09/18/2011 08:15 pm ET | Updated Nov 18, 2011

The Social Entrepreneur's Handbook

Once a year, I teach a course at the University of California Blum Center for Developing Economies, but all year long I am on the lookout for good books to assign my students. I just finished a winner.

The Social Entrepreneur's Handbook is by Rupert Scofield, the president of FINCA. For those not in the know, FINCA is a global microfinance nonprofit reaching 800,000 clients in 21 countries.

Rupert and I will be hanging out together at next month's Opportunity Collaboration. I plan to ask him a million questions about his book, which he calls "a survival guide for anyone who joins the ranks of a modern nonprofit." It is chock full of provocative, insightful, pragmatic comments.

He, for example, candidly warns: "The chief disadvantage of the [social] entrepreneurial path is the high probability of failure. The failure rate for purely commercial start-ups is more than 90 percent. To my knowledge, no one tracks the failure rate for philanthropic start-ups, but considering you have even less ability to control your income than in a commercial venture, it must be so high only a fool or a visionary would try to beat the odds."

Or advises, "The ideal board member, like the perfect donor, is a selfless creature who has only the best interests of the organization at heart. Good luck... Instead, look for people who have one or more of the qualities you seek in the ideal board member, and live with their shortcomings."

And sagely notes, "While every high performer is brilliant, the converse is not true. Some very intelligent people prove to be a total waste of your organization's time and money. How can you spot them? One 'false positive' is their academic degree."

And after noting "the odds of finding the perfect, defect-free employee is close to zero," counsels, "The best safeguard against fraud in an organization is not... the systems... but rather the culture you create. If you succeed in making your employees feel proud of the organization and the mission they work for, they will protect it..."

"People are more important than structure. If your organization is filled with hardworking, creative, innovative people, it will succeed no matter what boxes you put people in. People who lose sleep over which box they are in, or who are obsessed with what authority they have to make decisions, are usually the ones who can't make decisions..."

Read Rupert's book for the same reason Pablo Picasso once said of his art, "When I paint I feel like all the artists of the past are behind me."

Read Rupert's book to embrace his in-your-face definition for our neighbors who are held down by poverty: "a group of people who are getting a raw deal."

Read Rupert's book to finish off the pernicious myth that nonprofit social enterprises are run by addle-headed leaders without high performance standards.