Social Business presentation in PPT
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Transcript Social Business presentation in PPT
Social Business
And NGO Sustainability
ACGC Lunch and Learn
October 2013
Roland Vanderburg
Mutual Introductions
Name
Organization
Any
involvement with business
ownership and management
My background:
-involved in NGO development work for more than 25 years
-12 years of living and working in Latin America
-International Program Director with CAUSE Canada for 8 years
-economics degree from the University of Calgary
-Master’s Degree in development studies and microfinance from Eastern
University in Pennsylvania
-more than four years in Nicaragua with microfinance giant Opportunity
International
-involved in social business and microfinance with Momentum
-taught several classes at Ambrose University related to community
development, management and microfinance
Current Challenges for NGO
Sustainability
What are they in your experience?
Current Challenges for NGO Sustainability
New
technical donor structures, policies
New
philosophy of development among funders
(investment versus charity)
For-profit
approach often preferred (trickle down)
Changing
conditions on the field –higher rates of growth,
greater inequality, beneficiary transition from charity to
investment
Donor
Less
fatigue; donor awareness
commitment from donors (i.e. among young people)
Defining Social Business
What does this mean to you?
Defining Social Business
Type I: Mission driven (like NGO) with cost
recovery pricing for goods, services
-non-loss, non-dividend
-mission oriented activity
-long term ongoing sustainability
Environmentally friendly; promotes justice
May accept donations, investments, loans
Contrast with broader social enterprise
definition
Defining Social Business
Type II:
For-profit business owned by
marginalized entrepreneurs
Examples of Social Businesses
In Alberta
Thrift
stores (many examples)
Catering (EthniCity Catering, CCN)
Translation services (CIWA)
Day homes (Sonshine Centre)
Consulting services
Classes (Green Calgary)
Ten Thousand Villages
Examples of Social Businesses
Internationally
Microfinance (loans, savings, insurance, transfers)
Teaching, schools, colleges, institutes, curriculum
Retreat centre, guest house
Tree nursery
Roto-tiller rental
Mushroom production
High yield chickens
Consulting
Health clinics
Solar energy provider
Social Business
Benefits and Costs
What
are some social business
benefits?
What
are some social business
costs and risks?
Social Business
Benefits and Costs
Benefits:
Sustainability of programming with minimal donor/funder
dependency
Respects human dignity; asset based; local ownership
Furthers development goals and mission; based on local felt needs
Costs:
Need for supreme flexibility and market sensitivity
Need for investment capital, business expertise
Risks of financial losses due to internal or external factors
Social Business Pricing Strategies
Sliding scales – clients pay according to ability to pay
Cross-subsidization – clients who are more able help subsidize less able
clients
Lending: pay later; pay when able to pay; pay forward
Insurance plans – everyone pays premium, membership –service when
needed
Paid for: service costs are paid by third party; donor, government
Cost recovery pricing – no profit margin; all surplus reinvested, market
wages, minimize costs (while maintaining mission focus)
Combined pricing: clients pay for one service while receiving additional
services without explicit pricing ie integral microfinance
Very small, regular payments (daily or weekly) according to payment
capacity
Periodic payments based on household cash flow (payment capacity)
Joint buying and selling (cooperatives); and many more…
Preconditions for Success
Open
to Business Approach –mindset, paradigm
(not anti-business)
Understand market, marketing (PPPD),
effective demand
Marketable goods, services
Management capacity –including finance
Steps to launching a Social Business
Define the mission -purpose; beneficiaries
Define ownership
Design and refine products, services
Do the marketing plan (define clients, PPPD)
Prepare a business plan (versus proposal)
Define measurement of success (impact indicators,
sustainability)
Raise capital –donations, investments
Hire appropriate staff (HR policy), training
Implement a promotions plan, production
Social Business Management
Quality
control – including customer service
Internal
controls – including cash management
Monthly
reporting (financial and impact)
Staff
training (technical, administrative, customer
service, financial)
Operational
Incentive
planning (SMART and SWOT)
based compensation
Next Steps:
Exploration
and/or expansion of social
business activities
In
Canada or overseas
Consult
in writing with CRA
Develop
concept plan
Develop
business plan
Access
Build
investment funding
capacity for implementation
Available Support:
No
cost, one page program assessment of
organizational potential for social business
development (initiation and/or expansion)
Organizational
assessment for social
business readiness
Business
Plan development
Management
Evaluation
activities
support
and monitoring of social business
Discussion
Comments;
share experiences
Questions
Concerns
Issues;
share goals
Feedback and Evaluation
Appendices:
CRA Guidelines
http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-019-eng.html
“What is a Related Business?”
“Examples of fees earned in the context of charitable programs include rent in
low-income housing programs, university tuition fees, and museum admission.
Other examples of fully acceptable charitable programs are identified in
Registered Charities: Community Economic Development Programs. They include
micro-enterprise programs, "training businesses" (which provide on-the-job
training in vocational and life skills), and "social businesses" (which address the
needs of people with disabilities).”
Appendices:
Support Organizations and Resources
TRICO Charitable Foundation
Building Social Business, Muhammad Yunus, PublicAffairs,
New York, 2010
www.grameencreativelab.com
www.svx.ca (Social Venture Exchange, Ontario)
–impact investing
My Contact Information:
Roland
Vanderburg
Email: [email protected]
Telephone: 403-264-8410
Location: Lakeview, Calgary