Social Enterprises – Fad Or Fact Of The New World

Social enterprises have become trendy
and almost every donor, investor and entrepreneur’s favorite. Many
believe these enterprises are the answer to every developing
country’s myriad socio-economic woes. Quite a few disagree and feel
that there is undue hype over what’s essentially old wine in a new
and attractively packaged bottle! 

The economy of a country can be
assisted when more jobs are created so I personally feel that we
don’t need to define enterprises into separate categories of social
enterprise and non social enterprise. Both should be creating
opportunities for employment and this in itself filters down directly
or indirectly to a wider population. By thinking of social endeavors
as nonprofit companies it may shackle the whole thinking of growth.
Without profit one can not necessarily set aside enough for capital
expenditure and research and development of further products or
services.

Social enterprise is not clearly defined so whilst
one could argue that a processed food company that makes expensive
foods for a high income population is not one, it could nonetheless
be implementing technology and other strategies to help farmers
increase their yield.  Similarly the law allows for a company
that provides teacher training to both high fee paying schools and
municipal schools to be set up as a section 8 company but is it a
social enterprise? My sense is that people who are entrepreneurial by
nature and have great ideas to develop products and services may not
think as ambitiously about growth if they set themselves up as a
section 8 not for profit company.

Rather than a separate
category for social enterprises there can perhaps be better tax
incentives for small companies or for those set up in very
impoverished rural areas. Social Entrepreneurs need not think that
profit is a dirty word. After all higher profits and income should
also lead to higher donations. Similarly more taxes paid on profits
mean more money available for better public infrastructure, roads,
health care facilities etc which benefits the population at every
socio economic level.

Tina Vajpeyi,Finance Consultant

(Tina Vajpeyi is qualified as a
Chartered Accountant in the United Kingdom. She has held various
roles such as is a Finance Consultant with Aangan & CAP and prior
to that she was the CFO at The Akanksha Foundation.)

 ___________

Social Enterprises can be game changers
in solving India’s social sector issues. Social enterprises create innovative
products and services to solve social problems through commercial
strategies. Social enterprises are not business operators who simply
wear a social tag. We’ve come across many founders with impeccable
track records who have started social enterprises to solve social
issues across health, energy, skills, livelihoods, water and so on.

Some great examples of social
enterprises are Aravind Eye Hospital that was setup way back in 1976,
LabourNet and Head Held High in skilling, Rural Shores for rural
BPOs, SELCO, Tara and Ecozen in energy and GRoboMac and Kamal Kisan
for agriculture.

Another important aspect that
demonstrates the sustainability of the SE movement is the evolution
of the roles of impact investors and large donors in actively
supporting SEs. Aavishkaar, Acumen, Ankur Capital, Omidyar, Unitus,
Villgro, Menterra, Michael and Susan Dell Foundation etc. are
providing early stage grants or equity and guiding SE founders to
scale up operations and service delivery.

Although many companies are interested
in partnering with SEs, we have not seen a major shift in funding
patterns when it comes to CSR. Companies prefer to fund NGOs as the
laws are still evolving with respect to SEs after the Companies Act,
2013 was introduced. Few companies that have been early movers and
have partnered with SEs for their CSR are the likes of Mphasis,
Mahindra Finance and Genpact.

Anil Misquith, Exec Director, Strategic
Initiatives, Samhita Social Ventures

(Samhita works with companies and
foundations to deliver effective corporate social responsibility
initiatives.)

                                            ___________

Avanti Foundation in collaboration with
BRM started Avanti Young Women Leadership Program in 2011. It
was conceived with the objectives of:

What started with 250 girls, has
reached 13000+ girls in 5 years. Besides building life skills among
the girls, more than 25000 citizens have been made aware about social
issues through this initiative – a kind of ripple effect!

A cooperative, non-profit, for-profit
or any other form are social enterprises as long as their objective
is doing social good.

What differentiates them from their
counterparts is that they:

Based on these differentiating factors,
the dynamics of social change and potential impact that social
enterprises can create, can’t be ignored.

More and more individuals and
organisations are looking for ways and means to make a valuable
contribution to society. Given this scenario, social enterprisess are
surely here to stay, have a say and make a way!

Akshat Singhal,Co Founder-The Blue Ribbon Movement

(The Blue Ribbon Movement (BRM) is a
hybrid social enterprise working towards building leadership for a
better world.) 

___________

 Recently, I attended an Executive
Education programme on Social Entrepreneurship at an international
business school. One of the case studies for discussion was about
marketing by the sports apparel brand, Patagonia. The discussion got
heated around the question: Is Patagonia a social enterprise, or is
it just another business, apparently, with founders with social
conscience and commitment to save the environment? The case study
quoted the founder of Patagonia saying that he believed that business
had the potential to alleviate the world’s problems and inspire
positive change. The class was divided among those who thought
Patagonia was a social enterprise and those who thought it was not
since its raison d’etre was to make profits.

In the world of impacting social
change, evidently, social enterprise and “NGO” are not binaries.
Given the scale and complexity of the problems that they both want to
address, it will take all kinds of players and approaches, playing to
their strengths and expertise to make a difference. The distinction
if at all (and there will always be exceptions) is that social
enterprise, being located within the framework of business, responds
to manifested demands and fields competition, while “NGOs” often
have to unearth latent needs and address them despite adversaries,
and not competitors in the conventional sense. Low-cost, primary,
health care and caste-based discrimination, even when it was not
considered an issue that needs intervention, are examples of both
categories. 

Being located in the business
framework, financial viability lies at the central core of
the strategy with an uncompromising focus on building replicable
models and this may come closest to being the differentiator for
social enterprise. Not coincidentally these are the two aspects that
funders and “NGOs” have locked horns on more often than any
others in the last two decades at least. Beyond that, we are all
facilitators, working in interlinked synergies, with marginalized
communities who will ultimately make that definitive change in their
situations. The effort to define one category as distinct or superior
is really futile.

Rukmini Datta,Corporate Social Responsibility, Cipla Foundation

(Cipla Foundation takes Cipla’s socially focused business legacy forward. It
mirrors Cipla’s relentless commitment to improve lives and fight
inequities on key fronts. To build accessibility and affordability,
initiatives focus on Health, Skilling, Education and Disaster
Response.)

We would love to hear your opinions. Write to us at conenct@capindia.in