IREX Social Enterprise Orientation Training

Gbanga, Liberia Kim Alter

Virtue Ventures LLC

1

What is social enterprise? 2

Hybrid Spectrum Both Values Social Value Economic Value Traditional Nonprofit Nonprofit with income activities Social Enterprise Socially Responsible Business Corporate Social Responsi bility (CSR) Traditional Corporation    Mission Motive Stakeholder Accountability Income invested in programs or overhead Profit-Making Motive  Shareholder Accountability  Profits redistributed to shareholders  Adapted from Lee Davis and Nicole Etchart.

3

Definition

“ A social enterprise is any business venture created to

address a social problem

and generate

social value

while

earning income through commercial activities

.

” In short…. “ solving a social problem with

business tools and practices.”

4

What do we mean by social problems

Example: Millennium Development Goals

1. Eradicate extreme poverty and hunger 2. Achieve universal primary education 3. Promote gender equity and empower women 4. Reduce child mortality 5. Improve maternal health 6. Combat HIV/AIDS, malaria and other diseases 7. Ensure environmental sustainability 8. Develop a global partnership for development 5

Social Enterprise Characteristics

Enterprise Approach

entrepreneurship : the enterprise is the change vehicle and uses market principles and

Social Aims:

has explicit social objectives

Value creation:

solve social problems while earning revenue through commercial means, generating “blended” social and economic value.

Agnostic about legal form:

environment Non-profit, for-profit, cooperative, hybrid, etc., depending on legal

S drives E:

social value before financial value

Social enterprise is driven by a social problem… in other words,

the business opportunity lies in the social problem.

7

Opportunities in Social Problems

Problems

Poverty Non-potable water and sanitation facilities Rapid population growth Ecologically damaging inefficient technologies

Sustainable Dev. Steps

Generation of employment and livelihood opportunities Community participation in search of solutions Subsidized pricing for poor

Opportunities for SE

Creation of micro-business services; micro-credit; community based enterprises Creation of safe drinking water and sanitation enterprises Empower women; and promote family planning, maternal and child health; Increase the share of renewable energy Promote green technologies Creation of education and health social enterprises; sale of contraceptives Creation of renewable energy/green technology products

Social Problem IS the Biz Opportunity

Social Problem

1. Food insecurity 2. Deforestation 3. unemployment 4. Illiteracy 5. Limited access to health services 6. Barriers to employment 7. Lost of livelihoods due to poor vision

Social Enterprise

1. Bakery 2. Ecotourism 3. Credit & training 4. Publisher/education 5. Discount pharmacy 6.

Café, janitorial, thrift, landscape, etc.

7. Reading glasses

Video Examples of Social Enterprise Martin Burt Vision Spring Greyston Bakery 10

Myth Busting: Social Enterprise Realities 11

Motivations for starting an SE 30 20 10 0 70 60 50 40 66 52 51 39 34 23

SE Impact on Organization Improved leadership Attract donors Attract & retain staff Increased performance Self-sufficiency Entrepreneurial Culture 0% 10% 20% 30% 40% 50% 60% 70% Source: Powering Social Change: Lessons for Community Wealth Generation for Nonprofit Sustainability, Community Wealth Ventures, 2003

Mission Alignment 5% 3% 3% of SE don’t relate to mission 11% 78% 78% of SE relate directly to mission Source: Powering Social Change: Lessons for Community Wealth Generation for Nonprofit Sustainability, Community Wealth Ventures, 2003

Profitability Profitable, 24% Don't know, 5% Unprofitable , 75% Foster, William and Jeffery Bradach, “Should Nonprofits Seek Profits,” Harvard Business Review, February, 2005

The 1 st Point Social Enterprise is

not

a “quick fix” for financial ills, Running a social enterprise is not easier than running a CSO/NGO however… SE offers nonprofits many benefits including financial ones

The 2 nd Point Be clear about what you want to achieve with a social enterprise Purpose Objectives

The 3 rd Point The greater the integration the easier the execution and the greater the chance success.

The 4 th Point Social Enterprise can be a vehicle to do more social good and create more impact It is an ORGANIZATIONAL STRENGTHENING TOOL

The 5 th Point Do what you know and leverage what you have to start your enterprise

The 6 th Point Number ONE factor for success is the DESIRE to do a social enterprise Business approach fits with organizational culture