Janelle Kerlin Asst. ProfessorNonprofit Studies Program Georgia State UniversityCIES/Barcelona Program May 7, 2012
Social enterprise is the use of market-based approaches to address social issues in specific, often innovative, ways. Specific conceptualizations are shaped by the regional context.
Civil society organizations that receive earned income in exchange for products or services. Social cooperatives. Micro-finance lending institutions and enterprises. “Recuperated” employee-owned companies.
Is corporate social responsibility a form of social enterprise? Social enterprise only occurs where the main purpose of the organization is social benefit. OR Some forms of CSR may be viewed as social enterprise such as high levels of corporate philanthropy.What is a social entrepreneur? Anyone who operates a social enterprise. OR A highly innovative social activist who creates scalable and lasting change (whether or not it is market-based).
The Economic Dimensiona) A continuous activity, producing and selling goods and/or servicesb) A high degree of autonomyc) A significant level of economic riskd) A minimum amount of paid work
The Social Dimensione) An explicit aim to benefit the communityf) An initiative launched by a group of citizensg) A decision-making power not based on capitalh) A participatory nature, which involves the parties affected by the activityi) A limited profit distribution
A response to unemployment, hard-to-employ populations. Multi-stakeholder ownership–-workers, managers, volunteers, costumers, donors, public authorities. Democratic management style. Limited distribution of profits. Receive government subsidies.
Law specifically for disadvantaged workers. 30% of the employed must be disadvantaged. Disadvantaged must be members of the cooperative. Tax relief for cooperatives and exemption from social security payments for disadvantaged. Considered first for public work contracts.
Six cooperatives created through the efforts of deinstitutionalized mental health patients and staff. Cooperatives provide services in the areas of cleaning bookbinding photography and video graphics carpentry (furniture for schools and hospitals) restaurants, pubs, hotel hairstyling building renovation landscaping home health/caseworker services
Response to underdeveloped economies, high rates of unemployment, deep poverty. Small loans to develop agricultural or craft-related small businesses. Loans given to solidarity groups due to the absence of collateral among individual borrowers. Goal is long-term sustainability of initiatives.
Most enterprises operate in the informal market due to restrictive business laws. Both microfinance lending institutions and international NGOs provide financing. A motive for INGOs is to reduce the dependence syndrome in local communities. In the majority of cases, loan repayment rates have reached 90 percent.
Response to 2001 economic crisis that resulted in 21% unemployment. Abandoned companies taken over by workers under a system of self-management. 170 recuperated companies employing 12,000 workers. Supported by large local community networks.
Owners abandoned company having not paid workers in several months. Workers restarted the company only to have police throw them out several months later. Over 10,000 people unsuccessfully tried to help workers retake the factory. After two years, a judge declared the company bankrupt and passed the assets to the cooperative.
Definitions: “An activity intended to address social goals through the operation of private organizations in the marketplace.” Dennis Young “Organizations or ventures that achieve their primary social or environmental missions using business methods.” Social Enterprise Alliance
“A continuum from for-profits engaged in social activities to hybrids that mediate profit goals with social objectives to nonprofits engaged in commercial activity.”For-profits Hybrids Nonprofits(with social activities) (with profit & social goals) (with commercial activities)
‘Business’ Social Enterprise: – Corporate Philanthropy (?) – Dual Purpose Business (hybrids) – Business-Nonprofit Partnerships‘Nonprofit’ Social Enterprise: – Social Purpose Organization – Trade Intermediary – Nonprofit/For-Profit Subsidiaries – Nonprofit-Business Partnerships
The main purpose is to provide a revenue stream to support any socially beneficial activity (it is not focused primarily on unemployment). By some accounts, commercial revenue makes up more than 50% of total nonprofit revenue. Compared to W. Europe, the government has had limited interest in strategically financing social enterprise.
Georgia Justice Project Provides ex-offenders with employment and job training in a landscape company. Provides limited income for the nonprofit. Goodwill Industries Provides income to the nonprofit through thrift shop operations. Thrift shop provides limited jobs for the hard-to- employ.
United Western Zimbabwe/ Argentina States Europe ZambiaOutcome Economic Social Economic Self- Social/Emphasis Sustainability Benefit Sustainability Economic BenefitCommon Nonprofit/ Association/ Microfinance/ Coop/ MutualOrganizational Company Cooperative Small Enterprise BenefitType (Company)Societal Market Social Market SocialSector Economy Economy Economy EconomyStrategic Foundations Government/ International Aid Civil SocietyDevelop EUBase
MARKET Southern Africa United StatesINTERNATIONAL Western STATEAID Europe Argentina CIVIL SOCIETY
1) Discuss examples of social enterprises from your countries and list them on Worksheet #1.2) Complete the comparison table in Worksheet #1 for each country in your group.3) Using your responses on Worksheet #1, think about how much social enterprise in your country/countries relies on or involves the Market, the State, Civil Society, and International Aid. Place your country/countries on the diagram in Worksheet #2 in the place that best reflects their relative reliance.