Resourcing social enterprises: approaches and challenges

This is the second publication from the Bankwest Foundation Social Impact Series and includes preliminary findings from the Supporting Development and Growth in the Community Sector in Western Australia research program. This report is the first output of the Social Enterprise Financial Resilience project, which forms part of the program. Despite increasing interest in social enterprise, there is limited understanding about the factors that support the capacity for social enterprise to deliver social objectives. In particular, we know little about how social enterprises access and use financial and other resources to sustain their businesses and how this can influence their organisational resilience. There are suggestions that social enterprise and small private for-profit businesses face similar barriers to accessing commercial finance (Burkett, 2010; Mavra, 2011). However, there are also factors specific to social enterprise – related to their organisational structures, their business purposes, and their operating environments - that influence how social enterprises attract, use and choose financial and other resources. With regard to financial resources, there is growing interest in and popular discussion about social finance in general and impact investing in particular. Yet, the financial needs, barriers and effects of certain forms of finance on social enterprise resilience and impact remains unclear. The purpose of this report is to review the existing evidence about the resource needs and behaviours of social enterprises, and their barriers and opportunities to accessing financial and other resources. We augment this review with comments from workshops and interviews undertaken with 15 Western Australian social entrepreneurs, and seven social financiers and policy professionals in May-June 2015. Unpacking the financial needs and behaviours of social enterprises provides a platform for better understanding of the factors that affect financial resilience of social enterprises in Western Australia and beyond, and the tools we need to support such resilience. Of course, organisational sustainability requires access to resources beyond finance; we consider in this report wider resourcing needs and their implications for financial resilience.&nbsp

The Baosteel Group – A national champion amongst national champions

In comparison to many of the Chinese and Indian state-owned enterprises examined in this volume, the institutional and competitive position of the Baosteel Group is somewhat unique. First, Baosteel stands out as one of the major success stories of recent Chinese state-owned enterprise (SOE) reform. Created as a national steel champion by the Chinese government in the early years of the reform period, and benefiting from the industrial policy support this status has brought during the intervening three decades, Baosteel has earned the status of one of China’s most internationally competitive SOEs. However, Baosteel is also unique in that it does not dominate the Chinese steel sector. Accounting for only a small share of Chinese steel production, Baosteel’s position is one of a technological leader within a competitive market structure populated by a large ‘national champions group’ of SOEs. Moreover, Baosteel has also faced special obligations to implement national industrial policies, by acting as a technological leader tasked with the role of acquiring and upgrading ailing steelmakers. Understanding Baosteel’s position within the Chinese steel sector as a ‘national champion amongst national champions’ is critical to explaining its operational characteristics, its special relationship with the Chinese government, and the benefits and costs this has carried for the firm

What are the barriers to investing in social enterprises? An investigation into the attitudes and experiences of social entrepreneurs in the United Kingdom

The ongoing global economic crisis and the restrictions that this is having on government expenditure has meant that current UK policy is being directed at trying to end the grant dependency that currently exists in the third sector. One of the key focuses of this policy initiative has been to try to increase the third sector’s access to both debt finance from lending institutions and equity finance from venture capital investors. However, this policy intervention presupposes that the lack of private sector investment in the third sector is a ‘supply-side’ problem caused by limited funds. This ignores the structural problems in the social enterprise sector related to governance and a lack of organisational capacity. Indeed, as of 2011 the ethical investment sector in the UK was worth approximately £9 billion and was spread across 90 ethical investment funds responsible to 700,000 investors. Additionally, social investment (i.e. those funds targeted specifically at third sector organisations) was worth £165 million as of 2011. This suggests that the lack of private sector investment in social enterprises in the UK is not a ‘supply’ side problem but is instead related to the ‘investment readiness’ of social enterprise

Democratic Enterprise : Ethical Business for the 21st Century

Published with the support of the Scottish Government and the Economic and Social Research CouncilPublisher PD

Reconsidering UK Community Development Finance

The report includes ten case studies of community finance initiatives in the US and the EU. These highlight the different features of community finance organisations, their target group and their core activities in order to identify what aspects of their operation are integral to creating successful interventions in deprived communities. The objective of these case studies is to highlight particular aspects of their activities and operating environment that are instructive for CDF in the UK.Woodstock Institute provided case studies of US CDFIs

Intermediary perceptions of investment readiness in the social investment market

The ‘social investment market’ (SIM) in the UK is a growth area due to the governments’ focus upon building up the supply-side element of the market over the last decade, often through the direct financing of ‘social and investment finance intermediaries’ (SIFIs). However, this ignores problems that can occur on the demand-side of the SIM, such as a lack of ‘investment readiness’ (IR) amongst social enterprises (SEs) seeking investment. Indeed, whilst there is now a significant body of policy-based and practitioner research exploring the SIM, there remains a paucity of empirical academic research. The research reported in this paper sought to explore SIFI perceptions of what constituted IR in the SIM. Semi-structured interviews were held with the fund managers (or relevant personnel) at 15 SIFIs in order to explore what they believed constituted IR and how they assessed this. The results indicate that the conception of IR in the SIM is similar to that held in mainstream financial markets. The results are discussed in relation to the prior literature and theories of the SIM

The Contribution of Micro-enterprises to Economic Recovery and Poverty Alleviation in East Asia

The economic and social crisis that afflicted East Asia from mid 1997 produced the biggest setback to poverty reduction in the region for several decades, as well as aggravating social vulnerabilities. There were many dimensions to this, including: falling incomes; rising absolute poverty and malnutrition; declining public services; threats to educational and health status; increased pressure on women and children; and increased crime and violence. The objective of this paper is to analyse the potential contribution of one subset of small and medium sized enterprises, micro-enterprises and the role of micro-finance more generally, to regional economic recovery and poverty alleviation.micro-enterprises, micro-finance, economic recovery, poverty alleviation, East Asia

Empathic social enterprise: the role of empathy and shared intentionality

Research conducted with the UKs first professional symphony orchestra cooperative provides evidence and insight into how empathy and shared intentionality impacted upon their cooperative governance. Individual semi-structured interviews, conducted with 36 of the orchestral musicians, were analysed and four themes emerged from the data, which were interpreted as: ‘empathy’, ‘shared intentionality’, ‘provide and preserve’, and ‘cooperative governance’. Findings of the research indicate that performing arts groups such as symphony orchestras can be social enterprises. The paper examines the relationship between empathy and social enterprise. Empathy is presented as a multidimensional moral and psychological concept. New concepts of ‘external’ and ‘internal’ empathy are also proposed in relation to social enterprises and their beneficiaries. Empathy and social enterprise leadership is explored and implications for business leadership education are discussed. Finally, a new model for the definition of a social enterprise based upon the intersection of high-levels of innovation and entrepreneurship and empathy and shared intentionality is presented

Religion-motivated Enterprises in the Marketplace: A Macromarketing Inquiry

This exploratory essay identifies and examines a variety of religiously affiliated or inspired enterprises operating in otherwise secular marketplaces. While explicitly recognizing that some marketplace manifestations of religion can be controversial, even dysfunctional, it argues for the evident macromarketing relevance of this project. The approach for analyzing what this paper refers to as “religion-motivated enterprises” (RMEs) consists of (1) a nominal classification scheme to illustrate and categorize the diversity of RME examples; (2) some foundational principles shared among major faith traditions that provide a basis for an RME ethos; and (3) basic propositions that, with future empirical testing, may explain the contributions of these organizations to improved market performance. Our commentary includes environmental factors that prompted the establishment of many RMEs, the nature of their sustainability, and the importance of mission statements to their operations. Finally, we identify opportunities for additional research and summarize the macromarketing contributions of this article