Where are we at with Social Enterprise?
I may have a bit of bias when I say this, but Social Enterprises seem to be the next big thing. Organisations like Toms and Eat my Lunch are in the press every other day, the Social Enterprise World Forum gets bigger and better year on year, and even Hugh Jackman has joined the fray. But what are Social Enterprises, anyway? How do they work? Are they under-rated or over-rated? A fad or here to stay? I’m just as curious as you are, so let’s find out together.
Just what is a SE, anyway?
The first step to knowing if something is good or not is knowing what that something is. So lets take a look.
The Social Enterprise Alliance defines their namesake as any “Organization that address a basic unmet need or solves a social problem through a market-driven approach.” Seems simple enough, right? mmmm… not quite. By this definition, Ben & Jerry’s could be considered a Social Enterprise — and while I love their ice cream, and they have an awesome social mission to boot, I think we need to keep looking.
Wikipedia states “A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being — this may include maximizing social impact alongside profits for external shareholders.” Seems a bit better, but my High School teacher Dr. Sheppard always told me not to trust wikipedia, so let’s find one more.
The definition of Social Enterprise that I’ve found to be most thorough is that shared by Akina — a New Zealand foundation dedicated to growing Social Enterprise in the country. They say this: “Social enterprises are purpose-driven organisations that trade to deliver social and environmental impact. With social enterprise, it is less about the “who” and more about the “what”. A wide range of organisations can and do deliver social enterprise.” But my favourite part was this diagram:
It sums up what no other definition has encompassed: The variety of Social Enterprise, and how it fits in to the ‘real world’. Through jut seven circles, you know the scope of what a Social Enterprise can be, and the environments in which they operate. Nifty.
Okay, but how do they make it all happen?
Social Enterprises, as seen above, can take many forms. They can also accomplish their social goals through a lot of different ways.
The 100% Model:
The 100% model is as simple as it seems; take 100% of your profits, and give it away. It’s an insanely powerful device for creating change, in part because the message is simple and it rids the consumer of any suspicion about ones intentions.
ThankYou, an Australian organisation, has hit the nail on the head with their approach to this model. They started in 2008 with a mission to sell bottled water to provide safe water to the countries that need it most. They expanded this to sell food to end world hunger, and soap and body-care products to fun hygiene education across the globe. But they hit a snag.
It was the crucial flaw of the 100% model - if you’re giving everything away; how do you scale? How do you grow a business that is unwilling to retain any cash? The solution is simple, beautiful, and awesome: Create another product, and 100% of the profit goes toward your growth. ThankYou released a book last year; Chapter 1. It’s mission is to fund ThankYou’s chapter 2. Using the 100% Model to solve the 100% problem.
The Buy-1-Give-1 Model:
This model is becoming increasingly popular due to its simplicity and direct link to a cause; you know that what you take is what you give. You buy a pair of shoes, you give a pair of shoes. It’s all connected.
Eat my Lunch is an increasingly popular example from New Zealand; so popular that they’re rushing to keep up. They send lunches to your workplace on the days you select, and for every lunch you buy, they give one to a schoolchild in need.
the intrinsic difficulty with this model is that in order to remain competitive, you have to take a solid hit in profits, half the cost of production (and by extension, the quality of your product), or both. There does seem to be a sweet and solid middle ground that the lucky and driven have found, but I don’t envy those who went looking for it.
The Social Employer Model:
Social Enterprises can benefit causes through more than just donations and products; they can also drive employment in communities and with groups that need it most.
Pomegranate Kitchen, for example, involves individuals from a refugee background at every level of their organisation; ensuring a diverse mix of people gain a diverse range of skills.
There are many more models and ways social enterprises facilitate social change, but those are just some of the ones I’ve stumbled on and fallen in love with!
Wrapping things up
The thing that stands to make Social Enterprise such a force in this world is the fact that it takes the social output of an organisation, and lifts it up to an equal priority alongside financial value. This is something consumers are finding increasingly enticing, as we begin to look at the origins of our products, and the ethics behind what we use every day.
The biggest obstacles, however, are intrinsically tied to this benefit. Because financial output is no longer king among these change-makers, they have fewer resources to innovate with, and are susceptible to being swallowed by the corporate giants that have the backing of millions of dollars per product. Social Enterprises fight the very nature of the market they operate in; a market that says cash is king. Either the currents will change, or our salmon will tucker out and stop swimming upstream. Either way I can’t wait to get involved myself, and look forward to creating the change we need in the world.
Until Next Time,
Finn Shewell | We Don’t Have a Name Yet
