The President’s Social Enterprise Challenge

“My fellow citizens of the world, ask not what America will do for you, but what, together, we can do for the freedom of man.”

These famous words, were uttered by former President John F Kennedy  in his 1961 inaugural speech which drew attention to the escalating arms race.  News of the President’s Social Enterprise Challenge came appropriately from the John F Kennedy School at Harvard:

It was at Harvard some years earlier, in 1947,  that US Secretary of State,  General George Marshall delivered his famous ‘Marshall Plan’ speech, saying:

Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist. Such assistance, I am convinced, must not be on a piecemeal basis as various crises develop. Any assistance that this Government may render in the future should provide a cure rather than a mere palliative. Any government that is willing to assist in the task of recovery will find full co-operation I am sure, on the part of the United States Government. Any government which maneuvers to block the recovery of other countries cannot expect help from us. Furthermore, governments, political parties, or groups which seek to perpetuate human misery in order to profit therefrom politically or otherwise will encounter the opposition of the United States.”

In 1996, given the opportunity to serve, my now deceased colleague Terry Hallman accepted an invitation to join the steering group of the Committee to Re-elect the President.  His work in connecting families with MIA veterans had drawn the attention of President Clinton. It began with his own father in law, Charles Stoddart, whose C-130AC gunship had been shot down over Laos.

Given no brief for this role, Terry used the time to construct a white paper based on ideas which had begun to develop in his college days, of an alternative to traditional capitalism and business with a primary social purpose.  He warned that a economic system where debt had no finite anchor, would increasingly disenfranchise the poorest to the point that as a threat to their survival,  it would inevitably lead to uprisings.

3 years later, he had the opportunity to deliver proof of concept when the first signs of the global economic crisis were felt in Russia.  Harvard’s Russia Project had failed in its attempts to deploy the ‘Chicago School’ trickle down approach and 20 billion dollars of US aid  simply vanished in Moscow.

From a former weapons research region and nuclear stockpile in Tomsk, a former target for US missiles, he wrote back to Clinton’s office with his research, pointing out that “we have no instruction manual to deal with the collapse of Russia”

He proposed turning development support on its head, to make it local and bottom up, using micro-finance to support those that needed it most, those living in poverty.

By 2003, The Tomsk microfinance bank was self-sustaining and he moved on to Crimea to observe another precarious situation where the Russian Black Sea fleet was based.  The recently repatriated Tatar community were displaced from their former homes and were at risk of being provoke into terrorism.  His research proposed a social enterprise self building initiative which would considerably reduce the cost of rehousing the Tatars.  In his proposal, he wrote:

“!Just as the US now heavily uses smart bombs in warfare, it is becoming increasingly apparent that the equivalent is needed in aid efforts. It is not enough to spend, say, US$ 7 million dollars for five Tomahawk cruise missiles and then spend a fraction of that amount in building a peaceful community which does not merit targeting by missiles. Yet, that is what we have in this case.”

As he’d pitched his ideas on business for social purpose, to his President, so had a man named Oleg Lavrentyev  who’d written to Khruschev in 1950 declaring he could make a “hydrogen bomb”.  It was by strange coincidence, the city of Kharkiv in Ukraine where they’d both worked and the same year, 2011, in which they both died.

Offering assistance to local scientists, he wrote them a proposal with the aim of leveraging funding assistance for transforming the former weapons laboratory to an education centre for fundamental science. It would lead to a production agreement for manufacturing medical isotopes for the US market.  In the proposal he wrote:

“Each core element of the national interest requires strong commitment to scientific research and education. Through scientific discovery, scientists enlist the forces of the natural world to solve many of the uniquely human problems: feeding and providing energy to a growing population, improving human health and security, taking responsibility for protecting the environment and the global ecosystem. Scientific discoveries inspire and enrich any country, teaching about the mysteries of life and the nature of the world. Ukraine’s future demands investment in people, institutions and ideas. Science is an essential part of that investment, an endless and sustainable resource with extraordinary dividends. Science is also an endless resource: in advancing the frontier: knowledge of the physical and living world constantly expands. The unfolding secrets of nature provide new knowledge to address crucial challenges, often in unpredictable ways. Moreover, science fuels technology  the engine of economic growth that creates jobs, builds new industries, and improves the standard of living.”

He learned later that the proposal had been feed into US political channels via a Senator Barack  Obama.

The major thrust of his work, our work, however had been tacking poverty, with the primary focus on Ukraine’s forgotten children in institutions for the disabled, the psycho-neurological internats, as they’re know. It had begun in 2006 with his article ‘Death Camps, For Children’ in which he explored the possibilities for intervention.

The strategy paper. known as a ‘Marshall Plan’ for Ukraine said this:

“This is a long-term permanently sustainable program, the basis for “people-centered” economic development. Core focus is always on people and their needs, with neediest people having first priority – as contrasted with the eternal chase for financial profit and numbers where people, social benefit, and human well-being are often and routinely overlooked or ignored altogether. This is in keeping with the fundamental objectives of Marshall Plan: policy aimed at hunger, poverty, desperation and chaos. This is a bottom-up approach, starting with Ukraine’s poorest and most desperate citizens, rather than a “top-down” approach that might not ever benefit them. They cannot wait, particularly children. Impedance by anyone or any group of people constitutes precisely what the original Marshall Plan was dedicated to opposing. Those who suffer most, and those in greatest need, must be helped first — not secondarily, along the way or by the way.

It also  made a  point about the ongoing war in Iraq:

“It is proposed that the United States of America be actively engaged in supporting this project, financially and any other way possible. Ukraine has clearly demonstrated common will for democracy. Ukraine has also unilaterally taken the first critical step to fulfill this program, thus clearly demonstrating initiative and commitment to participation required in the original Marshall Plan sixty years ago. The US side is presumably attempting to foster democracy in another country, which never expressed much interest and shows little real interest now. That of course is Iraq, where recent estimates indicate a cost of $1.5 billion per week.

That same amount of money, spread over five years instead of one week, would more than cover the investment cost of the initial components of this project, and allow a reserve fund for creating new projects as Ukraine’s intelligentsia invents them in the Center for Social Enterprise. It is proposed that Ukraine and the US provide equal portions of this amount. Ukraine is certainly able to provide that level of funding, given that projects are designed with the same fiscal discipline employed in the traditional business sector. That means they pay for themselves, one way or another.

Project funding should be placed as a social-benefit fund under oversight of an independent board of directors, particularly including representatives from grassroots level Ukraine citizens action groups, networks, and human rights leaders.”

In February 2008, the ‘Marshall Plan’ was followed up by a letter to USAID and the Senate Committee on Foreign Relations. The latter was chaired by Joe Biden and had Barack Obama as a member at that time.

“Thank you for your time and attention to this. I and others will look forward to hearing from you. I hope we continue to realize ever more fully that outside the box and inside the box have only a box in the way. We outside the box know quite a bit of what’s going on, many times in exquisite detail, perhaps in ways that those inside the box can’t quite as easily access if at all. We are grossly underfunded in favor of missiles, bombs, and ordnance, which is about 100% backwards. Now, with even the US Pentagon stating that they’ve learned their lesson in Iraq and realize (so says top US general in Iraq ten days or so ago) that winning hearts and minds is the best option, I and others shall continue to think positive and look for aid budgets and funding spigots to be opened much more for people and NGOs in silos, foxholes and trenches, insisting on better than ordnance, and who understand things and how to fix them. We can do that. We can even do it cost-effectively and with far better efficiency than the ordnance route. Welcome to our brave new world. Except it’s not so new: learn to love and respect each other first, especially the weakest, most defenseless, most voiceless among us, then figure out the rest. There aren’t other more important things to do first. This message has been around for at least two thousand years. How difficult is it for us to understand?”

In November 2008, Presidential Candidate Obama announced plans for a social enterprise agency and social investment fund, as described in the ‘Marshall Plan’ to be “paid for by closing tax loopholes and ending the war in Iraq”.

“The second thing I’ll do is invest in ideas that can help us meet our common challenges, because more often than not the next great social innovation won’t be generated by the government.”

‘With these words, candidate Obama promised to create a Social Entrepreneurship Agency within the Corporation for National and Community Service. He proposed $3.5 billion a year for social investment, paid for by ending the war in Iraq and eliminating corporate tax loopholes.’


In spite of many obstacles, his call  for impact investment in childcare reform , that “every child deserves a loving family” set others in motion.

if I was an American and this was the US President rather than Harvard’s, I guess you know who I’d nominate for the challenge.

One thought on “The President’s Social Enterprise Challenge

  1. General Marshall is one of my heroes. I wrote this blog article last year. . I added a link this article in the comments section so others who read my blog might find yours. Your continued sharing of the ideas of Terry Hallman are admirable.

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