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Social Enterprise Introduction
- 2. Overview: - What is a social enterprise? - Dealing with uncertainty as a social entrepreneur - Understanding the social problem and your solution - Measuring and Evaluating Impact: Three models
- 3. What is a social enterprise?
- 4. Doing well…
- 5. … and doing good.
- 7. What do you think?
- 8. How is a social enterprise different from... - a charity? - a CSR programme?
- 9. A charity...
- 10. A charity… relies on grants and donations.
- 14. A CSR programme… is motivated primarily by PR and cost-saving.
- 17. Social Enterprises have a double bottom line
- 18. Double bottom line financial social
- 19. Double bottom line financial social Sustainability & self- sufficiency
- 20. What are some of the challenges for social entrepreneurs?
- 21. Uncertainty for social entrepreneurs: - Intractable social problems
- 23. Uncertainty for social entrepreneurs: - Intractable social problems - Creating new markets
- 25. Uncertainty for social entrepreneurs: - Intractable social problems - Creating new markets - How to establish price points
- 27. Uncertainty for social entrepreneurs: - Intractable social problems - Creating new markets - How to establish price points - Poor or non-existent infrastructure
- 29. How do you mitigate against this uncertainty?
- 32. Understand the problem Human Centred Design
- 33. Understand the problem Human Centred Design 1. Primary research: Learn from people
- 35. Understand the problem Human Centred Design 1. Primary research: Learn from people 2. Secondary research: Speak to experts
- 37. Understand the problem Human Centred Design 1. Primary research: Learn from people 2. Secondary research: Speak to experts 3. Immerse yourself in context
- 39. Understand the problem Human Centred Design 1. Primary research: Learn from people 2. Secondary research: Speak to experts 3. Immerse yourself in context 4. Analogous inspiration
- 41. Understand the solution 1. What are the costs involved?
- 42. Costs?
- 43. Understand the solution 1. What are the costs involved? 2. How will you generate revenue?
- 44. Revenue?
- 45. Understand the solution 1. What are the costs involved? 2. How will you generate revenue? 3. Who are your beneficiaries?
- 46. Understand the solution 1. What are the costs involved? 2. How will you generate revenue? 3. Who are your beneficiaries? - What will they have to do differently?
- 47. Beneficiaries?
- 48. Why should you measure and evaluate your impact?
- 49. Why should you measure and evaluate your impact? It can be difficult and time-consuming, but there are three good reasons to do so...
- 50. Measuring and Evaluating Impact 1. Understand your social impact
- 51. Measuring and Evaluating Impact 1. Understand your social impact 2. Attract investors and mentors
- 52. Measuring and Evaluating Impact 1. Understand your social impact 2. Attract investors and mentors 3. Tendering for public services (Social Value Act)
- 53. Examples of Impact Models 1. Social Return on Investment 2. Mission / Financial Axis 3. Theory of Change Model
- 54. 1. Social Return on Investment 1. Based on Cost-Benefit Analysis 2. Social Value (£) : Investment (£1) 3. Clear and easy-to-understand reference point theSROInetwork.org
- 55. 2. Mission / Revenue Axis When evaluating a new project or direction… 1. Does it align with your mission? 2. What revenue does it bring?
- 56. Mission / Financial Axis
- 57. 3. Theory of Change Model 1. What’s your mission? 2. What assumptions are you making?
- 58. Theory of Change: Mission and Vision - Mission: present tense - Vision: future tense - Collaborative effort to develop both - Trust your gut instinct!
- 59. Awamaki’s mission “Awamaki collaborates with the greater Ollantaytambo community to create economic opportunities and improve social well-being.”
- 60. Awamaki’s vision The members of the cooperatives we work with… … will obtain stronger economic foundations through access to new economic markets. … will obtain personal development skills leading to enhanced social well-being. … will gain the skills to manage their own
- 61. Theory of Change: Assumptions - Ground these in your research. - Thoroughly understand the problem! - Be transparent about your assumptions.
- 65. Theory of Change INPUTS ACTIVITIES OUTPUTS OUTCOMES IMPACT
- 66. Theory of Change INPUTS What resources do you have? ACTIVITIES What projects do you run? OUTPUTS What are the measurable indicators of those projects? OUTCOMES What is the result of the projects you run? IMPACT What is your impact?
- 67. Theory of Change: Awamaki INPUTS Staff Volunteers Donations Grants Sales Income ACTIVITIES Skills-based workshops Technical training Teacher training Access to market Homestays for volunteers
- 68. Theory of Change: Awamaki OUTPUTS Improved quality of weavings Homestays providing good service Women trained as Spanish teachers Volunteers do meaningful work OUTCOMES Increased income for women Skilled workforce Entry into the formal market Change volunteers’ perspectives
- 69. Theory of Change: Awamaki IMPACT Improve social well-being for women/families Access to economic opportunities Higher level of formal education obtained Volunteers go on to change the world!
- 70. Useful Resources: - Sheffield Social Enterprise Network: newsletter - Union St: coworking and networking - School for Social Entrepreneurs: newsletter - The Guardian Social Enterprise: sector stories - UnLtd: support, funding, resources - Social Enterprise UK: national body for socents
Editor's Notes
- Social Enterprises are businesses that are trading for social and environmental purposes.
- Why are you interested in social enterprises? Do you think you’d like to work for a social enterprise one day? Or set one up? What social enterprises have you heard about Discuss in a group. Present something interesting that someone in your group said.
- Small/Local to Sheffield: Foodcycle Sheffield Large/National: Cancer Research UK, RSPCA. Donations, legacies, high value donors, fundraising etc. Point to make: There’s probably always going to be a need for charities, so long as we have a govt that is cutting services and benefits to those in need. There are always certain sectors of society who need help and assistance, and a trading model is not always appropriate or applicable in many cases.
- receive donations (food and money) established partnerships with local supermarkets for out of date food rely on volunteers to run the weekly lunches run fundraisers such as a cycle ride this month
- receive monetary donations (high value donors and individuals, standing orders) receive donations of clothing and household objects that are then sold in their shops fundraising: 10K race rely on volunteers to run the shops, run events, fundraise, work in their offices
- Designed to be win-win. Companies can make often substantial savings by being more environmentally friendly / can increase their PR by being socially responsible etc.
- Coca Cola: partners with WWF, launched “Water+” initiative to conserve freshwater reserves and improve their own water efficiency in manufacturing operations. However… in Northern India: ordered to shut down a factory there because it was extracting too much groundwater, leading to a severe lack of water for agricultural and household use.
- M&S want to become the world’s most sustainable retailer by 2020 Partnerships with major charities such as Oxfam, WWF, MacMillan Cancer Research, and Shelter Reducing waste: Since 2012 M&S have sent zero waste to landfill through their recycling programmes, including the residue from their incinerators which is recycled into materials for the construction industry. They have won multiple awards for their work. As a major retailer it’s commendable that they recognise their responsibility in this area.
- Coca Cola: partners with WWF, launched “Water+” initiative to conserve freshwater reserves and improve their own water efficiency in manufacturing operations. However… in 2014, in Northern India: ordered to shut down a factory there because it was extracting too much groundwater, leading to a severe lack of water for agricultural and household use. Here, the CSR programme is in conflict with Cocacola as a company and therefore is ultimately unsustainable.
- A social enterprise is an organisation that trades for the purposes of social or environmental impact. In other words, it has a product or a service that it trades and it earns income and then it reinvests that income for a social or environmental purpose.
- Social enterprises should: Have a clear social and/or environmental mission set out in their governing documents Generate the majority of their income through trade Reinvest the majority of their profits Be autonomous of state Be majority controlled in the interests of the social mission Be accountable and transparent Social Enterprise UK
- Problems that are not addressed by governments because they require a long view and lots of money e.g. integrating indigenous Peruvians into the local (formal) market requires overcoming language and cultural barriers. No govt is in power long enough to see that through to completion (e.g. through skills-based training and language instruction). Problems that businesses cannot easily ‘profit’ from… E.g.
- For example, in rural communities throughout Latin America, families use wood-burning stoves in small adobe houses with little to no ventilation. Smoke inhalation causes over 10K deaths in Latin America. Some schemes to distribute clean-burning stoves are met with resistance - it requires a shift in mindset after generations of cooking in the same way, and people are reluctant to pay for something that up until now has been free (gas vs wood) GenteGas, a social enterprise in Guatemala, works to distribute clean-burning stoves. GenteGas trains women entrepreneurs to sell the clean-burning stoves
- Embrace - a portable incubator for premature babies and newborn babies that needs no electricity or expensive equipment. New product in a new market - no precedent for how to set the price.
- This is an obvious one in the developing world, but it’s equally applicable in deprived areas of Sheffield: poor transport links, few community centres, etc
- working in indigenous rural communities: lack of infrastructure was a huge problem terrible internet (anticipated 300 users throughout the whole sacred valley), frequent power cuts, water would be cut in the rainy season, roads became impassable, landslides...
- IDEO and Acumen run an online course in HCD FOUR STAGES
- Think about who is impacted by the current problem / solution Tap into your personal network Ask people about their lives (cust dev). Keep it informal. Past / Specific
- e.g. say you want to start a social enterprise that promotes healthy eating in deprived communities. First thing to do would be to go and speak to people who you believe are affected, but also speak to people who do eat healthily… find out their motivations.
- Approach local govt, NGOs, universities Can be more formal Read the internet! Find the books and articles that will help you.
- recommended books, local councillors, other charities, businesses, support services, Sheffield uni...
- Spend time with the people affected by the problem / solution Understand how they lead their lives. Shadow them for a day or two if possible. Visit the places they visit. Make sure you record what you observe.
- e.g. say you want to set up a social enterprise that helps the long-term unemployed re-enter the workforce. The ideal would be to shadow someone in that position for a while to understand their position. For example, do they lack confidence? skills? do they know where to look for work opportunities? etc
- The idea behind analogous inspiration is to enable you to take inspiration from one area and apply it to a different context.
- For example, a team of designers who were looking to help surgeons deal with complex processes looked at car racing pit crews to understand how they optimise their workflow for safety, efficiency, and speed.
- THREE THINGS TO UNDERSTAND THE SOLUTION
- startup costs and ongoing costs. Location, people, operating costs, equipment, training etc. A lot of social enterprises turn to grants or loans to cover their startup costs, especially if this involves a significant outlay such as purchasing equipment. Freedom Bakery: startup costs: bread-making equipment, kitting out a shop front, learning how to make bread and how to teach others. ongoing costs: operations, electricity, gas, internet, rent, pay a trainer, ingredients etc
- Super important!! By definition a social enterprise ought to cover its costs through revenue, or as much as possible. What products or services are you going to sell? Freedom Bakery: selling bread! wholesale? retail? making sandwiches? delivering lunches? a myriad of ways… Freedom Bakery also have shareholders: They reinvest 65% of their profits and pay the rest out to shareholders as dividends. Cross-subsidisation (sales): BUEN POWER PERU Cross-subsidisation (operations / programmes): AWAMAKI
- ex-offenders. how will they reach them? convince them to join the programme?
- Ex-offenders will have to commit to a regular schedule and be motivated to work and earn a living.
- (From Social Enterprise UK) 1. Helping you better understand, and target, your social work Detailed information about the impact your time and investment is having upon your social goals will greatly improve your ability to put your precious resources to best use. Social impact assessment helps organisations to plan better, implement more effectively, and successfully bring initiatives to scale. For instance, you can target activities that prove to be particularly beneficial, or identify and evaluate areas where your investment is not showing the return you expected. 2. Attracting investors and retaining investor confidence Social investment has generated great hopes among many investors, but it is going to have to demonstrate measurable returns, comparable to financial yardsticks, if it is to retain investor confidence. If social investment is to become as important as financial return, the measurement of social impact must be comparably easy to understand and communicate. 3. Tendering for public sector contracts or selling goods and services Social enterprises must be able to advertise their business in a way that is quickly and easily intelligible to public service commissioners and consumers alike. This is especially important following the passing of the Social Value Act, as information about social impact provides substance and strength to contract bids, informing commissioners and partners of the added or increased benefits of social enterprise. SVA: Public bodies must consider social and environmental concerns when it comes to procurement. “So if charity Y can demonstrate that it can not only deliver efficiency but add value, for example by offering apprenticeships to local unemployed youngsters, it may win the contract, even though rival X, submitted a much lower-cost bid.”
- (From Social Enterprise UK) 1. Helping you better understand, and target, your social work Detailed information about the impact your time and investment is having upon your social goals will greatly improve your ability to put your precious resources to best use. Social impact assessment helps organisations to plan better, implement more effectively, and successfully bring initiatives to scale. For instance, you can target activities that prove to be particularly beneficial, or identify and evaluate areas where your investment is not showing the return you expected. 2. Attracting investors and retaining investor confidence Social investment has generated great hopes among many investors, but it is going to have to demonstrate measurable returns, comparable to financial yardsticks, if it is to retain investor confidence. If social investment is to become as important as financial return, the measurement of social impact must be comparably easy to understand and communicate. 3. Tendering for public sector contracts or selling goods and services Social enterprises must be able to advertise their business in a way that is quickly and easily intelligible to public service commissioners and consumers alike. This is especially important following the passing of the Social Value Act, as information about social impact provides substance and strength to contract bids, informing commissioners and partners of the added or increased benefits of social enterprise. SVA: Public bodies must consider social and environmental concerns when it comes to procurement. “So if charity Y can demonstrate that it can not only deliver efficiency but add value, for example by offering apprenticeships to local unemployed youngsters, it may win the contract, even though rival X, submitted a much lower-cost bid.”
- (From Social Enterprise UK) 1. Helping you better understand, and target, your social work Detailed information about the impact your time and investment is having upon your social goals will greatly improve your ability to put your precious resources to best use. Social impact assessment helps organisations to plan better, implement more effectively, and successfully bring initiatives to scale. For instance, you can target activities that prove to be particularly beneficial, or identify and evaluate areas where your investment is not showing the return you expected.
- (From Social Enterprise UK) 2. Attracting investors and retaining investor confidence Social investment has generated great hopes among many investors, but it is going to have to demonstrate measurable returns, comparable to financial yardsticks, if it is to retain investor confidence. If social investment is to become as important as financial return, the measurement of social impact must be comparably easy to understand and communicate.
- (From Social Enterprise UK) 3. Tendering for public sector contracts or selling goods and services Social enterprises must be able to advertise their business in a way that is quickly and easily intelligible to public service commissioners and consumers alike. This is especially important following the passing of the Social Value Act, as information about social impact provides substance and strength to contract bids, informing commissioners and partners of the added or increased benefits of social enterprise. SVA: Public bodies must consider social and environmental concerns when it comes to procurement. “So if charity Y can demonstrate that it can not only deliver efficiency but add value, for example by offering apprenticeships to local unemployed youngsters, it may win the contract, even though rival X, submitted a much lower-cost bid.”
- Resources in social enterprises will always be tight – and it is the duty of the social entrepreneur to make sure that every drop of resource has the greatest possible impact. Starting with a robust and honest impact assessment framework is essential. We’ll go through the first two examples briefly and the third one in more detail.
- A ratio that states how much social value (in £) is created for every £1 of investment. Involves assigning a monetary value to an social outcome, for example: how much money the taxpayer saves for every ex-offender who is now in work (Freedom Bakery) Governments and local councils in particular respond well to SROI: useful for look for grants.
- Mission: Your raison d’etre. Grounded in passion. Reminder: a mission statement (present tense) should answer the following: Who we are, What we do, Who we do it for, How we do it, What value do we bring Vision: How do you want the world to look in 5 / 10 years time because of your organisation?
- “Awamaki envisions that the communities of the Sacred Valley have access to education and training in order to benefit from the opportunities provided by globalization and the expanding tourism market in an economically and environmentally sustainable way. In particular, we aim to promote social inclusion by working with women and low-income families and other marginalized groups. Awamaki envisions productive and thoughtful collaboration between local and international communities in order to foster positive, sustainable development. The members of the cooperatives that we work with will obtain stronger economic foundations through access to new economic markets, locally, nationally, and internationally. They will obtain personal development skills leading to an enhanced social well-being for their families, whilst revaluing and conserving their traditions and customs. We envision that the women we work with will gain skills to increasingly manage their own cooperatives, as well as influence the direction of Awamaki. Visitors will engage in transformative experiences through volunteering and tourism initiatives that sustain local economies and promote the region’s unique cultural landscape. We envision acting as a leader among a thriving and well-coordinated group of local community based organisations serving the public.”
- USAID infographic Educating women and providing them with access to market will lead to higher incomes, which in turn leads to increase social well-being.
- Department for International Development (UK) infographic
- UN infographic
- The impact that we hope to achieve is related to our assumptions: that income and education in the hands of women will enable them to improve their family’s wellbeing and that of their communities.
- Inputs → Activities → Outputs → Outcomes → Impact
- Your activities are the projects and programmes that your socent offers, usually a mix of revenue generating and not.
- OUTPUTS: can measure these!! how many spanish classes, how many students etc. Track over time.
- This relates back to our Theory that providing income and education and skills-based training for women will ultimately improve their livelihoods.