Ashoka is a social impact firm based in Washington D.C. that supports entrepreneurs who have potentially world-changing ideas and a track record for success. In its early years, Ashoka coined the term “social entrepreneur” and it continues to help define the impact landscape today. Rather than focusing on the tools used to make change, such as for-profit or nonprofit business models or social movements, Ashoka challenges its fellows with a more fundamental question: “How can we harness the power of markets to improve peoples’ lives?” Ashoka Fellows create structural solutions to social problems; doing so is extremely challenging and as a result only thirty-three fellows are selected each year.
Stuart Yasgur directs Ashoka’s Social Financial Services group, and shared Ashoka’s theory of change with Yale students during Social Impact Lab. With over $500 million invested to date, Ashoka has propelled considerable change. Ashoka’s theory suggests that remodeling market structures is the key to lasting social change because it will incentivize behaviors that lead to the kinds of sustained outcomes that changemakers seek.
Stuart believes that markets are an important tool that create economic activity and surplus and can also be designed to yield the results that social impact proponents pursue. While controversial, this theory suggests that true change happens not through innovations within current market structures, but rather by innovating on the structure of the market itself.
Stuart uses a sports analogy to convey this idea. “Imagine a soccer field.” Based on current “rules,” the middle of the field will eventually become trampled and the grass will die. The current solution is to ask people to sacrifice the expedient goal for the sake of the grass in the middle by running in circles around the center of the field. But there’s a better solution than creating conflicting incentives. Instead, by moving the two goals to the far side corners of the field the players run along a new strip of land without having to make tradeoffs. If necessary, the goal posts can be moved again. Similarly, the “rules” that define markets incentivize different behaviors, and right now a lot of solutions create a second bottom line that conflicts with the first. “We can do better,” Stuart says. He wants to take advantage of the incentive system that works so well - move the goals themselves - and create one bottom line that serves both needs at the same time without negative externalities.
Ultimately, Ashoka refers to this kind of changemaker as an “economic architect,” because Ashoka Fellows are redesigning markets to align strategic advantage and value creation. So far, they’ve had powerful impacts. Fifty percent of Ashoka Fellows affect national policy within five years of becoming a Fellow, and many have changed the way a portion of the market works in their home countries. If this trend continues, communities around the world may see a new market model that hybridizes the outcomes changemakers seek with market-incentivized behaviors. Rather than needing to be corrected through external pressures, new markets will be designed with a process for change built into them.
Given the growing demand for social issues to be incorporated into global markets, one can expect to see more from Ashoka Fellows in the future. For those looking to track, participate, and even create these innovations themselves, Stuart advises looking towards “major deltas” of change in the way people are living and working together, as these will be key opportunities for structural innovations.
By Kathy Meek, MBA ‘19