This Funder Thinks Female Social Entrepreneurs Need Extra Help. Do They?

A few weeks ago, Babson College treated America to some depressing news about the state of women in venture capital. A mere 3 percent of companies receiving venture cash in the last year had female chief executive officers, according to Babson's widely publicized report. And, nearly as disturbing, 85 percent of all venture capital–funded businesses operating in the United States have no women on their executive teams.

The nonprofit sector is another story, of course, with a long history of women founding charitable organizations. In addition, the majority of workers in the nonprofit sector are women, in sharp contrast to sectors like tech and finance.

But what, exactly, is the situation facing women who want to start nonprofits today? Do female social entrepreneurs face special obstacles, like they do in other sectors? Do they need extra support that their male counterparts can do without? 

Before getting to that question, let's look at the news that raised it. Last week, New Profit, the Boston-based venture philanthropy fund, launched an accelerator program to develop the potential of female social entrepreneurs and heighten the impact of the organizations they lead.

Founded in 1998, New Profit invests in nonprofits, usually over some number of years, in order to help them grow faster, increase impact, and create higher returns on investment for funders. It operates very much like a venture capital outfit, but for positive social change.

With financial backing from donor Sarah Peter, New Profit's accelerator program is awarding $50,000 and a year of technical assistance tools, resources, and networking help to a seven-member cohort of "extraordinary female entrepreneurs."

I'll get to their bios in a second, but first back to our question: Do women like these need special help to succeed?

Curiously, the announcement of this initiative by Vanessa Kirsch, the founder of New Profit, provides no rationale for the focus on women other than that the donor "funded this program out of a desire to propel more female social entrepreneurs to scale." But it's important to note that Kirsch was a founder of the Women's Information Network (WIN) 25 years ago, and has a long commitment to supporting women leaders. Sarah Peter also has longstanding, deep involvements in this area. 

Still, I got to wondering if there were studies about the specific obstacles that women founders face, and also what percentage of nonprofits are founded by women. So far, though, I've found very little on this subject. (If you know of any research, send it my way.)

However, there is plenty of data demonstrating that a large majority of CEOs at the biggest nonprofits are men, and there's also a big pay gap between male and female nonprofit executives. According to GuideStar's 2014 Nonprofit Compensation Report:

median compensation for female CEOs lagged behind that of respective male CEOs by up to 23 percent depending on the organization size. It also found that only 17 percent of organizations with budgets larger than $50 million had a female CEO, compared to smaller organizations with less than a million-dollar budget, the majority of which have women CEOs.

Okay, let's linger over that last factoid for a moment, about how most smaller nonprofits are led by women. Since younger nonprofits tend be smaller and are still led by their founders, that fact may suggest that a majority of nonprofits are actually started by women. And if that's true, you might infer that women social entrepreneurs are doing just fine without extra help from funders.

The truly big problem underscored by GuideStar's data is the lack of women leading the biggest nonprofits. In turn, that problem leads us to the wider discussion about why more women aren't making the final climb to top leadership positions—a conversation ramped up in the past few years by Anne-Marie Slaughter's article in the Atlantic, Why Women Still Can't Have It All, and Sheryl Sandberg's book, Lean In

While there's nothing wrong with a special effort to help young female social entrepreneurs just getting started, it seems clear that the real challenge for women nonprofit leaders is not founding an organization. It's staying in the game over the years, as family obligations kick in, to get to the top of a big one. 

I'll be excited when a funder tackles that challenge. 

I promised to tell you who the seven women are that New Profit is backing with this initiative. Here they are, along with what they're doing. An impressive group, for sure:

  • Jessica Sager, Co-Founder and Executive Director, All Our Kin - Stated goal: building high-quality, sustainable family childcare programs.
  • Alexandra Bernadotte, Founder and CEO, Beyond 12 - This organization works to increase the number of traditionally underserved students with college degrees, and to bridge the gap between K-12 schooling and higher education.
  • T. Morgan Dixon and Vanessa Garrison, Co-Founders, GirlTrek - An organizing, self-empowerment, and health-focused entity all in one, GirlTrek convenes African American girls - thousands of them - to walk together.
  • Lisbeth Shepherd, Executive Director, Green City Force - A project of AmeriCorps, Green City Force engages low-income young people in national service through environmental initiatives in New York City.
  • Leila Janah, Founder and CEO, Samasource - Through digital services, training, and professional supports, Samasource works to empower low-income women in the digital economy.
  • Maisha Moses, Executive Director, The Young People's Project - A math literacy development program for students from elementary to high school.