Evolving the Paradigm of Social Change with Markets and Civil Society

September is one of the most inspiring times to be in New York. Despite the end of summer and the slow return to the daily grind of the city that never sleeps, it brings together the largest delegation of world government, nonprofit and business leaders to tackle some of the world's most pressing environmental, social and economic issues. Between UNGA, UN Climate Week and the Clinton Global Initiative (CGI) Annual Meeting convening to solve the toughest global challenges, you could almost say "change is in the air" without sounding too cliché.

Though the theme of change has been constant over the years, who addresses these challenges and how they're addressed is evolving. Starting with governments and then expanding to include corporations as globalization rapidly grew their global footprints and made them accountable for the impact of their operations, the responsibility of tackling social issues and driving change has fallen somewhere in the middle, usually in the form of public-private partnerships. While these partnerships have shown to be more effective than any one sector working independently, the "who" and the "how" of change-making has moved past checkbook philanthropy and funded programming, and into the markets and the hands of the people, evolving our approach to be more bottom-up.

The Rise of Market-Based Solutions

Grounding solutions to environmental and social challenges in the market is nothing new, but this type of self-sustaining model for change was increasingly popular at CGI this year, with more than 20 commitments dedicated to market-based approaches and providing important tools and resources to entrepreneurs to self-start change.

For example, Waka Waka, an impact-driven social venture focused on ending energy poverty, announced it was halfway through its 2011 commitment to reach one million people in developing countries with solar LED lamps using the buy-one-give-one model. In a plenary session focused on cities and innovation, Water.org co-founders Gary White and Matt Damon discussed their organization's WaterCredit, a financially sustainable solution to provide access to safe water for communities by applying microfinance tools to the water, sanitation and hygiene sector.

As Acumen Fund founder and CEO Jacqueline Novogratz pointed out at an event earlier this month with NY+Acumen, financial sustainability is necessary for long-term, sustained social impact. While the rise of market-based solutions may reflect our growing appetite for carving our own paths, it also comes from the necessity to create change models that are self-sustaining and independently functional for greater long-term impact. Novogratz also stressed the importance of understanding markets and communities at which social innovation is targeted, noting that one of the biggest mistakes she has seen in social enterprise models is a lack of understanding of the people who would actually use the product or service. Market-based solutions, aside from being financially sustainable, also often come from the people who know the issues best, often leading to more effective interventions and essentially democratizing change.

The Importance of Civil Society in Driving Change

In addition to evolving financing for change, the responsibility for driving change is becoming increasingly democratized. During his remarks at CGI, President Obama noted that most of the great change throughout history was driven by "ordinary people determined to forge their future." Former president Bill Clinton also stressed the importance of civil society as change-makers both in terms of understanding issues and tackling them. As entrepreneurship becomes increasingly popular, everyday citizens are taking matters into their own hands and identifying and innovating solutions to solve their communities' most pressing challenges. In contrast to the historic responsibility of governments and corporations to address these issues, this shift back to a more grassroots, more entrepreneurial approach has made civil society a key player and source of innovation in driving environmental and social change.

In order for civil society to be an effective force of change, however, people must be empowered with adequate tools and resources to raise their voices and innovate. Peter Diamandis, chairman and founder of X Prize Foundation said in his conversation with Bill Clinton that companies like Google have democratized access to information but that more than information needs to be accessible. The right infrastructure, tools and resources need to be in place to foster change-making within civil society. As President Obama remarked, when rule of law is effective and policies and legal infrastructure empowering citizens are implemented, "ordinary people" put their ideas into action and drive the innovation needed to generate environmental and social change.

As our approach to global challenges becomes democratized and market-based, equipping grassroots social innovators and entrepreneurs with the necessary tools and resources to succeed will be increasingly important. Financially sustainable change models created by the communities who truly understand these challenges are not only critical for lasting, long-term impact, but also to ensuring that solutions effectively reach and impact these communities as well. While the link between business and impact is not new, this surge self-sustaining solutions generating both financial and social value could be the key to tackling these challenges now and in the future.