To be a social enterprise, or not to be? That is the question. (with apologies to William Shakespeare)
I wrote briefly earlier in the summer about my time in Ladakh, and the kind of non-profit work I had seen there. Today’s blog is a more general reflection of the different levels, scales, and activities that, to me, all sit somewhere in the «social enterprise» space. In reality, trying to specifically define something like social enterprise seems a bit pointless – it is enough to say that organisations are «socially enterprising» as long as they have a social goal that is more important than financial goals. I don’t even think a social enterprise should be viewed in terms of not making profit. As long as the social goals are driving the business, then profit is a good thing if it is re-invested into contributing to these social goals.
A social enterprise can, in my view, be a charity than relies mainly on fundraising but does involved some income generating activity. It can also be a fully-fledged business that operates just like any other business, but has an clear and dominant social goal, such as specific community employment. The same deal applies, as long as the social goal drives activity, rather than profit driving activity, then that seems fine to me. Why set an exact definition, which only serves to exclude some businesses or charities from being called «social enterprises», when what really matters are the social outcomes of their activity?
So here are a few examples I saw in Ladakh that I think nicely describe the different ways «an activity» can be a social enterprise. I spent half my time there teaching at a village school that is partly funded by sponsorship from (mainly) USA. This money contributes to the running costs, allowing the school to offer a significant number of free places to children from local families most in need of education and least able to pay for it. The inconsistency of government schooling (and often complete lack of it) means there is a clear need for this kind of social action. Local families that are more able to contribute are asked to pay a tuition fee, thereby making the school only partially reliant on sponsorship from abroad. In addition, the school admits volunteer teachers (like me) who contribute in terms of a teaching role, and also become friends of the school and future ambassadors for helping to raise sponsorship money.
Waiting for the school bus
Contrast this with, for example, ONergy whose mission is to supply solar lighting to 1 million Indians by 2016. A totally different scale and a totally different business model. They provide low-cost solar panel solutions to poor communities, through microfinance and other means. This provides evening lighting for home-work, small scale home industry and so on and so on. In the longer terms, access to electricity also reduces the need for hazardous or unhealthy fires using wood, kerosene or (honestly) yak-dung. I came to know about ONergy because Ladakh is one of the sunniest regions in the Indian subcontinent, with much potential for solar power, especially for remote villages with no «grid access». ONergy is currently engaged in other regions in India, and Ladakh is on their radar, indeed small solar panels are starting to be seen on people’s roofs across the region. The army already uses solar power extensively there. So while ONergy is clearly very successful, they are driven by their primary social goal – to bring reliable and affordable lighting to the homes and schools of poor communities, communities without access to reliable lighting and power.I spent the second half of my time in Ladakh «on tour» with a UK charity called Lotus Flower Trust, founded and run by my godfather, John Hunt. A charity in name, I think Lotus Flower Trust shows nicely where the boundaries between charity and social enterprise are a little blurred. LFT’s main goal is to “change the lives of children in remote and impoverished communities in India, by providing educational facilities to help break the cycle of poverty”. The majority of the income for these building projects come from fundraising in the UK, but LFT also works with schools in the UK on projects to provide British students with their own life-changing experiences, raising the money for an Indian school project and then going on an expedition in that region, and helping on the actual building of the school. And this is the interesting bit – in order to raise the considerable amounts of money, LFT is working with schools in the UK to provide their students with experiences that go over and above the normal school experience. In return, as part of this relationship, the students are putting together fundraising events that ultimately lead to the schools and orphanages in India being built. So we are not talking about business versus charity, but a merging of the two. Every charity needs to earn an «income», just like every business. The more a charity innovates to earn this income, the less sense it makes for us to try to distinguish between charity, social enterprise, or «normal» business.
School built by Lotus Flower Trust
To take this a step further, surely social enterprise is all about the delivery of social goals, not the structure of an organisation. Here is an example: one of the areas in Ladakh where Lotus Flower Trust has built several schools is called Chang Tang. It is the other side of a 5300m high pass from «main» Ladakh, and on the way to the Tibetan border. It is remote. There is a village called Lower Thuruk, where LFT built a school some years ago. One of the buildings built as part of the school is also now being used by the village women (mothers, sisters, grandmothers) to weave traditional carpets that they then sell at tourist spots some 50 miles away. Profit made from this venture is reinvested for the shared benefit of the village community. It is a community project with obvious social benefits for the community (skills for the women, extra income for the village, skills for the next generation). But the amount of profit made does matter in this case, and (in a way) there are shareholders (the village women), but the driving goal is to improve the lives of people in the village. So where does this example leave a definition of social enterprise?
The carpet weaving women of Lower Thuruk
I believe all four of the above examples merit the term social enterprise. And tellingly, none of the above make much noise about being a social enterprise. They just get on with it; they do what they do because they believe in it, and if you call them a social enterprise, a charity, a collective, a non-profit or whatever you want, they’d just carry on doing it. We can learn from that. Drop the definitions, and up the action!
If you would like more information about Ladakh, volunteer roles, «social action» trekking or helping Lotus Flower Trust, please visit their website www.lotusflowertrust.org, or in Norway, contact Will Nicholson from IntoLife (www.intolife.no on email email@example.com).