NATIONAL INDABA 2015 Breakaway 4: Analysis of all funding sectors for the development of social- entrepreneurship skills

Reflecting on the context What is a social enterprise? – Varied definitions. A common principle is the emphasis on building social good and creating social change using a financially sustainable business model. What is a social entrepreneur? – Similar principles to a social enterprise: someone with a vision to improve society – As with a business entrepreneur, about: Taking ownership, risk taking and initiative Consistently looking for what is not there (where there is A and B, inquiring what is in-between!) Using income generated through entrepreneurial efforts and diversified income streams to grow sustainability and increase the impact of ‘social change’ initiatives – Have a realistic prospect of generating sufficient income to exceed costs (now or at some point in the future)

Reflecting on the context Challenges faced by Non-Profit Organisations (NPOs) – Dependency on subsidies, donations and grants – Declining public and private sources of revenue – NPOs/ NGOs tend to compete rather than collaborate In this context NPOs and NGOs struggle to deliver on their objectives. There is a need to re-orientate/ shift organisations to enable sustainability With the NLC’s inability to fully ‘fund’ beneficiaries with its limited resource pool, and the desire to widen the pool of beneficiaries for maximum impact, beneficiaries must take ownership of growing other funding sources

Combining social good with financial sustainability Examples of how beneficiaries are achieving this: – In Durban, an ECD centre now focuses on making toys which are then sold to other ECD centres, creating jobs, building revenue and providing other centres with good quality toys – Diabetes SA mission is to spread awareness, build an understanding of healthy living, grow an understanding of Diabetes and how to manage it. To drive sustainability, the organisation: Offers corporates wellness days, training in diabetes and health support – charging a fee for this service. This service still fits within its mandate, but also provides additional funding to enable Diabetes SA to carry out work in underprivileged communities. Provide home-based carers training at lower fee. – The Ama Wheelies in Mpumalanga build sustainability for their work with paraplegics and quadriplegics through offering embroidery and printing services as an income generating business

Key themes: Benefits of social entrepreneurship approach Benefits of following a social enterprise/ entrepreneurial approach (and supplementing the social good element with a profit component): – Income-generating activities introduce financial predictability and sustainability – Including both components moves organisations towards a “virtuous circle” of efficiency, improved service delivery and social value creation – Growing the resource base allows social enterprises to increase activity scale and impact – Social entrepreneurship/ enterprises will aid in: Getting NPOs/ NGOs to think about sustainability – and to ‘think differently’ Bringing out new creativity/ innovation amongst NPOs, and new self- confidence in the team

Key themes: Benefits of social entrepreneurship approach Benefits of following a social enterprise/ entrepreneurial approach: – This enables NPOs/ NGOs to build their brand in relation to their field of work with other sectors/ stakeholders beyond beneficiaries (e.g. with organisations for whom they can provide paid services) – Supporting job creation and poverty alleviation – Driving skills development – Offering the potential for greater/alternative investment : investors are attracted to the idea of contributing to initiatives that have the potential to become sustainable in the long run – Businesses are compelled to contribute to and report on social issues through triple bottom-line reporting (financial, social and environmental) – with this being an opportunity for NPOs

Key themes: Challenges to be addressed in driving this approach Challenges linked with following a social entrepreneurship approach: – Does NLC legislation/policy imperatives allow us to pursue social entrepreneurship growth and support funding (e.g. for set-up costs/ operational costs)? – Many funders are focused on funding projects rather than ‘the business’ (yet there is a need for seed funding to support establishment) – When half an organisation is non-profit and half is commercial: What legal form is appropriate? Does it require two separate entities? – The brand of an NGO is its most valuable asset: important to check terms of funders and ensure these do not undermine the NGO’s objectives, given that NGOs cannot afford for their reputations to be tarnished (“turn down funding if it does!”) – Need more education amongst beneficiaries and funders about social entrepreneurship, to support roll out

Key themes: Challenges to be addressed in driving this approach Challenges linked with following a social entrepreneurship approach: – Sustainability is not only about funding: NPOs and NGOs need organisational, governance, financial and management skills and capacity building for ongoing delivery – and the ability to manage the dynamics arising when funding is received – Need to acquire business skills – Cooperatives are often excluded: How can cooperatives be supported via this mechanism, to become sustainable? – Lack of coordination and collaboration in social entrepreneurship support space: interventions are not coordinated

Where should we start, in pursuing this approach? Revisit the legal framework to assess if NLC can fund in this area Build an understanding of the concept and mechanisms for roll out: – Host consultative sessions at a regional and provincial level – Carry out research into what exists in the space, those social entrepreneurship efforts that have been successful, and the lessons to be gained – sharing this Encourage organisations to stand on their own feet: NLC can provide an enabling environment, while all organisations should augment the assistance received from the NLC by ‘doing it for themselves’!

Where should we start, in pursuing this approach? In terms of capacity building: – Establish a capacity building programme to support NPOs/ NGOs in incorporating/ building ability to include an income-generating aspect – Consider capacitating local organisations to render capacity building programmes – Foster and support networking and knowledge sharing: peer learning, knowledge networks, awards to raise awareness – Partner with like-minded organisations that support social entrepreneurs, to prevent duplication of efforts Consider ways to maximise benefits linked to NLC funding (e.g. where NLC provides vehicles, set up a ‘map’ or ‘uber’ of vehicles, for improved spread of support) Include within the next Indaba’s exhibition space a focus on organisations that are achieving social change and sustainability Consider an award for the beneficiary that has made significant strides towards sustainability (‘Sustainable social entrepreneur award’?)

Where should we start, in pursuing this approach? In terms of growing opportunities: List beneficiaries as service providers to the NLC, so that beneficiaries can offer their core service and in this way generate additional income Look at possibly using social media to share ‘services’ offered by beneficiaries Establish a knowledge hub/ website to facilitate connection between beneficiaries, and to enable sharing of services within the ‘network’