The Fourth Sector
THE FOURTH SECTOR–A SORT OF UPDATED SOCIAL ENTERPRISE MODEL. IF YOU ARE ARE PLANNING A GOAL STATEMENT THAT INCLUDES A ‘FOR BENEFIT (VS. FOR PROFIT) MODEL, BELOW COULD BE HELPFUL STARTING PLACE IN RESEARCH TO MAKE YOU SOUND SERIOUS. JUST GOOGLE SOME OF THE KEY PROPER NOUNS, AND YOU WILL BE EN ROUTE TO A GREAT 2-HOUR JOURNEY IN SELF EDUCATION.
TO WIT
PS, AMAZINGLY NOT IN WIKIPEDIA, SOMEONE W. MORE TECH SAVVY THAN ME, PLEASE START A STUB.
WILLIAM SHUTKIN
The new, evolved capitalism
In the past several years, the line between for-profit business and nonprofit mission has started to erode. A new breed of social entrepreneurs has challenged traditional philanthropy and what they perceive as its limitations in effecting large-scale reforms. On one side, foundations such as Google and Omidyar, as well as nonprofits like the New Hampshire Community Loan Fund, have begun to invest in for-profit businesses with a strong social mission — software companies providing basic services to the poor, for example, or businesses that preserve good-paying jobs in struggling rural areas.
Meanwhile, private, money-making enterprises are incorporating social and environmental concerns directly into their business models. Honda and
These social enterprises are transcending the boundaries separating government, business, and nonprofits and forging a new meta-sector, what some are calling the “fourth sector.” In the process, they are beginning to refashion American capitalism, long the nemesis of many reformers, into a, if not the, principal agent of social change.
Like carbon offsets, American philanthropy can be understood as an interim step in a larger process of transformation. Just as the solution to global warming ultimately requires each of us to dramatically reduce our carbon emissions ourselves rather than paying others to do it for us, we’ve come to understand that lasting, penetrating social change demands that our economic system, and the firms operating within it, integrate social needs directly into their business models instead of relying on charitable interventions after the fact.
In the fusion of commerce and the common good we are witnessing the birth of a new species of capitalism. For-benefit is starting to compete with for-profit as the dominant MO of a growing corps of capitalists not content with simply reaping financial rewards.
But we are also witnessing something else, something equally profound. The emergence of fourth-sector firms demonstrates what is perhaps capitalism’s greatest asset — its essential dynamism and capacity to change, to renew itself over time, however incrementally or begrudgingly, in response to new social conditions and markets.William Shutkin is a former foundation CEO and a trustee of Echoing Green, a funder of social entrepreneurs. 
