As the financial pressure for those working for non-profit organisations continues, the debate for and against social entrepreneurship is intensifying in South Africa.
Social entrepreneurship is hard to define, with different interpretations in different countries. In South Africa, it is emerging as a blend of for- and not-for-profit approaches, which balances the value and trust of social organisations with the efficiencies and profit motive of business. Within this is a conflict that challenges our cultural interpretation of charity – to make money out of social services is interpreted as inherently wrong and counter-intuitive to the mission-focus of civil society.
It is this dissonance that makes social entrepreneurship so powerful in SA, as it forces us to look at what we assume is right and challenge the ‘norm’. Multiple reports talk of a crisis in civil society1, and question the sustainability of the current system of funding, which is largely dependent on grants. Compounding this is a fractured relationship with a government that subsidises rather than funds non-profits to deliver essential services, in fields such as child protection, education and health.
The concept of social entrepreneurship addresses some of the constraints that civil society organisations in SA experience. It introduces a profit motive to the running of an organisation, which fundamentally shifts the way non-profit leaders approach their work. It is not much different to the non-profit structure in that profit must be re-invested back into the organisation, but it opens up different avenues of funding.
Because social enterprises in SA are often registered as both for- and not-for-profit companies, they can access both grant and commercial funding. This opens a spectrum of opportunities from accessing equity and debt funding, to developing an income stream that brings in predictable, unrestricted income to organisations.
Interestingly, the consequence of this approach is not a shift away from the mission of the organisation, but instead a focus on it. Non-profit organisations that succeed in adapting to social entrepreneurship introduce income into their organisations that aligns with their work. Great examples in SA are the Oasis Association in South Africa, which generates income through its recycling activities – but the rationale to the service is safe, structured employment for people with intellectual disability.
Greg Maqoma set up a for-profit company to fund the development of young dancers, which is the primary focus of the Vuyani Dance Theatre. The graduate of the GIBS Social Entrepreneurship Programme has successfully managed to transform this grant-dependent arts organisation into a highly successful dance company, which has won numerous international awards. Another example is the focus of Spark Schools, to improve the calibre of teachers by focusing on teacher training, a mission which is funded through the low-fee schools Spark operates.
The consequence for organisations starting out with a social entrepreneurial bent is that they think differently about how they deliver their services. Weaved into their models are opportunities to generate income that underpin the service. Examples here include Iyeza Express, which delivers chronic medication to patients in Khayelitsha, using bicycles and charging an affordable R10. Claire Reed responded to the difficulties in growing vegetables by developing a fertilised seed strip, which she sells in nurseries and schools, which funds the vegetable gardens she builds in schools.
It may seem counter-intuitive, but profit encourages a focus on impact, as without quality service delivery, the organisation doesn’t have customers, and consequently, no income. This has links to accountability and transparency, creating a circle that builds trust, credibility and profit.
Social entrepreneurship in SA is not the magic solution that will eradicate the constraints that non-profit organisations experience. But it offers potential to shift our civil society into a different way of doing things. It creates a focus on long-term sustainability, on quality service, efficiency and accountability. It blends the lessons from business with the diversity and complexity of social values, and in the mix are great opportunities for change.
In the words of Bernard Shaw: “Progress is impossible without change, and those who cannot change their minds, cannot change anything.”
Article first appeared in Alive2Green