The document discusses the growing interest in social enterprise development in South Africa, highlighting its potential to address social problems through sustainable business models. It outlines the current landscape, challenges, and opportunities for social enterprises, including the lack of a clear definition and support mechanisms. Various stakeholders, including government and organizations, are encouraged to enhance understanding and funding for social enterprises to maximize social impact.

1. Opportunities in social enterprise
development ?
Bridget Fury
bridget@bridgetfury.com

2. Introduction
Interest in social enterprise (SE)is growing in South Africa
(ILO, GEM, UJ research SEWF, Government interest, etc.)
A growing belief in the advantages of SE in delivering social
/ developmental goals
But, it is a relatively new concept and not well understood
and definitions can be contentious
Social enterprise vs. social entrepreneurship confusion
B-BBEE codes encouraging enterprise development (ED)
support
Confusion over ED and CSI / SED boundaries

3. 2010 scoping exercise aimed to better
understand
What is meant by social enterprise in South Africa?
Where, if any, overlaps exist between CSI, enterprise
development and social enterprise?
What organisations currently exist in the social
enterprise space in South Africa and what do they do?
What is the current policy environment?
How to encourage more focus on and money into social
enterprise development?

4. What is a social enterprise?
No legal definition of social enterprise in South Africa
ILO National Conference agreed a working definition:
“A social enterprise’s primary objective is to address social problems through a financially
sustainable business model where surpluses (if any) are mainly reinvested for that
purpose”
GEM Report 2009 working definition:
“individuals and organisations engaged in entrepreneurial activities with a social goal”
Three generally accepted components:
social purpose is primary objective
business model is financially sustainable
accountability and transparency

5. What a social enterprise is not
A social enterprise is not any organisation run by a
social entrepreneur
A corporate entity or directly-owned subsidiary is not a
social enterprise
A business whose purpose is profit maximisation, even if
it creating social value, is not a social enterprise

6. Summary of the GEM Report – social
enterprise
Defines social entrepreneurship broadly to include:
 “individuals and organisations engaged in entrepreneurial activities with a social goal”
South Africa’s social entrepreneurship activity (SEA) is average relative to other similar
economies
However, differences exist as follows:
Fewer women involved in SEA in South Africa
Fewer 18 -24 year olds involved in SEA in South Africa . Individuals aged 25-34 most likely
to be involved
There is little population association with SEA in South Africa (there is for EA)
There is less SEA in rural areas than in urban areas in South Africa
There is a perception that SEAs are more capable that Government or civil society
organisations to deliver social good
Therefore, why are there not more social enterprises, or is the study not identifying
them?

7. Social enterprise – a potential win-win
 Social enterprise presents a simple and compelling
opportunity for corporates
 By supporting sustainable businesses which meet social needs
we can create lasting social impact
 If social enterprise can qualify for both SED (CSI) and ED
BEE scorecard points, 20 points up for grabs
 A win-win-win for business and society
 Not just finance required, but also essential non-financial
BDS needed

8. Benefits and risks
 Potential benefits:
 Meet both the ED and SED requirements
 Lobby for inclusion of social enterprise in section 18A tax status
 Direct social impact and create jobs
 Potential risks:
 Potential tension between delivering on both financial and social
agendas
 Few established social enterprises in South Africa with long
track records, although may emerging

9. Social enterprise and “blended value”
 Impact Investing:
A market-based approach to addressing many of the social and environmental issues facing
the global community Monitor Institute & WEF
 Blended value:
Investors simultaneously generate financial and social / environmental through providing
capital to organizations, where the where the value itself is non-divisible and thus a blend.
Jed Emmerson
 SROI:
discounted, monetized value of the social value that has been created, relative to the value
of the investment. Roberts Enterprise Development Fund

10. The Policy environment
 ILO has been leading the policy dialogue
 A 2009 National Conference made various
recommendations, including:
 Encouraging the government to stimulate the market for social
enterprise
 Developing intermediary space and products to link investors to
social enterprise (A Guide to Finance for Social Enterprise in
SA)
 Exploring mechanisms to mitigate risk to free up commercial
finance

11. Business Development Service (BDS)
providers
Few BDS providers have an explicit social enterprise focus
Some that do, include:
TechnoServe
Heart Global
UnLtd South Africa (with partners where possible)
Examples of general BDS (non-financial ) providers with interest
in / opportunity to service SE:
Business Place
Black Umbrellas
Raizcorp

12. Business Development Service (BDS)
providers (cont.)
BDS providers (finance plus):
Enablis
Endeavor
Government initiatives (past / present):
A number of government initiatives in place to support SMMEs, through
provision of finance and or BDS. E.g. SEDA, NYDA, Khula, etc.
Commercial banks / corporates:
Many of the banks provide some BDS in small business loan packages or
support of public-private partnerships (e.g. Enablis Khula Loan Fund)
Corporate BDS provision in conjunction with finance to internal ED
programmes e.g. Anglo Zimele, Sasol

13. South African collaborations
African Social Entrepreneurs Network
Membership-based online platform to enable collaboration and access to
resources for social entrepreneurs
ILO- SETYA
A programme of research and policy dialogue to strengthen
understanding of SE as a concept
Includes: UJ research on enabling environment; SAIE research into social
BDS need; a National conference on enabling environment; various
research projects (international, national, community); and formation of a
Financing for SE working group

14. South African collaborations (cont.)
SASIX (SAII, Business Trust and JSE)
Research currently being undertaken to asses the feasibility of creating a
fully independent social stock exchange in South Africa.
Phase One has seen the creation of an online database of all constituencies
UnLtd Pathfinder Group
A group of interested individuals used to test UnLtd ideas and
methodology on entry into the South African market
Pathfinder Group will have opportunity to test M&E framework being
developed
ANDE South Africa
South African chapter of the international network which provides support in the
small and growing business area

15. Some South African social enterprises
 Johannesburg Housing Company www.jhb.co.za
 Heart Lines – www.heartlines.org.za
 Streetwires – www.streetwires.co.za
 Stitchwise – www.stitchwise.co.za
 Wizzit Bank – www.wizzit.co.za
 MSR Project (previously Men on the side of the Road)
www.employmen.co.za
 TSiBA Education www.tsiba.org.za
 Lapdesk www.lapdesk.co.za