Category: Speaker & Partner Blogs

image

Brand social enterprise as Capitalism 2.0

Category: Speaker & Partner Blogs

Posted by: Jo Seagrave / 24 July 2018

By Eric Lombardi

Eco-Cycle International

 

Let’s brand the “profit-for-purpose” social enterprise as Capitalism 2.0

The not-for-profit shops we all know and love, like thrift stores and animal shelters, conduct business and are fulfilling a beneficial social purpose. This form of nonprofit social enterprise is widespread and growing, but I wouldn’t say it is revolutionary in the way I’m thinking. My focus is on a relatively new approach to business called the “for-profit social enterprise”, and if it grows to a large enough scale it could have profoundly positive impacts on the U.S. and the world.

The current world leader in this approach to social business, the U.K., especially Scotland, has created a legal vehicle for for-profit social enterprises called “Community Interest Companies” (CIC’s). The creation of legal status is important and at the heart of the revolutionary potential of social enterprise. The legal form one chooses for a business entity has important financial implications related to raising money, paying taxes and public transparency. And so it is for the social enterprise (SE) – a new set of regulations and rules from the government determines the financial structure and opportunities for the future.

Social enterprise legal forms are different in every country, but a review of the various approaches from the U.K., the E.U., Australia and Canada show an emerging trend with common elements:

  1. The SE must be created and operated to fulfill a social or environmental mission first and foremost;
    The profits must be returned to fulfill this mission either wholly (100%) or partially (more than 51%);
  2. Dividends paid to investors must be limited to a percentage of net profits, usually between 0-35%;
  3. Assets of the SE are “locked” in the way assets of nonprofit 501(c)3 organizations are locked;
  4. eaning that they can only be sold to another SE or nonprofit entity pursuing a similar mission;
  5. The financial accounting of the SE must be open to public review in a manner similar to nonprofit organizations.

Social enterprises in the U.S. are currently operating as small businesses in many sectors, such as restaurants, food production, and reuse/recycling programs. Their profit-for-purpose missions include job training and skills development for hard-to-employ populations, environmental protection, housing for the homeless, youth development, and economic justice. The only legal form that requires an American for-profit social enterprise to pursue their social mission first and profit second is called the “Low-profit Limited Liability Company” (L3C).

The future holds the potential for SE to grow into something much more significant than it is today, and, dare I say, could be a social revolution in how we view capitalism itself. I am imagining a social enterprise with a large work force, capital assets and marketplace savvy sufficient to partner with local governments to pursue the community-scale public missions that require new infrastructure for climate-smart waste, energy and transportation systems. The traditional “single bottom-line” (profit) business approach is clearly not working fast enough to prevent global warming from increasing, so a new approach is needed.

I can imagine bigger and better outcomes for our communities when SE links arms with the government to spearhead the creation of well-funded facilities to support Zero Waste and Zero Carbon goals. The SE wouldn’t necessarily have to do all the direct work, it could play an oversight role by subcontracting out projects to private sector companies willing to support the mission and limit their profit-seeking in exchange for an increased degree of market safety. I would call it a form of negotiated competition.

The strength of this new approach would be that the government, representing the community interest, would establish a clear vision and goal for the future, while the SE would bring the sector expertise and transparency to the table. Together this public-private team would be constantly monitoring, planning, analyzing and adjusting multiple contracts and programs, always with the dual goals of achieving tangible progress while participating in the financial gains and losses within a negotiated range.

Could it work? My experience running a recycling social enterprise tells me it can because we did it on a small scale. In the 1990’s we grew a network of ten small recycling drop-off centers throughout our County in cooperation with the local governments. Our social enterprise designed, financed, and operated the centers on behalf of the government in exchange for negotiated risk/reward contracts with the goal of our SE making around a 10% profit each year, getting our investment back, and after ten years turning over the ownership and operation of the centers to the local government. Public ownership of the green infrastructure is essential for ensuring longevity and scale regardless of market forces.

The future growth of profit-for-purpose enterprises offers the traditional business sector new ways of participating and supporting social and environmental programs that have high non-financial benefits but limited profit opportunities. The financial operating systems for our nations are a bit like computer operating systems, and we all know how even the best of those are given “upgrades”.

I think Social Enterprise is an upgrade to capitalism, and that can be nothing but good in these times of social and environmental challenges.


Eric Lombardi has been working at the cutting-edge of the Zero Waste and Social Enterprise Movements across the world since the mid-90’s. His working mission has been to transform the “waste management” industry into a resource management industry.

Read More >
image

By Marie Marin 

CEO, Employers For Childcare

Back in the late 1990s, responding to the barrier a lack of affordable childcare presents to working parents, I developed a community project encouraging employers to implement family friendly policies. From this project, reliant on funding, Employers For Childcare has grown to be a completely self-financing social enterprise, contributing 100% of profits to our charity supporting parents to get into and stay in work. Having been a working mother of two boys I identify with the challenges and frustrations experienced by the thousands of parents our charity supports. Although my sons are now grown, and childcare is no longer a personal concern, access to appropriate childcare for all remains an issue close to my heart.

In supporting parents to get into, and stay in, the workforce it can help to reduce poverty and inequality across the UK.

Childcare as an economic issue

That is why our ethos is to address childcare, not only as a social issue, but as a labour market and economic issue. We do this in several ways, providing immediate support and assistance to families at the same time as understanding and addressing root causes and fundamental issues. It was important to me, from the beginning, that our charity became part of the solution, not simply highlighting problems. Everything we do is underpinned by our ongoing research which we share with policy makers, politicians, third sector organisations, employers and parents.

And what have we found? Well we know that an inability to pay for childcare is a key contributing factor to poverty and inequality. In 2017, our research with parents in Northern Ireland revealed almost one third of households were paying more for childcare than on their mortgage or rent. Close to half of parents reported their household had had to ‘go without’, or cut back on another expense, in order to meet their childcare costs. It isn’t acceptable that some working families struggle to heat their homes, or are reliant on foodbanks, in order to meet their childcare bill.

Having found that many families were unaware of the support they are entitled to, we established a Family Benefits Advice Service operating a helpline offering free, impartial and confidential advice on childcare and financial support available to parents – right across the UK. As well as the helpline, our Advisors offer community and employer outreach, delivering 458 advice and information sessions last year.

In 2016/17, we identified collective savings of over £14.8 million for the parents we supported – with an average saving for working parents of £4,130. This is money these families are entitled to, but were unaware they could be claiming and makes a huge difference to them.

Lobbying Government
Not content to accept the status-quo in terms of the support available to working parents, we address policy directly and lobby Government on childcare, family and work-related issues. We are currently calling on the UK Government to keep Childcare Vouchers, a valuable form of financial support to working families, open to new entrants, beyond the planned closure date of October. We have prepared briefings for MPs and suggested ways in which Government can keep Childcare Vouchers open, alongside Tax-Free Childcare, within their funding envelope. Our work continues….

Looking ahead
We are in the process of expanding our social enterprise, developing a new project comprising an indoor activity centre which will be inclusive and accessible for all, particularly addressing the requirements of families who have a child with additional needs. Hopefully I can provide an update on progress at September’s conference!

 


www.employersforchildcare.org/

Read More >
image

Puzzles and partnerships

Category: Speaker & Partner Blogs

Posted by: Jo Seagrave / 24 June 2018

By Alexandra van der Ploeg

Head of Corporate Social Responsibility, SAP

What if all 7.6 billion people in the world tried to put together a jigsaw puzzle? Each person with a piece of the puzzle. The private sector; public sector; social entrepreneurs; policy makers—the list goes on. Could we do it? Would we agree on why we should do it? Where would we start? With friends and family or with employers and countries? Could we “create an app for that”? Chances are, we’d never finish the puzzle and most likely would feel too daunted by the task to even start.

Does that mean it can’t be done?

Like the world trying to complete a jigsaw puzzle, our work is connected, but our efforts may not always be. Three years into Agenda 2030 we see more corporations developing strategies to contribute to the achievement of the UN Sustainable Development Goals (SDGs). With that comes increased awareness of a whole sector that has been working for years on systemic change – social enterprises.

With principles such as innovation, transformation and purpose embedded into the DNA of a social enterprise, it is only logical that we should see increased partnerships between corporations and social enterprises in the pursuit of collective impact. It’s why SAP is honored to partner with the Social Enterprise World Forum (SEWF) for the second year in a row, as we understand and believe in the power of an open platform like SEWF to unite different stakeholders and enable collaboration and knowledge sharing to effect sustainable social change.

The social enterprise movement is of course not new. In the last 20 years we have seen the emergence of organizations crucial in developing the sector, such as Ashoka, the Skoll Foundation, the Schwab Foundation for Social Entrepreneurship, Social Enterprise UK and 10 years ago the Social Enterprise World Forum, leading to a staggering number of social enterprises that are founded across the globe every day. Just recently I learned that in the UK alone there is a vibrant social enterprise community with around 70,000 social enterprises, employing almost 1M people – numbers that demonstrate how powerful this sector has become in such a short period of time!

Yet I would argue that we are seeing two trends with the potential to increase the relevance of social enterprises even further. One is of course Agenda 2030 and the other being the growing demand by society that companies serve a social purpose. Let me elaborate a little.

In September 2015, the world was witness to a historic moment – the adoption of Agenda 2030 and its Sustainable Development Goals by all 193 UN member states. Historic 1) as for the first time ever there was a clearly outlined and unified plan of action to create a world without poverty, a healthy planet, and a just, peaceful society for everyone 2) the adoption of the SDGs resulted from an unprecedented inclusive process, with governments, business, civil society and citizens.

Over the last two and a half years, the world has taken crucial steps together, but it is also clear that multi-stakeholder partnerships and true collaboration are required to achieve the SDGs. With their core competence in social innovation and transformation, social enterprises bring a level of expertise to the table second to none, making them an invaluable partner in achieving collective impact for the SDGs.

So what about purpose?

Purpose matters to just about everything. Social enterprise or not, people want to support companies dedicated not only to solving business problems, but that have a social conscience, as well.

In January 2018, Larry Fink, Chairman and CEO of BlackRock Inc., issued a letter to CEOs with a very clear message. When the owner of an investment fund that manages 1.7 trillion USD in active funds, calls for companies to make a positive contribution to society beyond their financial performance, it sends a ripple effect through the business community. In other words, to stay relevant and secure future success, companies are learning to make decisions that create collective economic, social, and environmental impact. Who better to look to than social enterprises that have made systemic social change their reason to exist?

As I shared in my puzzle metaphor, we are all working on different pieces of the same problem, we just might not always be working together (yet!). Partnerships built through ecosystems like Social Enterprise World Forum help all of us to forge uncommon collaboration to deliver on our shared purpose.

What’s next?

I look forward to continuing the dialogue on how the pursuit of partnership, a shared purpose and innovation lead to greater impact for all. No organization can go it alone, but together, we can transform industries, grow economies, lift-up societies, and sustain the environment.

 


SAP is a SEWF C.I.C. Global Partner

As market leader in enterprise application software, SAP is committed to helping companies of all sizes and industries become best run businesses. Now more than ever, being the best means making a difference. It means connecting people and information to address the world’s biggest challenges. SAP is thrilled to sponsor SEWF.

www.sap.com/purpose

@sap4good

Read More >
image

SEWF 2017 is still influencing what I do today

Category: Speaker & Partner Blogs

Posted by: Jo Seagrave / 04 April 2018

By Michelle Ferguson

Director of Scotland’s Bravest Manufacturing Company

Why would I want to fly around the world to be part of the SEWF 2017, especially as I don’t enjoy flying? Wouldn’t it be just another conference where you scribbled down some notes and collected business cards from people you would never hear from again?

I can say a definite no, that wasn’t the case.

Scotland has made a huge headway in terms of social enterprise with a national 10-year strategy, business support programme, social investment, and education and leadership initiatives. But I saw first-hand how much we can learn and gain from spending time with other people making change around the world.

The experience of networking and collaborating with other social enterprise leaders has fundamentally changed the way I think about my social enterprise. Although we are a small enterprise in the West of Scotland we are very much part of a global community of social enterprises, and my experience at SEWF has been transformational.

Yes, we have a lot to share but the knowledge, passion and experiences that come from hearing from other nations, leaders and practitioners about their developments and the impact they are making to their communities is both insightful and inspiring.

It wasn’t just the keynote speeches, the shared understanding and purpose that made the Forum stand out for me – it was actually the discussions at coffee stands, the people who in normal circumstances you wouldn’t get the opportunity to speak to.

I was having a quick bite of lunch on my own one day when I was joined by Wan-Ju Yu, a legislator from Taiwan. We chatted about our countries and the difference social enterprises can make to economies, in addition to the positive benefits to cultures and to society. She had set up her own social enterprise and due to her success had been approached to stand for government. She is now influencing decision making at a senior level.

I don’t think I have spent time with anyone as unassuming and inspiring as Wan-Ju Yu. She made me realise the impact we can make and that governments around the world really are focusing on what our sector is delivering.

Another day, standing waiting to join one of the facilitated sessions, I met Lucretia de Jong from Try Australia, the oldest non-profit/social enterprise in their country. They have really innovative ways of working which improves the lives of their beneficiaries, offers new skills, valuable work, and training and gives them the opportunity to build a home. Their team-centric approach really struck a chord with me and in my new position as Director of Scotland’s Bravest Manufacturing Company, I am going to implement many of the strategies she shared with me. In fact, a lot of the things we are putting in place here are because of what I heard and learnt in New Zealand.

Those were just two of the remarkable people I met. I also made connections with many others whom I continue to be in contact with – not just from around the globe but from Scotland and the rest of the UK. The most difficult thing was choosing which sessions to attend. My advice is to book as early as possible.

So if you are like me, you want to hear from the most influential speakers, leaders and politicians who are involved with the worldwide social enterprise movement I would wholeheartedly recommend that you attend the World Forum in Scotland.

It is an experience which will change your perception and invigorate and challenge you in a way that no other event of its kind will.

Read More >