Scaling Up Social Enterprises

“Very few social enterprises have got to a national scale and had a major impact,” remarked Liam Black, a social entrepreneur who led Fifteen along with Jamie Oliver.

What is holding social entrepreneurs back from scaling up to deliver broader and deeper impact? This brings us back to the fundamental problem of how social enterprises could raise finance to scale up its operations. Today, it remains a grey area for social enterprises, on whether they should look for donations like a charity or source for commercial funding like a business. However, interestingly, a growing number of social enterprises are working with corporate organizations to create new ways of raising finance to scale up.

For instance, Autism Works that is run by Peter McDonald enjoys commercial financial support to scale more quickly through a Social Innovation Pioneers programme by strategy consulting firm, Deloitte. Autism Works hires autistic people as software testers. McDonald wants to scale up his enterprise across UK, hiring up to 120 autistic people within 5 years for 2 key reasons. Firstly, unlike typical individuals who deem hiring disabled employees will cause productivity lag into business’s services, McDonald sees the potential in autistic people doing a much better job than ordinary people in jobs requiring intense focus, comfort with repetition, and memory for detail. Hiring autistic people as software testers gives him the confidence that Autism Works will own a competitive advantage over traditional competitors. Secondly, he believes that scaling up Autism Works will eventually create more employment for autistic people and change the world’s perception of their work capability dramatically.

In truth, there is no lack of organizations akin to Autism Works that prioritize social impact over profit maximization. However, because most of these organizations rely on grant funding, the public often associate the word “social” to “loss-making”.

In my opinion, interminable philanthropy from the public or government will not safeguard social enterprises with a sustainable source of finance. Relying on philanthropy will eventually cause social enterprises to lose their commercial footing in the competitive marketplace. In fact, even blur the boundaries between social enterprises and non-profit organizations.

What social enterprises need is to do? Akin to Autism Works, they should develop sustainable business model to support their social mission and then seek ways of raising finance to scale up and deliver broader impact. In this context, corporate organizations with financial expertise like Deloitte play a vital role in helping social enterprises to expand strategically.

If more corporate organizations are willing to exploit their resources and partner with social entrepreneurs, not only more social problems can be tackled, new financial models can also be created to help the social enterprise sector become more financially sustainable to scale up.

References

Hurley, J. (2012, June 6). Building a social enterprise with added ambition. The Telegraph. Retrieved June 19, 2012, from http://www.telegraph.co.uk/finance/businessclub/9313730/Building-a-social-enterprise-with-added-ambition.html