Agenda What is SE?Why SE?The Development PathThe SEF
What is SE? It is a sophisticated business model. It uses business to meet social, environmental and/or economic challenges. It places these challenges at the centre of the business model. It strives for blended value.It attaches profits to the challenge and not the investorIt is a long term strategy to self reliance.
I saw how the concept of business could be reformulated simply by disconnecting investors from the expectation of financially gaining from their investment. “.”.”
Charity Non-Profit Social Enterprise Social Purpose Business For-Profit Business Where SE Fits …
Why SE? Something is happening!!What SE brings to the tableTrends in the operating environmentRisks are surprisingly similar to current risksIts tested; it worksAmbition: direction, level and pace of ambition
Something is Happening: Change is a foot!! Net Impact is a global network of leaders who are changing the world through business. Mark Albion – co-founder – 2008 in Edmonton – “something in the water – something has changed”
I believe that social entrepreneurship will be the driving force in the world over the next 100 years, the single biggest movement that’s going to change the way we live. Jeff Skoll “ ”
So, the question is: If we have been successful managing a set of diverse and significant risk, why do we feel we will not be successful at managing SE risks?
Answer: The 3 “Cs” Culture: “The journey from grant funded organization to a sales led SE can require a massive change in org culture. It involves travelling a learning curve with a right angle in it” Competency: Current competencies are not a good fit Comfort: As frustrating as things might be now, we know how to operate in our box – we know the terrain - we know how to managing our risks.
It’s tested; it works 1844 : modern co-op movement founded 1895 : Goodwill Industries – 1st thrift store. 1956 : Mondragón Corporación Cooperativa. The world’s largest social enterprise by annual sales and size of staff. Today
Ambition: Direction, level and pace What degree of control do you have over the direction and level of ambition and over the pace with which you achieve it?
Organizational Readiness Assessment: (Board decides, “This is a good fit; we are ready & committed”) Development of Minimum Specifications : (Board ratifies the criteria by which to evaluate opportunities) Generation of Many Business Ideas Quick Assessment of 3 Ideas Board approves the short list of ideas that meet the minimum specifications Feasibility Assessment of 1 Idea Business Plan I mo. 2 Mos. 3 mos. 2 mos. Board selects one idea for market research & financial feasibility Board decides whether or not to complete the plan and prepare launch
Catalyst ; agent of change; steward of org resources EntrepreneurRisk Manager Strategic advisor Owner Partner Leverager of social and financial capital Promoter Fiduciary Overseer Balancer of social and economic interests Does SE fit with the mission? Do we have the resources to take this on? Is SE a cultural fit? How are we going to balance social and economic goals? Are we prepared to compete in the market place? What is the only way to break even is by hiring fewer disadvantaged folks? What is the enterprise cannot afford to pay a “living wage”? What might our donors say and do? Who needs to owner this? How much debt are we prepared to take on? How much equity are we prepared to contribute? If we succeed, we likely will become less reliant on government funding. Is this a good thing?
Get legal advice Know yourself! Are you are society, a non-profit, a charity, a co-operative? Have you read your articles of association and your by-laws? What are the powers of the organization: are you able to own assets, distribute income, borrow? Remember the CRA Corporate Structure – Legal Considerations
Flexible – fit financing to need Term Interest rate Fees Security Terms and Conditions
Social Enterprise – Local economy mission Good Food Box Capital and working capital financing Term – 6 year Interest – 5% Repayments: Interest only for 1 year; blended P and I for next 5 years Examples …
Social Enterprise – Affordable space to arts community Capital and working capital financing Term – 5 year Interest – 4% Repayments: Interest only for 1 year; blended P and I for next 4 years Examples …
Affordable housing: acquisition of supportive seniors complex Term - 1 year Interest - 5% Security - first mortgage Status – Paid in full
Examples … Balance sheet strengthening: acquisition of program center Term – Loan # 1 for 1 year; loan # 2 for 2 years Interest – loan # 1 - 5%; loan # 2 – 6.5% Security - first mortgage Status – Paid in full
Path to Loan Grants Seminars Portfolio Development Services
Loans Furniture Recycling Planning Clients - SE