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The rise of the social enterprise

Students I have met across three Australian universities are planning their careers in Social Enterprises. They are inspired by many who come before them; TOMS, Barefoot College, the Gates Foundation. A large number of entrepreneurs in Australia are also heading down this path. Seeking meaning in their work, and access to wealthy elite to fund their ideas as we as a society hit a crossroad between capital and ideas. Even senior executives are turning to foundations such as Landmark to unstick themselves from their self-created ‘rat race’.

The expected benefits of this union between capital and ideas are potentially huge. But before you jump into this space as a corporate, wealthy investor or idea generator / entrepreneur there are a few questions you must ask yourself;

1. Can I help these people by making a real and positive difference in their lives?

There are plenty of times I have spoken with well-meaning people who want to help out the Aboriginal community, build infrastructure in developing countries or address large societal issues such as mental illness. In spite of the enthusiasm, intentions and resources that have been poured in these projects, efforts have been in vain. Underestimating the situation, the culture, the politics and complexity can turn the intended venture into a bigger state of affairs.

Think of Live Aid which aimed to end famine in Ethiopia. Much of the funds went instead to the Head of State and his army without the purpose being served.

When entering a market you know little about it’s imperative to critically evaluate the required investment in time and resources prior to doing so. As part of your business plan, it is important to understand, measure and prepare for all known risks. Will you be confronting substantial cultural issues? Have you considered agency agreements and partnerships?

Social Enterprises that take the time to understand and adopt culturally-appropriate business practices will set themselves apart in a competitive new marketplace.

2. Is the enterprise getting to the heart of the issue?

Even if the government and NGO’s already in that space are deemed inefficient by enterprises, there is a wealth of knowledge and experience which cannot be ignored.

The Wake-up Project has a noble mission of spreading kindness and mindfulness. Similar to many motivational speakers in the US, the organisation brings high-profile spiritual entertainers to Australia. They speak to individual and corporate attendees for a fee. Established in 2010, we are yet to see the impact that has on society’s well-being and whether it addresses the needs of mental illness in our society.

Are they yet to make their full impact or are they not dealing with the core issue?

3. Are we here for the long haul?

There are a great number of entrepreneurs I have met that wish to provide clean drinking water to more than a billion people on earth who currently do not have access. Although it’s great that there are so many with a keen interest in this space (as it is much needed). I can’t help but wonder, how many are working within the current system to bring about change? Corporate licenses to exclusive water holes are rife in some developing nations. In spite of commitment to the cause, how did so many of these entrepreneurs suddenly close down during the recent economic crisis?

Without a sustainability plan, social enterprises can wound up raising hopes and dashing dreams when they abandon their cause so readily. Business named Water did this by giving away 100% of its profits to communities in need. Also their shareholders are people in 17 countries around the world waiting for a rig to drive into a village of hundreds people that will benefit from having clean water.

4. Are enterprises creating wealth for themselves or the community?

After all, these organisations are not operating for gratis. Backed by wealthy investors, any of which seek a return for their investment. The whole purpose of a Social Enterprise however is that the only exploitation that occurs is one of exploiting opportunities to increase social value.

Grameen Bank, established in 1983 providing poorer communities with micro credit. It has brought in $10 million. The foundation has been active in 18 countries in Africa, Asia and Europe.

There is nothing wrong (to my mind at least of making a profit from providing a much needed service in the community). The caveat I would add to that is so long as it goes to the heart of the matter, serving peoples’ needs and in their best interest. Once exploitation begins to weigh in, then the purity of the social enterprise no longer exists.

I hold high hopes for social enterprises in creating restorative futures which are sustainable and solve wicked problems providing they hold true to their pure intentions with iron clad commitment.

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This entry was posted on Thursday, June 30th, 2016 at 1:30 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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