Innovator Insights: Cheryl Dorsey, President of Echoing Green

A pioneer in the social entrepreneurship movement, Cheryl Dorsey is the President of Echoing Green, a global organization seeding and unleashing next-generation talent to solve the world’s biggest problems.

Prior to leading this social impact organization, Cheryl was a social entrepreneur herself and received an Echoing Green Fellowship in 1992 to help launch The Family Van, a community-based mobile health unit in Boston. She became the first Echoing Green Fellow to head the social venture fund in 2002.

An accomplished leader and entrepreneur, she has served in two presidential administrations as a White House Fellow and Special Assistant to the U.S. Secretary of Labor (1997–98); Special Assistant to the Director of the Women’s Bureau of the U.S. Labor Department (1998–99); and Vice Chair for the President’s Commission on White House Fellowships (2009-present). Her tenure at Echoing Green and vast experience in the field of entrepreneurship and social impact give her a unique understanding of the impact investing landscape.

II: What does the national impact investing ecosystem look like today?

CD: It’s hard to believe that the term “impact investing” dates back only to 2007. Nonetheless, activity in this space has grown significantly as we see the number of companies, funds and individual efforts created in support of this burgeoning industry increase. One only has to look around at the “boomlet” of associations, conferences, research efforts, advisors, consultants and platforms springing up around the world. It has been exciting to watch major mainstream investors like BlackRock and Bain announce impact investing initiatives last year. Nonetheless, far too many high net worth individuals, institutional investors, financial and wealth advisors and philanthropists remain on the sidelines looking for ways to invest but not making the leap to deploy capital in exciting companies and growing markets.

Echoing Green sees these same challenges, particularly at the early stage, in the work that we do with early-stage social entrepreneurs. Echoing Green, founded in 1987, is a nonprofit focused on unleashing next-generation talent. While for the first twenty years of our existence, our emerging social entrepreneur Fellowship applicants proposed nonprofit business models to address social and environmental challenges, in the past decade, we’ve witnessed a shift towards those proposing for-profit or hybrid business models. In fact, today, nearly half of our Fellowship program applicants are proposing for-profit or hybrid business models to solve social and environmental problems at scale. Of them, the U.S. is their top country of focus — quite simply, we see excitement around impact investing from our applicants.

Last year we surveyed Fellowship applicants and found that there’s a gap between those seeking impact investment and actually receiving it . “Gaps” is the true watchword here. The national impact investing ecosystem is filled with gaps: capital gaps (e.g., lack of funds for early-stage innovations); infrastructure gaps (e.g., regulatory regimes, training institutions, clear standards and measures, etc.); and perception gaps (e.g, investors and entrepreneurs seeing risk profile and investment readiness quite differently). Growth in the ecosystem will be partially dependent upon closing these gaps. (Echoing Green’s report on the “gaps” can be found here).

II: If different from what it looks like today, what does a thriving, healthy impact investing ecosystem look like? What are the necessary ingredients for getting there? In order to nurture emergent ecosystems, what has to happen? What resources must be in place/ Who must be at the table? Conversely, what roadblocks must be removed to create this environment?

CD: One only has to look at what’s happening in the Northwest to get a sense of what a thriving impact investing ecosystem looks like. All the key ingredients are there. There are abundant networks and resources that facilitate learning, knowledge and the creation of invaluable “social” capital; there exists a critical mass of financial advisors, part of the professional class of impact investing and other intermediaries; there are philanthropic investors (community foundations, donor advised funds and private foundations) and individual investors who have capital ready to deploy; there are robust measurement standards which are important to build trust in the system; and, of course, there is deal flow.

In thinking about emergent ecosystems, it is especially important to recall the outsized role that private foundations, who through grants, program-related investments (PRIs), and mission-related investments (MRIs), have historically played in building up the impact investing market to its current size. Mobilizing this group of stakeholders would be vital for any emergent ecosystem as would focusing on reducing barriers to startups and high potential enterprises. While there are many levers that could be pulled to reduce barriers, engaging government is of particular importance because of its ability to impact legal and institutional constraints.

II: What elements of local infrastructure/ecosystem building are mobile? What parts of the work are uniquely place-based (e.g. can only work in New York, DC, Baltimore, or elsewhere) and what can be packed up and used as a template to jumpstart other idling economies?

CD: Building a local ecosystem for impact has to start with a clear, hard look at that area’s own competitive advantage as well as peculiarities/idiosyncrasies. This deep understanding of context is non-negotiable and is completely rooted in place. Much else can be learned and imported from elsewhere (although, of course, tailored for local consumption). Just about three hours south of Baltimore, at University of Virginia’s Miller Center, a really interesting five-year initiative is underway, called the Milstein Symposium: Ideas for a New American Century. The goal of the Commission is to develop and advance innovative, yet actionable, ideas to rebuild the American Dream.

A key focus of the Commission is on generating ideas to improve the entrepreneurial environment and they’ve delineated five: unlocking access to capital to boost community lending; expanding program-related investments to push impact investing into the mainstream; building a regulatory roadmap that aids business owners in navigating regulation; a K-12 entrepreneurship competition that exposes students to entrepreneurial thinking at an early age; and ecosystems-in-a-box that civic leaders can use to take best practices utilized elsewhere and tailor them to best serve their own local economies.

II: How important is recognizing the role of structural inequity in this work? In your role, how do you ensure that social justice, equity, and inclusion remain fundamental elements of social innovation?

CD: Echoing Green is unique relative to other leading social innovation funders in that we have always taken a social justice approach to social innovation. This partly explains why we remain the most diverse and inclusive community of social entrepreneurs but there is always more work for us to do. Just looking at our applicant data from the past five years, for example, leaves little doubt that there are patterns among our pool of applicants, so many of whom are outstanding indigenous leaders of promise, which mirror what is happening in the rest of the world. Structural inequities lead these social entrepreneurs of promise to have differential access to networks and funds among other things. Aggregating and analyzing this data not only allows us to refine our own thinking and work hard to wring unconscious bias out of our own processes but also allows us to engage a broader audience in the conversation around structural inequities.

II: Entrepreneurs often operate wholly in an environment of risk. How do you relate? What have you risked personally, professionally to achieve what you have today? What’s that experience been like for you?

CD: Having grown up in Baltimore, Maryland and then finding my way to Harvard to study medicine was quite a journey for me. It was also quite a journey for my family who were all so proud of me, as the first physician in the family. It was tough to share with my family my decision not to pursue a career in medicine but rather pursue my passion for social change and social justice. It was a risk, emotionally and financially and career-wise, but one that I’ve never regretted. I learned so many valuable lessons through that process including a better understanding of just how individual each of our risk tolerance levels are as well as the power of passion to fuel and sustain you over the long haul.

II: What’s your North Star (or guiding vision)?

CD: Margaret Mead once said: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.” I believe this to be true. I also believe that talent is equally distributed in this society, but opportunity is not. At the intersection of these two ideas is the work of Echoing Green. I am guided by a sense of urgency to help build opportunity on-ramps for next generation leadership who speak truth to power and see value where others see only challenges.