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IREX Social Enterprise IREX Social Enterprise Orientation Training Orientation Training

Gbanga, Liberia Kim Alter

Virtue Ventures LLC

What is social enterprise? What is social enterprise?

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Hybrid SpectrumHybrid Spectrum

Social Enterpris

e

Nonprofit with

income activities

Traditional

Nonprofit

Traditional

Corporation

Corporate Social

Responsi-bility (CSR)

Socially Responsible Business

Mission Motive Stakeholder Accountability Income invested in

programs or overhead

Adapted from Lee Davis and Nicole Etchart.

Profit-Making Motive Shareholder Accountability Profits redistributed to shareholders

Both ValuesEconomicValue

SocialValue

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Definition 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.”

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What do we mean by social What do we mean by social problems problems Example: Millennium Development Goals

1. Eradicate extreme poverty and hunger2. Achieve universal primary education3. Promote gender equity and empower

women4. Reduce child mortality5. Improve maternal health6. Combat HIV/AIDS, malaria and other

diseases7. Ensure environmental sustainability8. Develop a global partnership for

development

Social Enterprise Social Enterprise CharacteristicsCharacteristicsEnterprise Approach: the enterprise is the change vehicle and uses market principles and entrepreneurshipSocial Aims: has explicit social objectivesValue creation: solve social problems while earning revenue through commercial means, generating “blended” social and economic value.Agnostic about legal form: Non-profit, for-profit, cooperative, hybrid, etc., depending on legal environmentS drives E: social value before financial value

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

words, words, the business the business opportunity lies in the social opportunity lies in the social

problem.problem.

Opportunities in Social ProblemsOpportunities in Social ProblemsProblems Sustainable Dev. Steps Opportunities for SE

Poverty Generation of employment and livelihood opportunities

Creation of micro-business services; micro-credit; community based enterprises

Non-potable water and sanitation facilities

Community participation in search of solutionsSubsidized pricing for poor

Creation of safe drinking water and sanitation enterprises

Rapid population growth

Empower women; and promote family planning, maternal and child health;

Creation of education and health social enterprises; sale of contraceptives

Ecologically damaging inefficient technologies

Increase the share of renewable energyPromote green technologies

Creation of renewable energy/green technology products

Social Problem IS the Biz Social Problem IS the Biz OpportunityOpportunitySocial Problem

1. Food insecurity2. Deforestation3. unemployment4. Illiteracy5. Limited access to

health services6. Barriers to

employment7. Lost of

livelihoods due to poor vision

Social Enterprise1. Bakery2. Ecotourism 3. Credit & training4. Publisher/education5. Discount pharmacy6. Café, janitorial,

thrift, landscape, etc.

7. Reading glasses

Video Examples of Social Video Examples of Social EnterpriseEnterpriseMartin Burt

Vision SpringGreyston Bakery

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Myth Busting:Myth Busting:Social Enterprise Realities Social Enterprise Realities

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Motivations for starting an Motivations for starting an SESE

66

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30

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50

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SE Impact on SE Impact on OrganizationOrganization

0% 10% 20% 30% 40% 50% 60% 70%

Entrepreneurial Culture

Self-sufficiency

Increased performance

Attract & retain staff

Attract donors

Improved leadership

Source: Powering Social Change: Lessons for Community Wealth Generation for Nonprofit Sustainability, Community Wealth Ventures, 2003

Mission AlignmentMission Alignment

78%

11%

5%3%

78% of SE relate directly to mission

3% of SE don’t relate to mission

Source: Powering Social Change: Lessons for Community Wealth Generation for Nonprofit Sustainability, Community Wealth Ventures, 2003

ProfitabilityProfitability

Unprofitable, 75%

Profitable, 24%

Don't know, 5%

Foster, William and Jeffery Bradach, “Should Nonprofits Seek Profits,” Harvard Business Review, February, 2005

The 1The 1stst Point 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 2The 2ndnd Point Point

Be clear about what you want to achieve with a social

enterprise Purpose

Objectives

The 3The 3rdrd Point PointThe greater the integration

the easier the execution and the greater the chance

success.

The 4The 4thth Point Point

Social Enterprise can be a vehicle to do more social

good and create more impact

It is an ORGANIZATIONAL STRENGTHENING TOOL

The 5The 5thth Point Point

Do what you know and leverage what you have to start your

enterprise

The 6The 6thth Point Point

Number ONE factor for success is the DESIRE to do a social

enterprise

Business approach fits with organizational culture