Unfortunately, these caring social good leaders don’t have the skill to market their organization as well as today’s hot charity — like Charity: Water, or can balance their books like Deloitte & Touche. Just because you are good at empowering hurting people doesn’t mean you have a Harvard MBA in successfully making money. Selling a cell phone to the masses is different than convincing a jaded American public to donate $20 per month to a social good cause.

Running a nonprofit is incredibly challenging and complex. In fact, I’d wager that running a nonprofit is more complicated than running a comparable size for-profit business, as the Bridgespan Group argues in Stanford Social Innovation Review,

When a for-profit business finds a way to create value for a customer, it has generally found its source of revenue; the customer pays for the value. With rare exceptions, that is not true in the nonprofit sector. When a nonprofit finds a way to create value for a beneficiary (for example, integrating a prisoner back into society or saving an endangered species), it has not identified its economic engine. That is a separate step.

Nonprofits aren’t quite as good at identifying their “economic engine” as they are creating social services and programs. But how could they be? We ask a lot of our nonprofits. With generally fewer resources, less (nonexistent?) professional development and abysmal infrastructure compared to their for-profit counterparts, nonprofits are expected to help solve or at least mitigate intractable social problems while simultaneously being better, more efficient businesses.

It’s a lot to ask of a terribly under-resourced sector and we certainly haven’t done nearly enough to help.

On the other hand, if you were to take a snapshot of Baltimore’s emerging creative and entrepreneurial community, you might conclude that the city’s black population was largely nonexistent. Some might argue this is because there aren’t many minority entrepreneurs or creatives in the city. Others would balk at this and suggest that the current ecosystem unwittingly overlooks minority creatives and entrepreneurs.

Pick your poison. I lean toward the latter but am sensitive to the former’s perspective. Wherever you land on this topic, however, we can probably all agree that enough is not done in Baltimore to recruit, encourage and cultivate minority entrepreneurs and minority-owned enterprises (including women, lest we forget).

Which is why the stalled redevelopment of the Jonestown Entrepreneurial Center is disappointing, particularly given the entrepreneurial renaissance underway in the city. The center was to be a 10,000 square foot incubator focused on minority-owned business enterprises and completed three years ago. It never was and the innovation community evolves and grows without it. The center would have been even larger than the privately funded Betamore innovation campus.

While the innovation ecosystem evolves and grows to fill numerous voids, there is one significant void that needs to be filled: genuinely connecting the city’s majority population to all of the exciting technological and entrepreneurial activities happening.

Whiting-Turner Contracting Co. CEO Willard Hackerman has even offered to partially cover the cost of the development project if public funds are used toward a $300 million convention center expansion. The state has already approved $2.5 million in design money for this expansion. But while groups like the Greater Baltimore Committee push for $300 million in public funds for the convention center, students, parents and education advocates are left with a bottle tax that might allow the city to leverage $155 for school repairs. Emphasis on might. And gambling.

Aside from the fact that there is little economic justification for city’s to continue relying on big projects like convention centers, stadiums and malls to spur development, the city has far greater needs for its public funds. Like renovating schools. After all, public education is a significant economic development issue, something that seems to elude proponents for an expanded convention center, new arena and another downtown hotel.

The current arena needs to be replaced, but as Hugh Bethell, a parent of city public school children wrote in an op-ed to the Baltimore Business Journal, the Mayor’s plan to draw in 10,000 new families doesn’t stand a chance without strong public schools. It’s an observation that continues to be lost on too many business leaders.

CivicLab is a fascinating and compelling concept, but it doesn’t get mentioned in Field’s article–likely because it lacks a commercial component. But Field does profile Chicago-based Panzanzee, described by its founder as “part incubator, part accelerator, part co-working space,” and focused on providing a one-stop shop for fledgling social enterprises. Panzanzee plans on locating into a 15,000 square-foot space and will take between a 5 percent and 10 percent equity stake in the companies it works with. Panzanzee is currently incubating Ignite Progress, a startup that provides test prep and college readiness services to underprivileged kids.

Philadelphia, where many people believe will one day rival San Francisco as a center for social entrepreneurship, is home to GoodCompany Group, a nonprofit that nurtures socially responsible for-profit enterprises. Unlike Panzanzee, GoodCompany does not take an equity stake from the companies it nurtures. Garrett Melby, co-founder and CEO of GoodCompany Group, describes his group simply as a service organization that’s trying to accelerate the outcomes for social entrepreneurs.

Not only is Baltimore well-positioned to become a leader in educational technology, I believe it is poised to become a city rivaling San Francisco, Chicago, Philadelphia, and Durham as a hub for social enterprise. Maryland is one of just a few states that recognizes benefit corporations and benefit LLCs, and Baltimore is a social services city home to numerous nonprofits, nearly 150,000 people below the poverty line and a plethora of seemingly intractable social problems.

Several Baltimore-based early-stage companies, such as GiveCorps, Common Curriculum and Curiosityville meet the criteria for social purpose business, and there are emerging entrepreneurs coming out of programs like Social Innovation Lab. There are also many individuals working without much guidance, mentorship or seed capital: I’ve recently met an ambitious, entrepreneurial college student developing a promising new product that fulfills an overlooked social need.

Baltimore’s innovation community is certainly growing and its entrepreneurial ecosystem is evolving. Hopefully, there is space and place for these social entrepreneurs. Perhaps their needs can be met by all of the dynamic activity underway in Baltimore’s evolving entrepreneurial ecosystem–but perhaps not.

After all, the motives, necessary guidance and intended outcomes are slightly different for social entrepreneurs: matching mission to market and purpose to profits are great ideals and catchphrases, but is difficult to achieve.

The failure of funders to provide [risk capital] is one of the reasons why innovation has not had a larger impact on the field.

- Karina Mangu-Ward, Director of Activating Innovation at EmcArts.

I always enjoy Nell Edgington’s social innovation interviews, but her recent interview with Mangu-Ward struck a cord and is particularly informative and enlightening to me.

I quite like Mangu-Ward’s insights on “innovation,”

[W]e’re primarily concerned with organizational innovation, which EmcArts has defined as instances of organizational change that: 1) result from a shift in underlying assumptions, 2) are discontinuous from previous practices, and 3) provide new pathways to creating public value…

As a recovering nonprofiteer, I find that nonprofit organizations are unnecessarily criticized for not being “innovative” enough–both by outsiders of the sector and nonprofit workers themselves. It’s rather difficult to innovate when risk and innovation go unfunded, which is what occurs in the nonprofit sector. As Mangu-Ward notes,

[S]eed money helps managers resist the pressure to monetize or fossilize new programs too soon, giving them the breathing space for innovations to grow and embrace a culture of adaptive capacity.

One of the roadblocks to significant nonprofit-led social innovation in Baltimore City is the nature and structure of local philanthropic funding. I’m careful not to paint with too broad a brush, but many funders act as “philanthropic buyers” (which, I should add, is a critically important function). Read Sean Stannard-Stockton’s excellent post on the difference between a builder (someone who donates money to build an organization) and a buyer (someone who donates money so an organization can provide services to the nonprofit’s beneficiaries). Buying is not synonymous to building.

Baltimore’s nonprofit sector could benefit from more diverse funding options–in fact, perhaps we need to move away from the term funding and inch closer to investment. Unfortunately, Baltimore lacks a Roberts Enterprise Development Fund, Venture Philanthropy Partners or Social Venture Partners affiliate organization.

Still, ask yourself: What would happen if local funders capitalized a fund focused on innovation, risk and organizational development (beyond capacity-building)?

But after reading and listening to what Obama had to say about the matter, I immediately concluded the same as Mother Jones reporter/blogger Adam Serwer,

As Rick Klein reports, the president “stressed that this is a personal position, and that he still supports the concept of states deciding the issue on their own.” In other words, while the president “personally” supports marriage equality, he also supports the right of states to prohibit same-sex marriage–as 38 states currently do. That doesn’t look much like strong leadership on the matter of marriage equality to me–but I’ll take it.

The president had to say something about marriage equality–everyone in his administration seemed to already be doing so. And I’m not sure the president had anything to lose by (tepidly) endorsing same-sex marriage: 65 percent of Democrats and 57 percent of independents support same-sex marriage, compared to only 20 percent of Republicans. Endorsing marriage equality it not only the right thing to do, but it’s also a savvy political gamble.

Unless, of course, you think Obama will lose the black vote to Mitt Romney over his support of same-sex marriage.

One noteworthy pattern was that some majority black counties which had strongly backed President Obama in 2008 just as strongly supported the proposed amendment on Tuesday.

For example, Hertford County, with a 60 percent black population, voted for Obama with 70 percent in 2008 and on Tuesday 70 percent of its voters backed the constitutional amendment defining marriage.

I’m not sure what I’m meant to glean from this: that supporters of Barack Obama also support suppressing gay people? Despite dangling this nugget in front of readers, there is no further exploration of black aversion to same-sex marriage in the reportage. It’s fascinating to me how the media has covered this subcategory of the larger same-sex marriage debate, focusing explicitly on race, rather than the complicated intersection of race and religiosity which I’ve written about before.

As uncritical as the media is about race and racism, the media is even less critical about the role and influence of religion–for better or for worse–in our society. The data overwhelmingly indicates that religion has a significant influence on how citizens view same-sex marriage–and yet there is very little reference to this by the media. This is all very interesting, though not at all surprising, and only mildly disappointing.

North Carolina reminds us that there is a lot of work needed to be done to achieve marriage equality. While we should expect some leadership from President Obama on the issue of marriage equality, we’re probably not going to get it, because it’s still too divisive. According to the most recent Gallop polling, 50 percent of Americans think marriages between same-sex couples should be recognized by the law as valid, while another 48 percent think they should not be recognized as legal. North Carolina is among 30 states that have state constitutional provisions limiting marriage to between one man and one woman, and there are 38 states prohibiting same-sex marriage.

North Carolina (and, to a lesser extent, Colorado) reminds us that we’re still a country sharply divided on same-sex marriage and marriage equality.

Insofar as hedge fund managers are just running a scam where one class of rich people rips off another class of rich people, I’m not sure there’s anything systematically problematic about this. But a large share of the money invested in hedge funds seems to come from foundation endowments and pension funds. That in turn makes me wonder to what extent some of the dysfunctional aspects of the financial system can be traced back to dysfunctional governance of those institutions.

I’m not going to quibble with Yglesias’s assertion that the “dysfunctional governance” of foundation endowments and pension funds has some relationship to the nefarious aspects of our financial economy–in fact, the new Kauffman report urges investment committees to conduct greater due diligence of their venture capital investments–but perhaps “news” that private equity, hedge funds and venture capital firms perform no better than any other actively managed stock funds will encourage foundations to reallocate their wealth to impact investing. The Cordes Foundation, for example, has shifted two-fifths of its endowment into impact investments after its initial twenty percent investment outperformed everything else in its portfolio.

The key is for foundations (and wealthy philanthropists) to see impact investing as a choice between or complement to private equity, venture capital and other investments made in the interest of managing wealth and endowment perpetuity, not as a flat out replacement to traditional grantmaking.

To that point, here is an excellent presentation on impact investing by Fran Seegull, Managing Director of Investments at ImpactAssets:

The major point of contention is whether or not social services organizations have the power or desire to impede social innovation. Lester contends that while a self-interested “social services industrial complex” exists, it’s less powerful than Stid claims. I agree, which is why Robert Egger’s work advancing CForward and the recent merger between the National Council of Nonprofits and the Center for Lobbying in the Public Interest has been so fascinating. After all, social nonprofits scrape together government funding year after year and social services organizations certainly aren’t willful deterrents of social innovation. If government were to stop funding ineffective social services program, would the money be reinvested into innovative, high-performing ones? And how would those programs be identified?

But where Lester really hits the nail on the head is his observation that too many in the social innovation community have ignored the need for innovation and advocacy. Lester’s perspective echoes that of Living Cities CEO Ben Hecht who favors mainstreaming social innovation through the public sector. Lester writes,

Simply put: if you want to see more good ideas taken to scale, then you need government funding, and for that you need to fund solid policy analysis and advocacy. This is a role that foundations and/or wealthy high-tech philanthropists need to fill.

Unfortunately, for the most part, they have not. Both seem uninterested — foundations because they have traditionally shied away from it, and high tech philanthropists probably because they made their money in the private sector and seem allergic to government.

For the sake of our children’s future, this needs to change. Foundations and philanthropists need to step forward and fund not just innovation, but advocacy too. Only then will our best ideas be taken to scale.

As management consultant and impact investor Thien Nguyen-Trung argues, the role of social innovators is to “introduce a disruptive, innovative way of achieving social impact in the most sustainable way possible.” Social innovators should view themselves as entrepreneurs looking for a successful exit–and government as the buyer or “impact offtaker” that can take their innovation to scale, and have permanent, lasting impact.

If truly motivated to achieve impact and scale, funders of social innovation must overcome their aversion to government and support innovation advocacy, because even the largest, most efficient social enterprise is unequipped to achieve significant scale. Social innovators, foundations and philanthropists need to help government change the way it does business.

As my friend and fellow writer Michael Corbin brilliantly points out, America’s prison system is an abject failure unencumbered by cost-benefit analysis. We allocate billions of tax payers dollars annually to support an incarceration epidemic that resembles a revolving door where more than four in ten offenders nationwide return to state prison within three years of their release. We can no longer afford our prison culture nor should we want to with that sort of anemic return on investment.

While government is busy experimenting with innovative financing vehicles like social impact bonds (more commonly referred to as “pay-for-success” bonds here in the States) to back improved “offender reentry” outcomes, forward-thinking organizations like Safe and Sound Campaign have already figured out a way to reduce prison spending and increase outcomes.

If this innovation proves successful, hopefully it will quickly displace the old (failed) way that government has funded and operated public safety and corrections.