S. Dev Appanah
dev@trnlab.org
www.trnlab.org
JANUARY 2008
By accepting this document the Recipient is deemed to have recognized that this report is the property of TRN
Institute and that copyright relating to this report vests in TRN Institute. Images are reproduced without permission.

ation
bserv
&o outcome
nding
rsta mapping
unde rming
ainsto
br
typing SROI
to
id pro
rap ent
efinem
n&r
aluatio tation
ev
emen
impl

Youth Social Enterprise Initiative (YSEI)
www.ysei.org

what is social entrepreneurship?
INNOVATION
IMPACT
INCOME

balance the generation of social/environmental and economic returns to remain effective and
sustainable over time

Keys to a successful social enterprise*
Purely philanthropic Purely commercial
Appeal to goodwill Mixed motives Appeal to self-
Motives,
interest
Methods & Mission driven Mission driven &
Goals market driven Market driven
Social value
Social & economic Economic value
value
Subsidised rates or Market-rate prices
beneficiaries Pay nothing mix of full of payers &
those who pay nothing
Below-market capital, or
Key stakeholders
Donations & Market-rate capital
mix of donations &
capital
grants market-rate capital
Below-market wages, or Market-rate
workforces Volunteers mix of volunteers and compensation
fully paid staff
Special discounts, or mix
Make in-kind Market-rate prices
suppliers of in-kind & full price
donations
donations
* Sailendra Dev Appanah, TRN, http://www.thairuralnet.org/download/Social_entrepreneur_tools.ppt

Keys to a successful social enterprise
Purely philanthropic Purely commercial
Appeal to goodwill Mixed motives Appeal to self-
Motives,
interest
Methods & Mission driven Mission driven &
Wikipedia
Goals market driven Market driven
Social value
Social & economic Economic value
value
Subsidised rates or Market-rate prices
beneficiaries Pay nothing mix of full of payers &
those who pay nothing
Below-market capital, or
Key stakeholders
Donations & Market-rate capital
mix of donations &
capital
grants market-rate capital
Below-market wages, or Market-rate
workforces Volunteers mix of volunteers and compensation
fully paid staff
Special discounts, or mix
Make in-kind Market-rate prices
suppliers of in-kind & full price
donations
donations

Keys to a successful social enterprise
Purely philanthropic Purely commercial
Appeal to goodwill Mixed motives Appeal to self-
Motives,
interest
Methods & Mission driven Mission driven &
Aravind
Wikipedia
Goals market driven Market driven
Social value
Social & economic Economic value
value
Subsidised rates or Market-rate prices
beneficiaries Pay nothing mix of full of payers &
those who pay nothing
Below-market capital, or
Key stakeholders
Donations & Market-rate capital
mix of donations &
capital
grants market-rate capital
Below-market wages, or Market-rate
workforces Volunteers mix of volunteers and compensation
fully paid staff
Special discounts, or mix
Make in-kind Market-rate prices
suppliers of in-kind & full price
donations
donations

Keys to a successful social enterprise
Purely philanthropic Purely commercial
Appeal to goodwill Mixed motives Appeal to self-
Motives,
interest
Methods & Mission driven Mission driven & Hybrid
Aravind
Wikipedia
Goals market driven Market driven
Social value Cars
Social & economic Economic value
value
Subsidised rates or Market-rate prices
beneficiaries Pay nothing mix of full of payers &
those who pay nothing
Below-market capital, or
Key stakeholders
Donations & Market-rate capital
mix of donations &
capital
grants market-rate capital
Below-market wages, or Market-rate
workforces Volunteers mix of volunteers and compensation
fully paid staff
Special discounts, or mix
Make in-kind Market-rate prices
suppliers of in-kind & full price
donations
donations

water is supplied to the
children play on
schools and surrounding
advertising
merry-go-round
community
finances
maintenance
powerful pumps store lots
of water in tank
Clean Water: Playpumps Intl

Jaspal Shakya
Community Friendly
Movement

Marielle Nadal
idea!s

Salah Uddin Ahmad
XayanIT

Cyber-health program

CSR Institute, Stock Exchange Thailand
www.csri.or.th

Sus.
Social
NGOs Hybrid Biz
Biz
Ent
convergence

BUSINESS
3.0
Does business have a future?

At the rate
we’re going....

NO!

WHY?
(explicit)

can itself is
more costly and
complicated to
manufacture than the
beverage
Lean Thinking, James Womack & Daniel Jones
the life of a Cola can

loss of
ecosystem,
threat to other living
systems
land area cleared

natural resource
loss; improper
valuation of natural
capital
bauxite mined in Australia

producer
level waste
trucked to chemical reduction mill where 1 ton of
bauxite, when purified, generates half-ton aluminum

loaded on giant ore carrier and sent to Sweden or
Norway (1 month journey); sits in smelter for 2 months

energy loss
& heat not
captured
2 hours
smelter takes 2 hours to turn
half ton aluminum into quarter
ton of aluminum metal - ingots
10 meters long
cured for 2 weeks b4 being sent to
sheets are punched and cans are roller mills in germany each ingot
formed, painted w/ product info, heated to 900 degrees F and rolled
lacquered, flanged, sprayed w/ down into thinner sheets
protective coating
900 F

social cost of
urban migration?
factory workers bear the brunt of the toxic materials and
processes; most supply of cheap labour comes from
communities/ ecosystems that have been destroyed

1500 cans per
minute
health impacts
of synthetic
materials?

consumer level
waste; average 84%
of cans are
discarded
drinking the cola takes a few minutes;
throwing away the can takes 1 second

Every product we consume has a
social &
similar hidden history, an unwritten
inventory of materials, resources, and = ecological
impacts. It also has attendant waste footprint
generated by its use and disposition.
we’re killing the very systems that sustain business

WHY?
(implicit)

unsustainable capitalism
extract raw materials labour + tech = products sold for profits discarded somewhere
low or no values attached to largest
& fast depleting stocks of capital
natural resources living systems the environment

value disconnect
karma
Value
For-profits Non-profits
philanthropy

greenwashing
Energy consumption
=
Bangkok
Nonthaburi
Kanchanaburi
Samut Prakan
Pathum Thani
* Source: Green Peace Thailand

Oprah calls it the “rush of giving”
“The best shopping experience there is!”
philanthropy is just plain wrong because...
creating dependency on
sign that you’ve ‘stolen’ easy way to buy some
grantees
somewhere down the line “karma credits”
what’s the point of doing something
external to your business model???

irrational fear
• why aren’t we scared?
• we’re more scared about terrorism,
and flying, than smoking or global
warming
• we fret more about remote
possibilities than higher possibilities
• old brain living in a new world -
responding to old types of fear
• what we can’t control - driving vs.
flying
• immediate - smoking/ drinking vs.
flying
• threats readily available in memory -
fear of spectacular killings vs.
undramatic like smoking

...there is one and only one
social responsibility of
business – to use its resources
and engage in activities
designed to increase its
profits…To burden business
with wider goals, was pure and
unadulterated socialism”
Milton Friedman, Capitalism
and Freedom

true...but!
• accounting system flawed - natural capital treated as
free, unlimited and indispensable part of production
process
• business is interlinked - decisions made in biz world do
have repercussions in social and environmental spheres
• somewhere down the line, we forgot that business is
about value creation and profit is merely a tool to grow

triple bottom line
“… the truly sustainable company would
have no need to write checks to charity
or ʻgive backʼ to the local community,
because the companyʼs daily operations
wouldnʼt deprive the community, but
would enrich it. Sustainable companies
find areas of mutual interest and ways to
make ʻdoing goodʼ and ʻdoing wellʼ
synonymous, thus avoiding the implied
conflict between society and
shareholders”
Andy Savitz & Karl Weber, The Triple
Bottom Line

blended value
In the realm of the new model, then, if you want to
maximize economic value by generating financial
returns for investors, you should no longer be able
to do it without taking into account how your
execution of a business strategy is effected by
social and environmental factors. And if you want to
achieve greater social and environmental justice in
the world, you shouldnʼt be able to unless you
understand the economics of modern business.
Over coming decades we will have a window of
opportunity to significantly decrease poverty—and
create more sustainable (in every sense of the
term!) enterprises, companies driven to maximize
their full value potential. To do so, however, we must
advance a new understanding of how we invest in
value creation and manage corporations to capture
their full value potential.
Jed Emerson, Blended Value

economic
social
environmental
sustainability

green

reduce energy, waste
and costs
• biomimicry - based bldg design
termites nest
• temp maintained at 73 - 77 F
• less than 10% of energy in
equivalent bldg
• immediately saved US$ 3.5 million
by not installing a/c unit
• alternative fuel sources

Collins Companies
Wonderworld

innovative new products
& processes
• new material - solenium,
remanufactured back into itself
• production - simpler (fewer steps)
and less wasteful (99.7% less waste
& 0.3 gets reused)
• stain-resistant and easily cleaned by
water
• so superior, not marketed as
environmental product

open new markets
• new material - solenium,
remanufactured back into itself
• production - simpler (fewer steps)
and less wasteful (99.7% less waste
& 0.3 gets reused)
• stain-resistant and easily cleaned by
water
• so superior, not marketed as
environmental product

worker productivity
• ING designed green building in
HQ, Amsterdam - annual energy
savings of $3 mill
• building cost an additional 700k -
which was paid back in 3 months
• worker satisfaction gains in labor
productivity - 6% - 16%
• attracts and retains good talent
• more and more people want
meaning in their work - greater
good

differentiate yourself
reduce legal risk &
insurance cost

key points
• one intended goal can yield other unexpected benefits -
reduce bldg energy - improved worker satisfaction -
increase in bottom line
• linear is out, cyclical is in!
• innovation & experimentation - we are born from here
• measure, measure, measure - like TQM, six sigma -
measure against a triple bottom line
• internet - abundance of knowledge & info - blogs!
• business as usual is dead - evolve!

\"I don't think it's that naïve to actually think that the mission of business is
to help create a better world, Why is 'greed is good' the only motto for
business? Why not use business for idealistic purposes and yet be a
profitable business?\"
Ho Kwon Ping, Founder of Banyan Tree Group