
business sector’s attention to their needs and initiatives. Smart Kolektiv devises and puts into
effect campaigns that initiate positive changes in society. It operates through four key programs:
corporate social responsibility, social innovation, youth entrepreneurship and social marketing.
It administrates the Business Leaders Forum Serbia.
Recently, we have seen some new forms of entrepreneurial endeavors based on creative funding
partnerships designed to secure additional earned revenue streams and take organizations’ work to
scale. Typically, these have been undertaken by larger CSOs in the broader development field. Pact,
Mercy Corps and Counterpart are good examples of organizations that illustrate this new business
mindset.
The PACT Institute, a subsidiary of Washington D.C.-based NGO, Pact, focuses on programmatic
innovation, best practices for utilization of information technology, networking analysis, thought
leadership, partnerships and productization, all designed to complement Pact’s larger programmatic
portfolios of international development projects in Africa and Asia. Pact Institute works with donors
such as the Rockefeller Foundation; the Bill and Melinda Gates Foundation; the GE Foundation; the
Coca-Cola Foundation; Chevron; the Global Fund; the United Nations Development Program; IOM; SIDA;
Danida; the EU; ITRI; and others. The PACT Institute is responsible for encouraging innovations across
the organization with hundreds of ideas generated every year leading to a selection of the more
promising ideas that are taken forward for light business planning. Their approach to looking at what
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assets the organization has or what products can be ‘monetized’ has contributed to the adoption of a
more business-like mindset within the parent organization, PACT.
Mercy Corps has supported two innovative platforms to pursue their organizational commitment to
pioneer paths out of poverty, to forge new partnerships, to create solutions that break through
entrenched challenges. Their Social Venture Fund recognizes that the traditional grant-based model of
funding international development is limiting. They argue that it rarely promotes the flexibility and
experimentation required to test new models — models that could deliver social benefit to millions of
people in the developing world. Capitalized by philanthropic contributions, the Social Venture Fund
provides early-stage financing to create and grow scalable, self-sustaining businesses that improve
people’s lives in an enduring way. For example Mercy Corp has invested in a microfinance network
covering Bosnia, China, Indonesia, Kazakhstan, Kosovo, Kyrgyzstan, Mongolia, Tajikistan designed to
provide products that protect small businesses and fledgling assets in communities reeling from
disaster, conflict or transitioning economies; a MicroMentor scheme in Tunisia, Guatemala, Mexico,
United States that provides small business owners with guidance from an experienced mentor to
increase the chance of business survival; Microinsurance Catastrophe Risk Organization (MiCRO)
covering Haiti and Nicaragua providing small businesses hit by recurring catastrophes with products that
provide an economic safety net for clients, mainly women, after severe natural disasters; Tiendas de la
Salud in Guatemala, a micro-franchised network of health stores responding to the lack of adequate
health services supplying high-quality, low-cost medicines in rural areas (spun off and now owned and
operated by Guatemala’s largest pharmaceutical company). Their USAID-Skoll Innovation Investment
Alliance has committed to investing $44.5 million in order to scale up ten social ventures over the next
five years across a range of sectors and geographies by providing grants, and other forms of financing.
Organizations are selected for funding directly from the pool of U.S. Global Development Lab or Skoll
Social Entrepreneur award winners.
Counterpart has just set up The Social Sector Accelerator, a new start-up non-profit venture that is
dedicated to accelerating and improving the impact of all types of investments in the social sector. Its
primary service line helps corporations and foundations significantly increase social returns of their
international philanthropy by overcoming barriers to performance at the local level. The Social Sector
Accelerator will find innovative ways to apply and improve upon Counterpart International’s expertise in
selecting, monitoring, and strengthening local partners. The Accelerator also plans to develop a
certification program that distinguishes local organizations around the world as capable partners for
philanthropic organizations.
Social Impact Investing: Is this relevant for peacebuilding?
Another trend that is apparent in the development field (although little explored by the peacebuilding or
democracy building community) is the use of social impact investment. A recent study of the
sustainability of social accountability organizations has noted that “there is a virtual revolution now
underway in the availability of investment capital for social-purpose activity. The heart of this revolution
is a massive explosion in the tools of philanthropy and social investment, in the instruments and
institutions being deployed to mobilize private investment resources in support of social and
environmental objectives. Where earlier such support was limited to charitable grants and gifts made
available directly by individuals or through charitable foundations or development assistance
organizations, now a bewildering array of new instruments and institutions has surfaced in the social-
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purpose finance arena loans, loan guarantees, private equity, barter arrangements, social stock
exchanges, bonds, secondary markets, investment funds, and many more”.5
Social impact investing is a growing body of practice which has mainly been applied to areas such as
sustainable agriculture, affordable housing, accessible healthcare, clean technology, and financial
services. To date, there have been few examples of social impact investing to transform conflicts,
promote accountable governance and democratic stability. The question is, how relevant is this form of
funding for peacebuilding CSOs?
Read about examples and the growth of Social Impact Bonds here.
Challenges
For CSOs considering engaging in business oriented ventures to generate earned income there are a
range of challenges to overcome. First, there is the challenge of identifying services or products that
might be brought to market (and this in a sphere where peace is the ultimate public good). There is the
challenge of overcoming an organizational culture that is geared to respond to calls for proposals from
governments or Foundations for grants. The leadership, skills and capabilities to develop and launch a
new set of products and market those products or services are quite different from this grant reliant
modus operandi. There is the challenge of how a non-profit deals with ‘profits’. Local laws and customs
play a big role here, with some environments being more permissive than others. Connected to this, are
choices to be made about what entity is best to undertake these new business ventures. In the U.S this
involves choices between the not for profit vehicle (501 (c)(3) entity), a for profit LLC or the relatively
new B Corp ‘business for good’ entity (a new type of company that uses the power of business to solve
social and environmental problems). For the peacebuilding field there are questions about whether we
could access social impact financing like social impact investments, Social Impact Bonds or Pay for
Success contracts. The challenge of developing services or programs that could generate a return on
investment in the peacebuilding field would seem to rule out this form of financing for much of the work
that we do. An associated challenge are the rigorous metrics for success that come with this form of
financing that CSOs are required to meet. Then there are the ethical issues of engaging with businesses
and taking a more business-like approach. What are the reputational risks for CSOs of taking money
from corporations and how might this affect perceptions of political independence.
Next Steps
This Roundtable meeting is not a one off event. It forms part of an initiative that Partners is leading on
providing better support for local organizations to develop new fee-for-service activities that will help
sustain their operations and enhance their impact on democratic governance and peace. The project is
supported by the PeaceNexus Foundation, the Seattle Foundation and GE Foundation. One of the
products from this initiative will be a capacity-building program for local organizations throughout the
world to discover new business partnerships and funding models to make their work in democratic
governance and peace more sustainable - which we plan to share widely. Your input will be invaluable
in shaping these materials early in the design process to make them both practical and innovative. At
the recent Alliance for Peacebuilding Conference
Guiding Questions
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NAVIGATING THE FUTURE: Making Headway on Sustainability for Social Accountability Organizations, Lester M. Salamon,
Stephanie Geller, S. Wojciech Sokolowski, Johns Hopkins Center for Civil Society Studies, GPSA Working Paper 2, Dec 2014 p. 13
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Below are some key questions that we will address during the day.
1. What are the new forms of social entrepreneurial business activity being pursued by local CSOs
involved in promoting democratic governance and peace, or other social impacts? (DISCOVERY)
2. What seem to be the factors that determine the effectiveness of these ventures? What are the
obstacles that CSOs face in engaging in this type of work and what solutions are being found?
(EXPLORATION)
3. What is the value proposition of the work of local peacebuilding, what are the potential
products and markets and how can we make the case for sufficient investment? How relevant
do you think social impact investing is for the kind of activities/services local peacebuilding and
democracy building organizations might be able to develop? (EXPLORATION)
4. What kind of thinking do we need to bring to take our work to scale? (EXPLORATION)
Purpose & Objectives for the Roundtable
Core Purpose: How can local CSOs working on democratic governance and peace turn their expertise
and assets into a line of products and services that will generate sustainable income?
Objectives:




To explore current examples of partnership approaches and fee-for service activities undertaken
by local CSOs to generate revenue,
To explore untapped potential of fee-for-service activities and other business-oriented activities
(income earning) to help sustain CSOs working for democratic governance and peace, to
enhance their impact and their financial and political independence,
To identify the challenges (and potential solutions) of developing fee-for-service/business
activities for democratic governance and peace, including: organizational culture/leadership
capacities, technical, legal/social/political, and ethical challenges,
To identify concrete ways forward for local CSOs wanting to embark on developing more feefor-service/business activities to promote their mission in this field.
Definitions6
Social entrepreneurs are people who apply the techniques of business and innovation to solve social
problems.
Social innovation is what they do, and social enterprises are what they create. Social enterprises may
be new, stand-alone, economically sustainable organizations, or they may involve change and
innovation within existing structures.
Social impact investing is a subset of socially responsible investing, but while the definition of socially
responsible investing encompasses avoidance of harm, social impact investing actively seeks to make a
positive impact – investing, for example, in non-profits that benefit the community or in clean
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American University, Social Enterprise Program Website http://www.american.edu/sis/socialenterprise/
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technology enterprises. Impact investments have the Triple Bottom Line of generating social and
environmental impact alongside a financial return.
A Social Impact Bond is an arrangement between one or more government agencies and external
organizations where the government specifies an outcome (or outcomes) and promises to pay the
external organizations a pre-agreed sum (or sums) if it is able to accomplish the outcome(s). The
external organizations would typically involve an implementing organization and a socially minded
investor. The approach is an innovative financing vehicle for social programs that flip traditional
government funding structures on their head. Instead of paying upfront for a proscribed set of services,
SIBs allow government to focus funds on approaches that work—without paying a dime if agreed-upon
outcomes are not achieved. SIBs work by bringing together government agencies, social service
providers, and philanthropically minded financiers to achieve better results for people receiving social
services and for the taxpayers funding those services.
‘Peacepreneurs’ are social entrepreneurs working to promote peace.
By Nick Oatley 20 May 2015
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