A business approach to social change

Andrew Wolk is founder, president, and chief executive of Root Cause, a Cambridge nonprofit that creates partnerships between the nonprofit and private sectors. He recently authored "Business Planning for Enduring Social Impact," a how-to guide for socially entrepreneurial organizations. He spoke with Globe reporter Sacha Pfeiffer.

What exactly is Root Cause?
We are working to look for enduring solutions to social and economic problems by supporting social innovators and educating what we call social impact investors.

Do you think the general public understands what that means?
No, I don't think they necessarily do. In laymen's terms, we are focused on organizations that are marrying business principles with a passion for social impact, and we are trying to educate anyone who provides resources - philanthropically or otherwise - and would like to link that to measurable social impact.

What motivated you to start Root Cause?
My grandfather was a 25-year councilman in Pittsburgh who devoted his whole life to public service and actually created a great amount of change. He was considered one of the founders of smog control in the '50s. My father was a decades-long successful Wall Street executive. I had started and sold a restaurant delivery business and found myself more attracted to what business could do in marrying those business principles with social impact. Those two worlds came together for me, and I found my purpose. In the variety of activities we do at Root Cause, the common theme is: What can we learn from the private sector? Not that the private sector does everything right. But what it has been able to do is successfully find, invest in, and scale business models. And that has created hundreds of millions of jobs and hundreds of millions of dollars of wealth. So how can we take those same concepts and find, invest in, and scale the most effective, efficient, and sustainable solutions to social problems? We fundamentally believe there are solutions out there that are working, but that we have just not created an efficient enough system to identify and support and scale the solutions that are actually working.

Do you think of nonprofits as businesses?
Yes. It's unfortunate we have created the term nonprofit, because it's given people a false understanding of what they are. All it really is is a tax status and nothing more. Nonprofits have revenue, balance sheets, income statements, and cash flow statements. They're run like businesses. The only real difference is their expected outcome. In the business world, the expected outcome is return on investment. For nonprofits, the outcome should be some level of social impact according to their mission.

Some people think of nonprofits as inefficient operations. Do you think that's a deserved stereotype?
I think you can find an inefficiency in any sector. However, there has been over the last decade a huge proliferation in the number of nonprofit organizations overall. By my recent calculation, in the last 10 years there's been an 84 percent growth rate. Some say 115 new nonprofits start a day. If you equate that to the variety of issues we're faced with in the country, whether poverty or access to education or healthcare, there is a significant opportunity to generally improve the efficiency, effectiveness, and sustainability of nonprofits - not unlike there has been a significant opportunity that's been capitalized on for consulting to for-profit businesses, and even government agencies, to make them stronger and better. And the nonprofit sector is under-resourced for doing those things, which is giving Root Cause an opportunity to do its work.

Can you sum up your new book in a sentence or two?
It's targeted primarily to existing nonprofit organizations, but we think government agencies, as well as for-profits focused on solving social problems, will find it helpful as well. The overall reason we wrote the book was not only to share our methodology, but if you go to a bookstore you'll find countless books on how to write a business plan for a for-profit business, and all of them basically have the same outline. But there isn't a book on how to write a business plan to solve a social problem.

What do you consider the most innovative nonprofit in the Boston area?
One of them - and I'm happy to give you other examples - is Close to Home, which is working in the domestic violence field. Close to Home's basic premise is that without community involvement, we will be unable to solve this problem. Over the past 10-plus years, a mechanism has been put in place for people who are victims of domestic violence to go somewhere, and that is certainly an important piece to have in place. But how do we prevent domestic violence from happening in the first place? What Aimee Thompson, the founder, found is that most people who are victims of domestic violence, and most people who know about it, say nothing. If you think about what Mothers Against Drunk Driving has done, it's now embedded in us that if we're at a party and someone is drinking, someone asks, "Who's driving?" It's natural now. Amy has a very innovative model, which has been working out of Dorchester now for six or seven years, to try to make domestic violence part of the conversation.


Source: http://www.boston.com/business/articles/2008/05/11/a_business_approach_to_social_change/?page=full


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