Cheryl Dorsey is a trailblazer in the social entrepreneurship movement. In 1992, she received a fellowship from social impact talent spotter and global nonprofit Echoing Green to help launch The Family Van, a community-based mobile health unit in Boston. Ten years later, she became the first fellow to head the organization.
Dorsey served in the White House under two presidential administrations, and her tireless efforts have earned her numerous awards, including the Robert Kennedy Distinguished Public Service Award. She has a medical degree from Harvard Medical School, a master’s in public policy from Harvard Kennedy School, and a bachelor’s degree in history and science from Harvard-Radcliffe Colleges.
Dorsey recently joined Katherine Klein, vice dean for the Wharton Social Impact Initiative, for an episode of the Dollars and Change podcast to talk about the purpose and mission of Echoing Green. Listen to the podcast at the top of this page or keep reading for an edited transcript of the conversation. (Find more episodes here.)
Katherine Klein: Cheryl, it’s great to talk with you. Tell us, what is Echoing Green and what do you do?
Cheryl Dorsey: Echoing Green has been a pioneer and pillar and anchor organization in the field of social innovation. We’re an early-stage funder of emerging, best-in-class social entrepreneurs. Our job is to go out and source next-gen talent, vet it, and then invest in it and help it to grow in scale. We take a very focused and intentional approach when identifying and supporting the leader of that social enterprise because we really believe that developing a cadre of best-in-class leaders is a direct pathway to driving positive social change.
Klein: I think you use the term social entrepreneur to describe these founders. Can you define this term?
Dorsey: Most people trace the origins of the field of social entrepreneurship, social innovation back to 1980, when two key organizations were founded. One was Ashoka, which was all about identifying this new-fangled, social-sector actor called the social entrepreneur, who was identifying and scaling ideas to drive positive social change. The other was New Ventures, which was started by Ed Skloot to focus on the sustainability of social enterprises and nonprofits. It has been those two streams of work over the years that have come together to be what we identify today as social innovation.
Very simply, social innovation is what we consider to be the process of developing and deploying effective solutions to challenging, often systemic, social and environmental issues in support of social progress. I should be clear that the work of social innovation is a broader concept but does include the work of social entrepreneurs. So, social innovation is the entire system, of which the work of social entrepreneurs is a part.
Quite often, people will point to some very successful examples of social innovation, which would include microfinance, the fair-trade movement, and the charter school movement. But fundamentally, I think the zeitgeist of social innovation is this notion of the blurring of sectoral boundaries. It’s bringing together civil society, the market, and the state in a way that creates new and shared public value. It’s still a new but growing and increasingly robust field. It’s about how to use innovation as a disruptive tool to accelerate the pace of social change.
Klein: It’s probably useful to say that you don’t necessarily distinguish or prefer for-profit versus nonprofit structures. The goal is social innovation that is long-lasting, high-impact, and sustainable. Is that accurate?
Dorsey: That’s absolutely right. Echoing Green has always been agnostic about what we fund, where we fund in the world, or the corporate form that that leader presents to us when she applies to the fellowship. The only thing that is non-negotiable is: Do we believe we are seeing a best-in-class, high-impact leader of promise who’s got a really interesting, innovative idea to drive significant social change?
We’re about 35 years old now. For the duration of our history, most of our applicants and fellows have come into the network running pretty traditional nonprofits. They’ve got a 501c3 form. But 2006 was the first year that we saw a significant number of applicants proposing for-profit, double-bottom-line or triple-bottom-line social enterprises. That was about 15% of our applicant pool that year. Each year subsequently, we’ve seen an uptick to the point that about 50% of our applicant pool every year does, indeed, propose these for-profit corporate forms. I think it just speaks to the fact that a lot of these young, next-gen leaders recognize that there’s simply not enough philanthropic capital to solve our social and environmental problems at scale. Recognizing how to crowd in different forms of capital to engage in the work of social impact is one of the key and enduring trends of the social innovation space today.
Klein: Talk to us about the process. You receive many applications from all over the world, and your acceptance rate is very small. How are you selecting these fellows? What happens once they’re selected?
Dorsey: The application process is something that we continue to iterate on and try to make a more generous, open, equitable, inclusive process. Echoing Green, from its founding principles, has always believed in believing in the entrepreneur. We believe in our entrepreneurs, so we try to build a robust outreach process, inviting people to share their hopes and dreams with us. We crowd-source our vetting process, where every year we engage upwards of 800 volunteers from all over the world who spend their precious free time helping us read through and evaluate these applications that come to us from 160 countries.
We certainly do privilege the voices and the input and insight of our fellows because they know Echoing Green. They know the community. They know the journey of what it means to be a social entrepreneur, so we very much incorporate a peer-led, peer-to-peer vetting process that allows applicants to share their ideas over the course of about six months. In many ways, we’re walking along their early-stage development, business model journey with them. The application [process] includes two rounds of written applications, which we believe helps them refine and hone their idea. We’re not trying to make the application onerous. We want it to be additive, to help them on their journey, regardless of whether they become an Echoing Green fellow.
The final step of the process is the ability to meet in person these wonderful applicants. In an era of a pandemic, the in-person opportunity to spend some time with these folks is not possible, but we’ve shifted that process virtually to the best of our ability. Through conversations over the course of a couple of hours, hopefully getting to know the spirit and the soul of these entrepreneurs and pressure-testing some of these ideas, we have to make the very tough decision of whom we invest our very limited resources in.
We’ve got a rubric of scoring criteria that has about four criteria through which we evaluate the leader, and three or four criteria through which we evaluate the enterprise. We take much more seriously and weigh much more heavily the leadership potential because, again, we believe in the power of talent to drive change around the world.
We believe that passion is the catalytic fuel that allows the entrepreneur to do the work she needs to do, despite all the roadblocks that will be in her way, which brings us to the second quality that we’re trying to suss out: resilience. We know that failure is a significant part of the entrepreneurial journey. I think failure is an important part of the learning process. What do you do once you fail? How do you get yourself back up and dust yourself off?
A quality that we see time and time again in the Echoing Green network is resource magnetism. It is a different quality than charisma. It’s really about the stickiness of the leader, recognizing that these leaders are part of, and are building, social movements. Their ability to attract various forms of support to their cause — whether it be financial support, volunteer support, media attention — and their ability to draw in and mobilize levels of support is an important quality for the work that they’re trying to do.
We know that these are very early-stage folks, so we don’t put too much weight on the business model because we know as soon as the ink is dry or the last click of a document is typed, it is dated. We’re looking for their ability to be thoughtful, to respond to external factors, and to be able to iterate, iterate, iterate, as they’re trying to build their enterprise.
Klein: You’re looking for the talent at least as much as the actual organization. That’s a familiar theme from venture capital. We often hear, “We’re betting on the entrepreneur, not necessarily the initial product or plan.” One other thing I wanted you to comment on is the numbers. My understanding is you are getting 2,000 to 2,500 applications and ultimately selecting about 1% or 2% of these folks for a small class.
Dorsey: Typically, we will get more like 3,000 or so submissions. It is a very large funnel, and the acceptance rate is so low. That is not to say that we could not fund more of these terrific applicants. We certainly could, but there is some titration and calibration you have to do in terms of the amount of funding that we’re able to raise each year. We are not an endowed organization. We’re a nonprofit, so each year we’ve got to go out and raise the money that we then deploy as an intermediary organization.
Also, there’s something to be said about how you manage and engage cohorts of entrepreneurs to ensure that you’re able to support them to the best of your ability. There’s always more that we could do, but it is hard sometimes to think about economies of scale when you’re trying to best support very early-stage innovators.
Klein: How large is the typical cohort?
Dorsey: A typical cohort is from 20 to 30. There is something about the power of walking together with your fellow entrepreneurs. It is a terribly lonely journey to be an entrepreneur. Finding others who understand exactly what you’re going through because they’re going through some of the same experiences, and the ability to share information, to commiserate, to celebrate, to support one another — I literally cannot underscore enough how critical that peer support is.
Klein: You used the pronoun “she” generically, but these are men and women from all over the world. It is a remarkably diverse class of fellows.
Dorsey: That’s exactly right. Echoing Green has now funded about 900 or so social entrepreneurs who are working in about 90 countries around the world. But relative to our colleagues in the space, we probably have the most diverse cohort of social innovators, especially when you look at our portfolio over the last decade. About 75% of our U.S.-based fellows are people of color. About 75% of our folks globally are proximate, so they are truly of and from the communities they serve. And about half are women. We have really worked hard to create an inclusive community, but as always, we have more work to do.
In terms of what the fellowship offers, we value the goods and support and services at about $250,000 in cash and in-kind support over two years. It’s a small amount of angel investment — about $80,000 to $90,000 over the two years. That is not a lot of money, but it is completely unrestricted risk capital for that entrepreneur to deploy as she sees fit, which in the early stages is super important. Then we work really hard to embed them deeply in the Echoing Green network, so fellows can support one another. We also connect them across our broader network of investors, philanthropists, thought leaders, and media partners. We work hard to create this supportive, enabling ecosystem, which at its best and highest use is truly a rising tide that should lift all boats.
Klein: You were an Echoing Green fellow almost 30 years ago, and you’ve gone on to become the president. As you think back, what has changed in the field of social entrepreneurship?
Dorsey: It has been really interesting to have this bird’s-eye view of the evolution and growth of the field. Certainly, there’s what we talked about earlier in terms of the growing number of for-profit or hybrid enterprises, and that the pool of philanthropic capital simply isn’t sufficient enough to drive the kind of change we need to see across society. But I also think it’s a nod to the popularity of social innovation that has penetrated settings like yours — business schools, communities where business leaders are recognizing that an impact approach is vital, recognizing that part of the work of society is to reduce the negative externalities that businesses and other sectors throw off. If you can prevent that from the start and build organizations that think about their social impact, their environmental footprint, as well as their financial outlook, that is a more sustainable approach, for sure.
I would say the democratization of social innovation is also a new trend. The origins of social innovation in many ways happened at places like Wharton — in elite spaces that, in their early years, really engaged a particular type of student or person, a person of privilege who had access to university resources, to capital, to the principles and practices of social innovation. It has become increasingly a clarion call for people who recognize that the solutions, the frameworks, the structures of the 20th century are just not working for enough of us. It has engaged and emboldened a broader set of stakeholders, which I think is terrific. More people from more parts of the world, across generations, across boundaries, have gotten engaged in the work. And I think that’s really exciting to see.
The last thing is that there has been a real professionalization of the field, which you would expect to see where you’ve got not only professionalization but bureaucratization of regulatory structures, talent pipelines, place-based work that’s starting to spring up around creating socially impacted ecosystems. I think these are all interesting trends, and I think they will only continue because the field seems to be exploding, especially in this moment when so many of us realize that so little was working for people around the globe.
Klein: You have been outspoken about racial and gender disparities in funding of social entrepreneurs, not only in the United States but around the world. Can you tell us about the collaboration that was just announced with Goldman Sachs to support Black women social entrepreneurs?
Dorsey: We launched research a number of years ago with the Bridgespan Group, one of the leading nonprofit consulting firms in our sector. We went to our friends at Bridgespan a number of years ago because we had long seen funding disparities of many of our fellows whom we knew to be best-in-class, next-generation talent. The fact that year after year we were seeing upwards of a $20 million funding gap between our Black applicants and white applicants was a glaring signal that inequities were alive and well in our funding landscape.
Bridgespan did a deep dive into our fellow community and were able to report out some staggering findings looking at our Black fellows’ trajectory versus our white fellows’. What they found was that our Black fellows were raising 24% less revenue than their white counterparts. When you looked exclusively at unrestricted net assets, it was 76% less. When the unrestricted net assets were so significantly underfunded for Black entrepreneurs in our network versus the white ones, it was really a proxy for lack of trust in these leaders. When you think about these unrestricted net assets as a pool of money that allows you to dream and grow and strategize, it really did put a finer point on the headwinds that these leaders of color were facing relative to their white counterparts.
There are other organizations that have reported the same disparities; it happens regardless of the size of the organization. It is terribly intersectional, meaning that women of color in particular face even stiffer headwinds. Indigenous and proximate leaders in global settings face these same sorts of headwinds. The question becomes: What do you do about it? One of the responses after this groundbreaking research was this notion of could you partner with capital providers to start to break those structural inequities, to ask partners across sectors to begin to show up as allies in new and meaningful ways? That leads me directly into our new partnership with Goldman Sachs, the One Million Black Women initiative, which we’re thrilled to be a part of.
Goldman Sachs has recognized the real economic, moral, and social tragedy of under-investing in a key stakeholder group in our society. Black women were heralded as heroines of our election cycle of last year, but when you look at many of the disparities confronting African American women like me, the disparities tell a very different tale of being locked out of health care opportunities that literally have life-and-death implications, and lacking access to financial on-ramps that are vital to closing the racial wealth gap that confronts so many African American families.
Goldman Sachs is taking a soup-to-nuts approach about how they partner with various enterprises to start to tackle this very complicated structural issue and unlock the potential of Black women. We’re thrilled to begin this process where we’re going to identify a cohort of African American social innovators in whom we will invest to help them launch and grow their enterprises, knowing that our friends and partners at Goldman Sachs will be walking alongside to help them grow and scale their enterprises. It’s a wonderful way for Goldman to stand as allies in this work but also really engage their talented workforce to support the women entrepreneurs that we’re going to have the honor of working with over the next couple of years.