Social EnterpriseIn Different International Contexts

1. Janelle Kerlin
Asst. Professor
Nonprofit Studies Program
Georgia State University
CIES/Barcelona Program
May 7, 2012

2.  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.

3.  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.

4. 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).

5. The Economic Dimension
a) A continuous activity, producing and selling goods
and/or services
b) A high degree of autonomy
c) A significant level of economic risk
d) A minimum amount of paid work

6. The Social Dimension
e) An explicit aim to benefit the community
f) An initiative launched by a group of citizens
g) A decision-making power not based on capital
h) A participatory nature, which involves the parties
affected by the activity
i) A limited profit distribution

7.  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.

8.  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.

9.  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

10.  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.

11.  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.

12. 2004 2005
Local resources mobilised 20,000 USD 67,000 USD
Loans disbursed 12,416 USD 15,125 USD
Repayment rate 85% 89%
Profitability 5% 15%
Outreach Country-wide Country-wide

13.  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.

14.  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.

15. 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

16. “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)

17. ‘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

18.  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.

19.  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.

20. United Western Zimbabwe/ Argentina
States Europe Zambia
Outcome Economic Social Economic Self- Social/
Emphasis Sustainability Benefit Sustainability Economic
Benefit
Common Nonprofit/ Association/ Microfinance/ Coop/ Mutual
Organizational Company Cooperative Small Enterprise Benefit
Type (Company)
Societal Market Social Market Social
Sector Economy Economy Economy Economy
Strategic Foundations Government/ International Aid Civil Society
Develop EU
Base

21. MARKET
Southern
Africa
United
States
INTERNATIONAL Western STATE
AID
Europe
Argentina
CIVIL
SOCIETY

22. 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.