Deep-Diving into Social Impact!
What is a social enterprise? Are social enterprises about making social impact? What is the difference? Can I create a social enterprise without any background? What counts as social impact?
These were some questions that led me to sign up for the Social Impact Catalyst Fellowship Programme — a six-week social impact mentorship programme with mentors from Social Impact Catalyst, Singapore’s first youth-centric organization focused on social entrepreneurship and innovation. This year’s theme is Rethinking a World Post COVID-19.
Honestly, I was not too sure if I wanted to dive into the social impact community, given that I may have had to return to the US in a few months. This fellowship programme was a great introduction to the steps to identify an addressable market, ideate on a product, build a business and consider impact measurement toolkits. We even get to present elevator pitches to our mentors at the final session!
What are Social Enterprises?
Social Enterprises (SE) are businesses that deliver value and impact. All profits from SEs are reinvested into the business. Unlike traditional for-profit businesses with charitable arms, the amount of impact that a SE can create scales with its size (more on this later). However, the act of balancing financial and impact goals is the defining feature of and the main challenge for a SE that aspires towards sustainable growth.
Why are Social Enterprises Important?
In short, there are three main reasons why social enterprises are important building blocks for society.
- Demand for sustainable solutions to care for the marginalized
- Decreasing availability of governmental and charitable funds
- Businesses for good are no longer competitive advantages but necessities
Many social challenges require constant attention which traditional charities are unable to home in on. The limited nature of government resources means that funds are often allocated towards those who are most in need of them. Finally, we’ve seen how COVID-19 has perpetuated a shift away from efficiency towards resilience for our supply chains. The same goes for our businesses, who have to future-proof themselves for long term operations.
What is Social Impact? Why does it scale?
Social Impact refers to the effect of a SE’s operations on the community and individual wellbeing. For some SEs like SDI Academy, that would be the increased literacy rate of migrant workers, or reduced accident rates due to better understanding of workplace instructions. As SEs grow, their social impact scales, as their operations are geared towards meeting certain impact goals.
What about for-profit businesses? Don’t they have charitable programmes?
True. However, profit is the main goal of traditional businesses. As a result, the market research done is primarily geared towards identifying significant return on investments. As a result, their social impact programmes are relatively ad-hoc and do not necessarily scale with their growth. Market research done by SEs, however, aims to ensure that the nature of the SE’s operations will benefit the stakeholders involved in a sustainable manner. This results in a shift in the existing equilibrium that aspires towards an optimal new condition for those disadvantaged by the current state.
Okay. How do you build a Social Enterprise?
Above is a Business Model Canvas (BMC), which outlines how an organisation creates and delivers value, along with its cost and revenue structure.
On Week 4 of the programme, Kai En shared about the BMC, explaining the operations of many SEs! I found it really useful to learn about the different lenses we could use to understand how SEs sustain themselves while providing unique value to their communities.
In particular, Kai En shared about The Maju Collective’s (TMC) Value Proposition. However, given the current COVID-19 season, does TMC need to completely rethink its value proposition? To answer that question, we went into their statement:
“Since 2019, we have worked with partners across the food value chain to strengthen collaborations within the ecosystem… [and] identify the systemic gaps and work with communities and organisations to reframe and innovate around it…”
What comes after this?
Though the fellowship programme has ended, we’ve learnt a lot about the unique elements that make up a social enterprise. I’m looking forward to hearing the thoughts of our SIC facilitators after our elevator pitches during the roundtable discussion.
I’m also actively looking to learn from the experiences of social entrepreneurs who have entered into new/unknown markets with new products, processes and solutions. If you have time, I’d love to connect with you over LinkedIn/Zoom!