Learnings from the Social Enterprise World Forum 2017 #SEWF2017

Last week, along with 1,600 other delegates I attended the 9th annual Social Enterprise World Forum, which this year was held in Christchurch, New Zealand, proudly declared by the City’s Mayor as “the people’s republic of Christchurch”.

It’s a city rebuilding after two terrible earthquakes in 2010 and 2011 which decimated much of the city centre killing 185 people and injuring several thousand. According to today’s edition of the local paper The Press, 1 in 6 Christchurch residents have sought mental health assistance since 2011 as a result of trauma and loss associated with the earthquakes.

Here’s a summary of what I learned from SEWF2017 hosted in a city still rebuilding, and activating amazing community development, social enterprise, and environmental innovation. As expected SEWF2017 had high level international speakers and fellow delegates including Royston Braganza CEO of Grameen Capital; Andrea Chen ED of Propeller, New Orleans; Dr Mairi Mackay Head of the British Council’s Global Social Enterprise Council, and Australia’s very own fabulous Professor Jo Barraket of the Centre for Social Impact at Swinburne University.

At the opening ceremony I was not the only Australian thoroughly moved by hearing each and every opening address using Maori language and embracing culture. Maori culture was interwoven throughout the forum and was integral to its success. I was personally shamed by the way many non indigenous Australians treat Aboriginal and Torres Strait Islander culture. Even the theme for SEWF 2017, “Ka koroki te manu – Creating our tomorrow”, references Maori language and culture in the belief that the first birdsong of the day welcomes the potential of tomorrow.

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Much of what I heard over the last three days echoed my own thoughts, which I have laid out before in this blog, however it’s good to know that I’m not alone and that there are many with shared views about power and competition.

A feature of one main plenary session was a call for collaboration over competition, and the recognition that neo liberals espouse competition along with privatisation as a golden ticket to better service at a better price. However experience has not borne this out, and we in the social economy need not copy the dominant economic paradigm in a misguided effort to gain approval from mainstream corporations and consultants. Collaboration and by extension collectivisim are hallmarks of a progressive way forward in business and towards a better world.

MJ Kaplan of Loomio reminded the forum that as a practitioner/social entrepreneur you must have a power analysis, and seek to address structural inequalities. According to the Hon. Alfred Ngaro the Minister for Pacific Peoples (and apparently the George Clooney of the Pacific – for he is handsome!), who opened the forum, social enterprise in New Zealand is about ‘putting power into the hands of the people’.

Practicing social enterprise after all is a political act. An act which should put people at the centre of power. There are many people doing great work in the sector, who are doing this work because they want to help people. But unless we bring an awareness of power, structural inequalities and racism; and how people at the top use power in insidious ways to keep the status quo operating in their favour we will never create lasting change.

David Le Page, a legend of the world social enterprise movement asked the forum to remember where we have come from, acknowledge and learn from our heritage of cooperatives and mutualism.

Mark Latham in kinder times wrote about mutualism and reciprocity as part of the much vaunted 1990’s ‘third way’. He talked about flatter structures and the need for dispersal of power: “Hierarchies concentrate knowledge and authority at the top of the administrative pecking order. Know-how only ever passes downwards. Networks by contrast flatten out this pecking order and establish mutual relationships of trust, negotiation, and reciprocity.”

When we launched Australia’s only peak body in the sector, the Queensland Social Enterprise Council (QSEC) in 2012, we did so with a power analysis front and centre; with reciprocity and mutualism as a guiding force. We wanted to take back the social enterprise narrative from intermediaries who were not representative of the hundreds of emerging social enterprises in Queensland; and we wanted to, as a new Maori friend at the forum told me his people have always done, ‘put people at the centre of decision making’. QSEC has a democratically board of social entrepreneurs, and is a member driven network of over 100 social enterprises, which seeks to do just that.

The forum made me reflect on what it means to be ethical not only in your business practice, but in all parts of life, and the difficulty of the path we follow. Tom Dawkins of Start Some Good, the Australian crowdfunding platform , caused some ripples with comments on the SEWF chat app about plastic bottle use during Thank You Water’s presentation highlighting the paradox of positively contributing to a social problem while negatively contributing to an environmental one.

On environmental care its good to note that the recycling and upcycling at the event was fantastic, for example even the drinks tokens given to delegates were simply offcuts of rubber used in a manufacturing process. And, the whole event was designed to be carbon positive.

Finally, Royston Braganza from Grameen Capital urged us to ‘drop the ego’. Our sector is no different to other sectors, ego is a human condition and there will always be some people who seek to undermine others and movements in a quest for their own power. I think its also important to talk about being compassionate to yourself and others here. We too often are critical of others efforts and as Peter Holbrook reminded us “small acts, when multiplied by millions of people, can transform the world”.

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To sum up, SEWF 2017 confirmed my love of social enterprise and validated my beliefs that essentially we need to develop better analyses of power, address structural inequality and racism, put people at the centre of decision making, and for all of us to drop our egos.

I was at the forum courtesy of my employer Marist180, a non-profit working in Western Sydney and with offices in Brisbane and Melbourne, for whom I manage Social Innovation and Entrepreneurship. Marist180 were contributors to the bursary fund which enabled 63 Australians to attend who may not otherwise have had the opportunity.

 

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Social Enterprise of the Year – a reflection

It was 2 years ago this week that the social enterprise I was Director of, SEED, won the small Social Enterprise of the Year award. It was a mighty achievement for a community based enterprise to win this national award alongside some wonderful colleagues making a difference through business such as Thank You Group, 40K, and Cleanforce.

The award gave SEED a lot of media coverage (I swooned quietly while beinginterviewed by Natasha Mitchell on Radio National’s Life Matters), and t gave SEED a position as leaders in Australian social enterprise, however as with any business venture there’s a rollercoaster ride of winning and losing major contracts. The award, prestigious as it is, did not guarantee an income stream or buffer the enterprise from the forces of the market.

I’m reminded with two years hindsight that the journey to 2014 was a long one, driven by SANDBAG, SEED’s parent NFP, and starting with building micro enterprises using community development frameworks; listening deeply to people experiencing disadvantage and long term unemployment, and working with them, not for them, to create businesses that could start to address some of their self identified problems.

The ten plus years journey to SEED winning the national award was filled with teamwork, collaboration, and support. Over those years, SANDBAG was led by Susan Black, and then Maggie Shambrook, both of whom supported my role building the enterprise as a functional business, while driving home the importance of grassroots, participatory work. At least 70 staff worked for SEED, with some still there after many years, and many going on to other employment.

We were fortunate to be supported by the wonderful Westpac Foundation, Ian Potter,SVA via the Federal Government’s Job Fund, and Qld State Government’s Department of Communities.

Those ten years also saw the sector in Queensland develop and mature, with the Queensland Social Enterprise Council becoming the only peak for the sector in Australia. And, a special mention to David Brookes and Mark Daniels at Social Traders for the vision of a National Social Enterprise Awards and their incredible work and tenacity in social procurement development, which undoubtedly helped SEED win contracts with Brisbane City Council, and the State Government’s Economic Development Queensland who instinctively ‘got’ that by buying services from a social enterprise they would also be contributing to a better society.

I have since moved on from SEED and am using the failures and learnings (aka flearnings) gained over five + years running a social enterprise to develop innovative solutions to social problems with Marist Youth Care. Some of our innovations include creating employment for disadvantaged youth via a traditional start-up social enterprise in the trades; and a suite of innovation and entrepreneurship programs.

I can’t wait to see who wins the 2016 awards and I’m sure I’ll be there in Melbourne at the ceremony celebrating doing business with a difference and cheering on the finalists!

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A return to Mutualism for Social Enterprise

This gallery contains 4 photos.

Social entrepreneurs have traditionally worked like this, creating mutual networks, using open source models, and working together collectively when called for. This is why and how NMG was formed, and then morphed into QSEC. Continue reading

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New Business Models in the Not for Profit Sector

There’s more consultants than you can shake a stick at in Not for Profit (NFP) sector telling us that we need to diversify our income streams, build new models, and drool over Social Impact Bonds (SIB’s).

There’s a couple of concerning issues arising from this; 1. the narrative that NFP’s are inefficient, and can’t manage their budgets or run businesses. 2. the resultant marketization of the sector, enabling government’s to divest themselves of the long held social contract that they should redistribute wealth through taxation to fund social services.

To do away with the first myth; NFP’s in Queensland run budgets of a few thousand dollars to over a Billion dollars (Uniting Care Qld and Goodstart Childcare). I have worked in the sector for 20 years in variety of roles from support worker to Director level, and I know that the skill and tenacity of most NFP CFO’s and CEO’s regularly surprise and outstrip those in the private and government sector.

The argument that the sector must diversify it’s income is driven by government’s who claim that their own budgets (read the money they look after for citizens) are in deficit, and so we must find new ways of raising money to spend on social services.

 

The consultants and intermediaries driving these changes are often corporate refugees, who fed up with working without a higher purpose bring their considerable skills to bear in the NFP sector; but ultimately have no idea of what it’s like to work with the poor, on the ground, day in day out, bearing witness to extraordinary equity discrepancies that exist in modern Australia. Lived experience is a pretty good starting point to design innovative ways of funding the things that actually work, redress inequity and create impact.

The marketization of the sector is best exlempified by the obsession with SIB’s and Payment by Outcomes. However, as mentioned I share the

“philosophical” critiques regarding the implications of introducing private for-profit capital into the social services arena as “an abrogation of government’s responsibilities to address social problems.” (1).

We are opening up the social sector to flawed business business models. A huge investor in SIB’s in America is Goldman Sachs – yep, the very same bank that was accused of triggering the GFC by ‘misleading markets’, ‘manipulating clients’, and operating a ‘culture of greed’. (2).

Are these the sort of investors we want in the NFP space? They have even managed to wangle a potential 87.5% return on a SIB in the States by insuring and minimizing their risk through Bloomberg Philanthropies (1).

It’s strange that in the current paradigm where government and philanthropics are rightly obsessed with measuring outcomes, there has been very little evidence that SIB’s actually work. According to a Brookings Institute report as at 1 March 2015, there were only 38 SIBs in existence worldwide, with very little evidence of their efficacy.

This type of funding ignores developmental ways of working with people; community development work is essential to community capacity building and assists often the most marginalised to have a voice. It is a method that works alongside people and not for them, it is an empowerment model interested in the process of change as much as the resultant outcomes; therefore making it difficult to measure using market based analysis tools. Community development is the the Slow Food Movement of the social sector.

Having run social enterprises for a decade I don’t believe that they either, are the answer for most NFPs seeking to diversify income; unless they want to diversify by loss. The sector in Australia is littered with failures of social enterprise started by organisations big and small.

A major reason is not that NFP’s don’t understand how to run budgets and business models, it’s that they have severely underestimated risk and the market for their goods or services. Even models I’ve seen tested by the so-called experts in private sector finance badly misjudge risk and cashflow.

Additionally social enterprise startups in existing NFP’s often fail because they are not driven by someone with “founder’s-desire”. A founder in any type of enterprise will generally be willing to work 80 hours a week to see their project succeed, and if they fail it’s usually their own money they have failed with.

This begs the question; what if the best learning in business is from failures? How can social entrepreneurs legitimately take risks with NFP’s money, fail, learn, take more risks, fail, learn, repeat? A private entrepreneur can do this until bankrupt if they so desire, but is it ethical to do this with public funds? What does it say about the risks for organisations’ long term viability? If NFP’s are being pushed into marketization, especially those looking at entrepreneurial solutions to their lack of funding they would do well to think long and hard about risk.

I’m all about innovation (it’s in my job title after all), and I’m desperate to see great new innovation come about in the NFP sector especially from millennials and Gen Z, but I caution against the ‘NFP model bad – market good‘ narrative. A properly funded social sector is essential to the well being of society, and funding social innovation that doesnt have to rely on a market driven fetish would go a long way to see Australia succeed in the 21st century.

1 https://nonprofitquarterly.org/2014/06/12/eight-sobering-thoughts-for-social-impact-bond-supporters/
2 http://www.abc.net.au/worldtoday/content/2011/s3191452.htm

Postscript Social Innovation Definition from Open Conversation

Social innovation is about tapping into the ingenuity of charities, associations and social entrepreneurs to find new ways of meeting social needs which are not adequately met by the market or the public sector. It can help bring about the behavioural changes needed to tackle the major societal challenges, such as climate change. Social innovations empower people and create new social relationships and models of collaboration. They are thus innovative in themselves and good for society’s capacity to innovate. (European Commission Innovation Union, 2010)

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Four Elements of Social Enterprise for Structural Change

Social enterprise can contribute to positive economic, structural change by modelling a new way of doing business; and I believe there’s four elements they must be practicing as part of a new model.

Social enterprise and charity generally exist to address the results of inequality and disadvantage; feeding the poor, educating the disenfranchised, employing the unemployable. Where social enterprise differs from charity is by modelling a new way of doing business, a model that creates equity, a model for people and not solely for profits.

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The Four Elements which I think are essential for social enterprise to create a fairer society through business are:

The Business model – A social enterprise must trade for a social, cultural, or envirnomental purpose (without a viable business model a social enterprise is a charity).

Openess and Transparency – In order to be exemplars of the sharing economy, social enterprises should be as open source as possible. Food Connect have been doing this for a decade, sharing software, knowledge, and skills freely to be a driver in the Fair Food movement in Australia.

Social enterprises should extend this openess to their financial modelling; showing people how they make money, where it gets spent, and what their profits (or not) are. Fear of showing up failure is understandable; but failure is our greatest lesson. By showing the world how we make or lose money, and where we spend it, we liberate ourselves from the tyranny of “keeping up appearances” associated with conventional (and some social) enterprises, who maintain secrecy in order to appear successful. I’m not advocating for a detailed PnL to be published every month, but at least a high level (and honest) overview would be a good start.

Outcome and Impacts – A social enterprise must be creating positive social outcomes and impacts, be measuring them, and then publishing them just as it should be publishing its financials. There are so many tools on offer to do this, social entrepreneurs just need to make the decsion to start measuring today.

The Structural Change – Is two fold:
1. Social enterprises should have a high level analyis of the structural issues causing the problems they exist to address. Without understanding that Trickle Down has failed, or why Arundhati Roy says Gush Up is creating massive wealth disparity, it’s difficult to move forward to create a fairer world; we’ll just keep operating in the same paradigm.

2. Social enterprises should be modelling a new world of doing business which runs counter to everything we have been taught about business; about competition, scale, and the profit motive.

The new world of busines needs to be acting collectivley and collaborating (that’s why we set up the Queensland Social Enterprise Council – so we had a collective voice); and there are already great examples of this in practice such as worker-owned coops, B-Corps, and enterprises creating foundations for profit distribution into ‘for-good’ work.

The way we will create great change is through educating ourselves as practioners about the dynamics of economic power, and creating demonstrable ways of doing business in a new paradigm. If not, we may as well be placing band-aids over the open wound of disadvantage.

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Why are definitions of social enterprise important?

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Here’s a quick blog post I wrote on LinkedIn:

Why are definitions of social enterprise important? Why am I still interested in this debate ten years on from running my first social enterprise? These are the questions I asked myself this week as I pondered the importance of keeping a tight definition in the wake of social enterprise being highly represented in the Australian of the Year awards across categories, and raising the profile nationally.

As a practitioner of more than a decade’s experience in social and private business; and as someone who has helped shape the sector, and frame the debate in Queensland alongside many wonderful colleagues, I care deeply.

For me the importance of a tighter definition and a deeper conceptualisation lies in legitimacy; for customers of social enterprise, for practitioners, and for future social entrepreneurs. There may always be grey areas, and in truth social entrepreneurs operate across the continuum of social enterprise and social innovation, across a spectrum of social entrepreneurship.

The necessity of a continued debate is a ‘time thing’ due not only to the recent Australian of the Year Awards, but also because the sector is still immature and without a widely acknowledged narrative. The main problem I see is when organisations relying on charity to operate and with no apparent business model (that includes trade) are called social enterprise. They may be social, and they may be innovative, and they may create wonderful feel good outcomes for people in need; and they may even be driven by social entrepreneurs, but they are not social enterprises.

This article by Social Good Stuff ably demonstrates that in order to be a Social Enterprise, you need to trade, and not rely wholly on grants and donations to survive. If you’ve got no trade, you’re all social and no enterprise.

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Social Impact Data

At the social enterprise I lead we measure our social impact in a number of ways including some good old fashioned number crunching. Did you know that between July 2010 and July 2015 SEED employed 67 people, 47 (70%) of whom have been long term unemployed and/or marginalized from mainstream employment; during that time we earned almost $2Million in income from trade; paid $780,000 to, and created over 32,500 hours of employment for people who had previously been long term unemployed and/or marginalized. During this time SEED facilitated payments of $191,600 in PAYG tax to the federal government.

Many of our employees from a long term unemployed and/or marginalized may not have been employed elsewhere due to, in some cases mental illness, addictions, or disabilities. The above data shows that social enterprises create real economic and social value in the communities in which they operate, and for the state and federal governments. 

It is vital that social enterprises are able to articulate their outcomes through good use of data. And, its not just hard, quantitative employment data. At SEED we have also measured our social impacts via a 2011 Social Return on Investment (SROI), a 2013 Social Impact Assessment (SIA), and as it’s now 2015 and we committed to bi-annual reporting, we have just completed a new SIA and are awaiting the final report from the University of Queensland’s Masters in Development Practice course.

  I look forward to sharing more results and stories when they come in.

‪#‎socialEnterprisePays‬ ‪#‎socialEnterpriseWorks‬SEED SOCIMP 2010-2015 FY

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