So what is one?
Well, according to a bit of a guru in this space, MJ Kaplan (and who I looked for guidance when developing up a Social Enterprise fund), it’s three things according to an article in Flint and Steel 2014:
- Intent. Social enterprises exist to address social and/ or environmental problems
- Business Models. These ventures employ business models, skills and tools to develop products and services that are traded in the market place
- Profits. Ownership is structured to assure that profits are reinvested to advance the core social / environmental mission and grow the enterprise sustainably.
Now, I have been thinking about this stuff for a couple of years now, but was still somewhat dumbstruck a few months ago when, while making a serious amount of scones I realised that indeed, I was the Chair of a $30k per annum social enterprise. I was trying to convince someone to take over my role (mission accomplished) and as part of selling the role I realised that our school PTA actually ticks all the boxes here.
- Intent. We exist to form a village to help raise our kids, and to provide extra cash on top of government funds.
- Business Models. We implement business models by marketing and merchandising uniforms, supplying school lunches, and entertainment opportunities for the school community.
- Profits. All our profits go back to the school to provide items not provided by existing government funding.
Wow. So suddenly I was not just a bored housewife: rather I am part of a growing and rather fab social movement.
There are a whole bunch of organisations which, on the face of it, tick those boxes but may not self identify as social enterprises.
- Early child education centres exist to ensure that every pre-schooler has a good start in life and earn funding from trading (government contracts and parental fees).
- Many sports clubs actually make more money from trading over the bar than they do from subs.I guess that the intent is to form communities.
- Churches can trade eternal salvation for a tithe, with the intent of community building and charitable purpose of religion.Others, such as the Seventh Day Adventists have a specific trading arm through Sanitarium, drive profits through a rather large $200m business.
- Private schools trade education for parental fees, with the charitable purpose of education and I guess, community building.
- Maori charities drive profits back into their beneficiaries.Ngai Tahu is of course the stand out here.
- Private Hospitals, such as St Georges, run as incorporated societies, and drive income via trading, government contracts.St George’s objectives (from their website) state: To apply any profits accruing from the activities or work of the Society to the furtherance of its charitable objectives, especially the altruistic nursing of the sick or for such other purposes which accord with its charitable objectives
- Gaming trusts.Tricky this one.I postulated that perhaps gaming trusts could be considered as social enterprises, since around 40% of their income (after payouts, before costs) goes to Not for Profit.Whether the social cost is worth the economic benefit is a discussion for another day.
We are going to see a lot this week about the new and emerging social enterprises. And yes, we are seeing more here particularly around “for purpose” businesses as people re-evaluate business orthodoxy around trickle down. However, in the hype let’s remember that it’s not new. Kilmarnock, which you will hear a lot about at the conference, is 60 years old.
I also think that more effort needs to go into measuring the impact of the various organisations. Many social enterprises have quite a bit of hype, but often propose some sorts of simplistic solutions to complicated social issues. And perhaps that’s a gap that could do with some support: working with those enterprises and independent researchers to ensure that strong auditable metrics are a key part of the social enterprise proposition – making sure they hype and the good that we think we are doing matches the reality of the issues that are being solved.
We don’t have to be one of the cool kids to be a participant at the Social Enterprise table. I guess it’s incumbent on all of us, both those in the tent and those who don’t know where the camp ground is, to include, and not go down the usual track of putting language and process around some concepts that in actual fact are fairly old.
Love to talk with you if you think this is at all interesting. Check out my website www.delfi.co.nz.