Social enterprises hold the power to fast track economies, while supporting our communities. In a COVID-19 world, addressing both economic and social concerns at the same time is more critical than ever. Social enterprises operate at the intersection of the business and creating good in the community (or environment). The goal is to achieve a sweet medium between profit-making and social change in the communities they work in.
But, how do Social Enterprises create this change, why is the hybrid of both business and charity, better?
Help reduce reliance on charity
Social enterprises differ from charitable organizations in the way that they are funded, and the people they report to. Charitable organizations rely on outside funding to make any moves, while social enterprises source their funds from their profits. The former can be quite helpful to an acutely under-served community, but the latter is more impactful and sustainable. In the eventuality that a charity is crippled by such a move, a local business can pick up the slack since it’s beholden to nobody but the people in the community.
Main drivers of sustainable development
In April of 2019, the government of Ghana decided to embark on an ambitious journey that will see the country end reliance on aid within a generation or two. The stance was laid out in a document known as the ‘Ghana beyond Aid Charter and Strategy Document’. The entire idea is centered on re-orienting donors and well-wishers to stop seeing the country as a charity case but rather a place that needs injections of investment capital. They want to encourage the setting up of social enterprises instead of having a bunch of aid money thrown at the problem.
Sustainable revenue that is generated by such companies will bring a world of difference to communities that need investment. An investment in farming equipment and subsidization of seeds is infinitely better than the provision of food every now and then to the same community through aid.
Countries like Ghana are increasingly moving to support private sector, or market led, approaches to development. Reducing their reliance on traditional donors, and at the same time, building and strengthening their economy.
Allows other organizations to focus on their core functions
One of the greatest benefits of social enterprises is that the release funds for other organisations to focus on what they need to do.
For donors focused on supporting health activities, there is a wide range of interventions needed. Many of which don’t have commercial incentives or solutions, but are hamstrung by aspects that do. If Social Enterprises are a part of the equation, funds form the donor are able to be focused on the aspects needed most (non-commercial values), while knowing that the commercial aspects are being delivered as well.
One example would be rural eye care, where it can be difficult for a charitable organization focused on eye conditions in a rural community to focus solely on saving people’s eyesight, but the community might lack the ability to travel long distances and access the treatment. Setting up a treatment camp in such a community is great, but if the community can’t get there, it won’t have an impact. Instead, the NGO ends up allocating already stretched resources to bring the weak and elderly to the camp. However, the transport is something that a social enterprise could provide, providing a service to the community, charging for their service, while allowing the charity to focus on what it does best, eye care. Situations like this where social enterprises invest in a community’s infrastructure, make it easier for NGOs and other charities to provide essential services.
Social enterprises may not be the panacea for all of society’s ills, but they sure can be a major driver for any communities’ success.
If your organisation is looking to implement Social Enterprise models, or you are looking for support in building your social enterprise. Keprah is able to provide a range of services, guidance, and networks to support you in your endeavor. Send us an email and we would love to chat.