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Advancing Women Social Entrepreneurs: Strengths and Challenges

August 25, 2016

By Brittany Boettcher - Skoll Foundation

As Skoll Foundation CEO and President Sally Osberg says, “social entrepreneurs are cracking the code of some of the world’s most pressing problems.” The Skoll Awards for Social Entrepreneurship are big bets on social entrepreneurs who are poised to tackle an issue at a systemic level, creating a more sustainable and prosperous world.

At the Skoll Foundation, we’ve been working to cultivate a pipeline of women social entrepreneurs for the Skoll Award. As we celebrate Women’s Equality Day in the U.S. today, I wanted to share some of the efforts we’ve undertaken to advance the gender equity of our portfolio and prospective Awardees.

Research shows us that women leaders are underrepresented in the field of social entrepreneurship, and we know there aren’t enough of them in our portfolio. When we set out to address this imbalance, we started by asking ourselves: Does the problem lie with Skoll’s criteria and selection process, or is there something happening in the social entrepreneurship ecosystem that is preventing us from finding more qualified female leaders? Or is it both?

If there is something holding back female leaders from scaling their social impact organizations, what can be done at a systems level to remove those obstacles?

The purpose of this exploration is not only to serve Skoll’s pipeline development, but also to uncover important trends in scaling social entrepreneurship that can advance the thinking in the social impact space.

As Skoll’s social entrepreneurs have demonstrated through their work, it’s only by first thoroughly understanding the system in which you are working that you can solve the problems within it, so that’s what we’ve set out to do.

Gender equality matters for impact

Diversity for diversity’s sake is important, but that’s not our ultimate goal. In fact, there is an important link between impact and building diverse leadership teams and boards.

In a 2009 McKinsey study of over 800 business leaders, women showed an advantage in responding to global challenges following crises. This is because women tend to practice more democratic and inclusive decision-making approaches, and to inspire others. The Skoll Award seeks to recognize leaders and organizations attacking the world’s most pressing problems, many of which are centered in contexts that are currently in crisis, or have been in crisis until recently.

The idea of men and women in leadership roles should not be presented as oppositional. Instead, we need to recognize that each gender brings unique traits to a leadership position. And in order to cultivate a strong community of social impact leaders, you need to include both styles at the decision-making table.

This point was eloquently addressed by a powerhouse panel of female leaders at the 2016 Skoll World Forum, in the session Leading Through Adversity. Panelists Mary Robinson, Halla Tomasdottir, Alaa Murabit, and Reverend Mpho Tutu discussed the need to embrace feminine leadership traits—practiced by both men and women—and recognize the value they bring to both business and society.

Alaa, founder of The Voice of Libyan Women, challenged the audience to think about leadership as “tough and compassionate” and for society to reframe compassion as a strength rather than simply an emotional state.

This is important food for thought in framing women’s leadership. But we also need to be careful not to reinforce harmful stereotypes that hold women back.

In fact, the data is clear that women entrepreneurs perform better, or at least equally well, as their male counterparts in achieving strong business outcomes. In one report on women entrepreneurs, researchers found that businesses with a woman on the executive team generally report higher returns, and are also more likely to have higher valuations at both first and last funding.

Another survey from the Entrepreneurship Database program at Emory University, of applicants to early-stage social impact accelerator programs, found that organizations with at least one woman on the founding team were more likely to have reported positive revenues in the previous year (58.4 percent versus 48.5 percent of their male-led peer organizations).

Village Capital tracked data from 500 alumni and over 1,000 applicants over five years. At the application stage, female founders outperformed their male counterparts in business and impact metrics by generating at least 20 percent more earned revenue, and they created more jobs through their ventures.

Despite this, many female-led ventures were found to be underfunded. They attracted only 83 percent of the outside equity investment, 84 percent of the philanthropic donations, and 63 percent of the debt financing of their male counterparts.

Testing assumptions about the social impact space

When looking at the corporate sector and women’s advancement into leadership positions, we see troubling and familiar statistics—while men and women start out at nearly equal rates in the workforce, they do not advance at the same rate to top leadership positions.

In 2015, women represented only 17 percent of the C-Suite corporate pipeline across 118 major corporations in the U.S. Data shows that in the non-profit world, the trends are not much better.

A study conducted by the White House Project found that in the non-profit sector women make up about 75 percent of the workforce, but hold only 45 percent of CEO positions. The statistics get worse as organizations get bigger; among those with budgets over $25 million, only a third of CEOs are women. And the study showed that these women CEOs are typically paid less than males in the same positions.

The data points to the conclusion that women are not being funded or advanced along the leadership pipeline at the same rate as their male colleagues, whether in the corporate world, the non-profit sector, or as entrepreneurs.

Reflections from Skoll’s peers

In addition to looking at research on female entrepreneurs, we engaged philanthropists and social impact investors in the conversation to hear their experiences with female entrepreneurs. They reported a difference in the way women pitch their work to investors. When we dug into this, we found insights worthy of further consideration.

Evidence suggests differences between men and women in their inclinations towards imagining future possibilities. In particular, a study conducted by Insead’s executive education program found that women were rated lower by their colleagues for their “ability to recognize new opportunities and trends in the environment and develop new strategic direction for an enterprise.”

It also found that some women feel skeptical toward visionary leadership, and that women tend to ground decisions in data to compensate for the commonly held view that men are more competent leaders. This is of particular interest to us, because when we look for candidates for the Skoll Award, understanding a leader’s pathway to systems change—how they plan to transform the status quo into a new, more just and prosperous system—is paramount.

While the Skoll Award recognizes organizations with strong track records, it is not a lifetime achievement award. It seeks to recognize organizations and their leaders at critical moments on their paths to systems change, and to be catalytic in helping them get to the new desired state.

Another factor that investors brought up is that networks in the social impact space tend to be insular, especially for women. Again, upon further investigation, there is some evidence to support the idea that networking is more helpful for men than women.

A study conducted by the Center for Entrepreneurship and Barclays found that 27 percent of women saw weaknesses in their networks as a career obstacle, whereas only 9 percent of men reported this. Women may be reluctant to network because of a fear that their self-promotion will be perceived negatively. This presents a major barrier to female social entrepreneurs who need to form partnerships in order to scale up their work.

Continuing the conversation

This research and reflection has meaningful implications for how Skoll seeks out and evaluates female social entrepreneurs for the Skoll Award. We are working to better understand the challenges that female social entrepreneurs face in scaling their organizations and to change our own internal practices to reflect this learning.

We see this as the beginning of a conversation with both social investors and social entrepreneurs. There is much more work to be done. Join us in this conversation, recognizing the unique barriers female social entrepreneurs face. Help us find ways to break down the barriers faced by women in this sector, grow female leadership, and advance the impact of female leaders.

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