Soul Economy

Growing world issues combined with limited government funding to address these and the number of super wealthy wanting to “give back” on the rise, has lead to an increasing focus on “social entrepreneurship”. What does this term mean? There is much discussion on the definition of “social entrepreneurship”, “social entrepreneurs” and “social enterprises” and many descriptions to choose from.

There are a few definitions I like including the one developed by the Institute for Social Entrepreneurs in that it is the art of “simultaneously pursuing both a financial and a social return on investment (the double bottom line)”, by Ashoka — “Are individuals with innovative solutions to society’s most pressing social problems” — and by the Skoll Foundation — “Are pioneers of innovation that benefit humanity.”

So what is the history and how does Australia compare to other parts of the world in terms of “social entrepreneurship” activities? A survey of 130 social entrepreneurs by SustainAbility and The Skoll Foundation indicated that the field is growing but still relatively small with less than $200 million going into social enterprises worldwide compared with $2 billion into cleantech in the US and EU and over $200 billion into philanthropy in the US.

There are many outstanding examples of social entrepreneurs all over the world. Two outstanding examples which began more than 30 years ago are Muhammad Yunus from Bangladesh who established the Grameen Bank, the first micro-lending institution in the world, and Ela Bhatt from India who formed the Self-Employed Women’s Association, the first union in the world organise and empower the poor and self-employed. While there are many examples available I was particularly inspired by the personal and in-depth profiles of those individuals featured in the Charles and Elizabeth Handy book, “The New Philanthropists”.

As we often make comparisons between Australia and other Western societies, I have decided to look at the history and progression of “social entrepreneurship” and “social enterprises” in the USA and UK. So where did it all start? What is the current status quo? The report by Cynthia Gair, “If the Shoe Fits” argues it began with Europe’s social’s guilds which existed in the 9th through to the 16th centuries. They served to meet a mix of commercial and social objectives. This was followed by the growth of “friendly societies” in England in the 18th century. Co-operatives then developed in the 18th and 19th centuries and these structures, which are used to address a business and mission purpose, still exist today in many countries including the US and UK.

United Kingdom

In the UK, social enterprises began with the establishment of a co-operative by a group of weavers in 1844 (Jo Barraket, Community and Social Enterprise: What Role for Government”). Continued development and growth of co-operatives in the UK continues today as one type of social enterprise structure. There is strong central government support for the development of social enterprises through regulation, technical assistance and funding. These social enterprises have been instrumental in reforming public services and supporting communities in the UK.

This strong government support is further emphasized the Prime Minister, Gordon Brown, announcing in July a major role for social enterprise as part of the Third Sector Review. A social enterprise ambassadors program has been established with 10 celebrity ambassadors and a further 20 social entrepreneurs to join the program. This 3 year program is designed to encourage people to get involved in business with a social mission.

The importance of social entrepreneurs and enterprises in the UK is evident with organisations such as The School of Social Entrepreneurs that “exists to provide training and opportunities to enable people to use their creative and entrepreneurial abilities more fully for social benefit. We also want to recruit more innovative and capable people into voluntary and other organisations”; Social Enterprise London is “an agent for change. We work with individuals, enterprises, organisations and government to make social enterprise happen”; and the Social Enterprise Coalition “the UK’s national body for social enterprise.” In fact, the Social Enterprise Coalition holds an annual Social Enterprise Day to showcase the work of social enterprises over the UK.

The profile of social entrepreneurs in UK has certainly achieved a boost recently with Bebo, the UK’s leading online social network and UnLtd, the Foundation for Social Entrepreneurs announcing a major partnership. “Each month a panel of experts from UnLtd and Bebo will select five Bebo users’ projects that have the potential to make a positive impact on society. The project that receives the most votes will receive a £1,000 award, as well as ongoing support and advice from UnLtd to help it on its way.”

United States

There has been growing interest in social entrepreneurship in the US since the early 1990s. It has been driven by individual and corporate philanthropy and entrepreneurship, and supported by universities and business schools. With reduced government funding for non-profits, there is a need for these not-for-profits to achieve self-sufficiency as well as the need to encourage individual and innovative social entrepreneurs to address issues. In particular, issues within the US such as the poorer communities (which became even more evident with the coverage of Hurricane Katrina). The support provided by government has been more indirect through initiatives such as the creation of the Community Development Financial Institutions Fund (the CDFI Fund) in 1994, with the vision of “an America in which all people have access to affordable credit, capital and financial services” and the New Markets Tax Credit (NMTC) Program which provides an “allocation of tax credits to community development entities (CDEs) to enable them to attract investment from the private-sector and reinvest these amounts in low-income communities.”

The importance and entrepreneurial nature of social entrepreneurs in the US is reflected in organisations such as the Institute for Social Entrepreneurs to “provide seminars, workshops and consulting services for social entrepreneurs in the United States and around the world”; the Social Enterprise Alliance “to build stronger, more effective nonprofit organizations by mobilizing a community of practitioners and investors to advance earned income strategies”; and organisations to support social entrepreneurs such as the Skoll Foundation and Social Edge (established by Jeff Skoll one of the founders of eBay) and Ashoka.

Australia

In Australia, social entrepreneurship began more than 60 years ago in the form of charitable organizations becoming involved in production and retail in an effort to support funding and employment (Jo Barraket, Community and Social Enterprise: What Role for Government”). While there has been little research undertaken on social entrepreneurship and social enterprises, discussion on the topic began in the late 1990s including a debate about their structure and priorities. Not long after this, the Social Entrepreneurs Network started in 2001 but was wound up in 2003. In 2002, Social Ventures Australia was established to “align the interests of investors with the needs of social entrepreneurs to create sustainable, meaningful change to challenging social issues” and it is still in operation today. And in 2003, a report was written by Peter Botsman for a Federal Government department on “Pathways to the Enterprise State” and the benefits of social enterprises. More recently the Social Economy Executive Education Network (SEEEN) was formed to “develop not-for-profit management and leadership capability through quality education”. And in February 2008, the Australian Social Innovation Exchange (ASIX) was launched as part of a worldwide initiative to create a network of organisations to help build  social innovation.

Government support of social enterprises in Australia has been indirect and achieved through funding, research and partnerships. Even so, social entrepreneurs and social enterprises have developed. One outstanding example is Jeff Gambin who established the Just Enough Faith Foundation to feed the homeless in Sydney.

The current Australian Government has a social inclusion policy agenda to improve the economic and social circumstances of disadvantaged communities. As part of this, the Australian Social Inclusion Board has been formed with leaders from around the country and a Social Inclusion Unit has been established in Department of the Prime Minister and Cabinet.

In February 2008, The Centre for Social Impact (CSI) was launched – a partnership between Swinburne University of Technology, the University of NSW and the University of Melbourne to deliver management education and research for the not-for profit sector. “CSI has a profoundly important mission: to educate tomorrow’s social entrepreneurs and strengthen today’s social enterprises” (Source: http://www.csi.edu.au/). The School for Social Entrepreneurs (SSE) Australia also launched its school in Sydney this year. The SSE in the UK has been running for 10 years. “The goal of SSE Australia is to assist social entrepreneurs in transforming their talent and drive into real social outcomes” (Source: http://www.sse.org.uk/).

With an increasing focus worldwide on the need to address social and environmental issues, I expect social entrepreneurship in Australia will continue to grow and will gain momentum.

Image by http://www.ashoka.org/

Popularity: 1% [?]