Bags to Butterflies
Exploring the Should Zone
Many of you may remember the old TV
show, Twilight Zone. That famous opening
“You have now entered the Twilight Zone”
can still transport many of us to that TV
screen or an unnerving episode.
Welcome to the modern day social enterprise
and impact investing version of zone.
We have named it “The SHOULD Zone.”
If you ask any social enterprise how many times they
have been told they SHOULD be a different legal
structure, they will immediately knee-jerk out a
number that will probably throw you back.
If they are a non-profit beginning to generate a
revenue in an attempt to reduce donor fatigue, they
will be told they SHOULD become a for-profit. If they
are a for-profit tackling a tough social mission with
their product, staff, or existence, they will often be
told they SHOULD be a non-profit. It is almost
dangerous to get any for-profit social enterprise into a
conversation about attempting to gain access to a
grant even though they have heard more than 100
times that they SHOULD qualify. The truth is, often
they don’t. Good intentions can send many down the
rabbit hole wasting precious time and resources.
The recent courageous impact investors are,
unfortunately, not immune to the finger-pointing. As
we watch early adopting impact fund managers
attempt to raise capital, they are often told they
SHOULD be a non-profit, SHOULD ask for higher
returns, SHOULD leave this impact funding to the
CDFIs and, generally, SHOULD get out of the way.