Social enterprises


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Social enterprises

  1. 1. THE REGIONAL AIDS TRAINING NETWORK (RATN) The Capacity Building Mini- Conference, Kenya. “A shifting capacity building environment that demands for results” “Social Enterprises” Presentation by: David Kairo Serena Beach Hotel|Mombasa|29th June 2013
  2. 2. Presentation Structure • Definitions • Case Studies • Change Management
  3. 3. Water Resources: 2 Locations CE&L 3
  4. 4. Emergence of Social Enterprise  Financial sustainability pressure on NPO’s  Recognition of business to tackle social problems  Outsourcing by Government e.g. waste management 4© 2013 CE&L
  5. 5. Education… CE&L 5
  6. 6. Definitions • There is NO single acceptable definition of social enterprise • The consistent theme in all definitions is that social enterprises are businesses that trade for the primary purpose of creating a positive and lasting impact on society. • The East Africa Social Enterprise Network (EASEN) is a regional institution driving the SE agenda 6© 2013 CE&L
  7. 7. Definitions cont’d a. Social entrepreneur: One who" builds strong and sustainable organization, which are either set up as not-for-profits or companies” b. Social Enterprise: “Business trading for social and environmental purposes.” c. What is social economy: “ An economy that contributes to improved quality of life for all in the community rather than only a privileged few. It is built on economic justice and democratic participation.” 7© 2013 CE&L
  8. 8. Definitions cont’d d. Social Return on Investment (SROI): An approach for measuring and accounting for a broader concept of value i.e. measure of change in relation to social, environmental, economic and other outcomes. 8© 2013 CE&L
  9. 9. Why would you want to change your business model?  Identify “risk” factors and how to deal with them.  Check adequacy of starting capital  Are projections realistic  Check business link to organizational goal  Adequacy of systems, skills and staff to manage the business Which of the above had you not considered? Organisational Preparedness 9© 2013 CE&L
  10. 10. VISION, MISSION AND VALUES Adapted form Private Sector Growth Programme Toolbox 10© 2013 CE&L
  11. 11. Impact/Profitability Matrix 11CE&L
  12. 12.  Legal form  Rethink tax obligations  Cost allocation  Internal Conflicts/culture clash  Remuneration and incentive schemes  Growth risk leading to mission drift  Effect on competitors and regulators  Realization of triple bottom line i.e. financial, social and environmental Which is difficult to deal with? Business Effect on Organization 12© 2013 CE&L
  13. 13. Business Opportunity? Opportunity: A perceived means of generating economic value (SROI) that previously has not been exploited and is not currently being exploited by others. Characteristics of a viable opportunity: 1.Potential economic value: the capacity to generate SROI 2.Innovation: something that did not exist previously 3.Perceived desirability: moral and legal acceptability in society 13© 2013 CE&L
  14. 14. Opportunity Checklist Why is your client going to pay you (substantially) more for the product you are providing than it will cost you to produce? Who is the target customer? What are their needs, What are their alternatives? (Competition) NB. Do you have a sustainable competitive advantage? 14© 2013 CE&L
  15. 15. What three or four things must go right in order to succeed? a.Is our management team capable of making it happen? *Timing considerations a. Is the window of opportunity broad or narrow? b. Is timing critical to capturing market share? c. Who else is trying to get there first? Critical Success Factors 15© 2013 CE&L
  16. 16. 1. Identifying viable business ideas 2. Thinking money/capital is the problem 3. No top management support 4. Hurry/Urgency to see results/profits 5. Writing proposals easier than growing enterprises 6. Assumption that funding is ‘ever present’ 7. Lack of skills and training in entrepreneurship 8. Limited and stretched staff 9. Resistance from beneficiaries to pay for services 10. Lack of clear plans and goals 11. Limited Access to appropriate finance Challenges in Starting Ventures 16© 2013 CE&L
  17. 17. News… Posted Monday, March 25 2013 at 00:30 Out of the world’s7 billion people, 6 billion have mobile phones compared to only 4.5 billion people who can boast having access to a working toilet. 17© 2013 CE&L
  18. 18. ??Same Problem, Diff Solution 18© 2013 CE&L
  19. 19. Kenya Red Cross Financials Adapted from the annual report and financials statements 2011 19© 2013 CE&L 2011 (Kshs) 2010 (Kshs) Income 476,9m 296.4m Expenditure (357.6m) (287.8m) Surplus 269.7m 8.6m
  20. 20. ‘Ambulance’ /E-Plus 20© 2013 CE&L
  21. 21. Boma Hotels 21© 2013 CE&L
  22. 22. Kickstart cont’d Impact to Date Over: 64,000 new businesses started 800 new businesses per month $79 million a year in new profits and wages generated by the new businesses New revenues equivalent to more than 0.6% of Kenya’s GDP and 0.25% of Tanzania’s DGP 22© 2013 CE&L
  23. 23. Case Studies 23© 2013 CE&L
  24. 24. Pacis Insurance All profits made by the company go to sponsor, the various arms of the church, that then reinvest the money back into the community through numerous projects. There are an estimated 7.5 million baptized Catholics in Kenya, approximately 33% of the population. 24© 2013 CE&L
  25. 25. Honey Care • Honey Care Africa was established in 2000 as a private sector social enterprise to promote sustainable community-based beeping in Eastern Africa. • It collects the honey at the farm gate and pays for it on the spot, then processes, packs and sells the honey for profit through supermarket chains and other industrial clients. 25© 2013 CE&L
  26. 26. Honey Care Model- Bee Keeping 26© 2013 CE&L
  27. 27. The Overall Market System Model – Adapted from Private Sector Growth Programme Toolbox Macro economy Monetary and fiscal control Trade, industrial, financial sector policies Trade Aid Trends and tastes Technology Information Government services Health and education Utilities Infrastructure Security services Society & culture Demographics Consumer tastes Attitudes towards business Climate & Environment Natural resources Weather Agricultural cycles Government & Politics Legislative, policy Making process Judiciary Security & stability Resources Markets 27© 2013 CE&L
  28. 28. Six Silent Strategy Killers… • Ineffective management team • Top-down management style • Unclear strategy and priorities • Inadequate Leadership skills • Poor communication across borders • Poor vertical communication 28© 2013 CE&L
  29. 29. Conclusion Community Involvement model is key Possible challenges - Access to fixed assets - Perceived a s ‘foreign’, rich pockets - Poor communication (buy in) - Opposition by politicians 29© 2013 CE&L
  30. 30. Change Management Exercise 30© 2013 CE&L
  31. 31. Conclusion ”Social entrepreneurs don’t want to help. They want to change the world”. Bill Drayton 31© 2013 CE&L
  32. 32. Website References EASEN Website: One Health Organisation: Website PennSEM Website: Skoll world forum : of-social-entrepreneurship-in-china/ Wikipedia: means/ 32© 2013 CE&L
  33. 33. Questions and Comments Contact Details David Kairo Manager, Centre For Entrepreneurship and Leadership (CE&L) KCA University, Kenya. EASEN Board Member Websites: & 33© 20et3 CE&L
  34. 34. © 2013 CE&L 34