Can social entrepreneurship bring changes to the society, and which social enterprise model can bring sustainability to a non-profit organisation? On March, 27, participants of the Social Entrepreneurship in Belarus: Viable Models and Secrets of Success seminar studied best foreign practices of social entrepreneurship (SE), as well as legal aspects of establishing social enterprises in Belarus. The seminar on social entrepreneurship was organised by the ODB (Brussels) in partnership with the Support Programme of Belarus of the Federal Government of Germany.
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| Alexander Skrabovsky, Head of the Organisational Committee for Social Weekend projects contest |
Can you be profitable if you create a "social" enterprise and pursue social goals? Alexander Skrabovsky, head of the organizational committee for the contest of social projects Social Weekend presented cooperation models for modern Belarusian business to work with NGOs and NPOs, and shared recipes for financial sustainability of civil society organisations.
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| Alexander Skrabovsky presents “social” investment model, according to the European Venture Philanthropy Association (EVPA) |
Presenting the European model of "social" investment, Skrabovsky noted that public organisations today get their finances from:
- Charity organisations and funds; donations; grants and fundraising (such "investments" are marked in yellow in the figure. - Editor's note).
In this case NPOs are very unstable: if they only use charity sources, civil society organisations are directly dependent on the size of contributions; when “grant” support is cut, organisations can find themselves at risk of disappearing.
- Commercial companies, which in rare cases are willing to give funding to a social project (in most cases this decision is made by the company's top management), make periodic payments to support social initiatives (or projects), they have their own CSR (these companies are marked in red in the figure. - Editor's note).
According to Alexander Skrabovsky, NPOs should turn to business companies for financial help only if they already have a "well-designed social project" and are able to show how funds can be effectively distributed and used. The civil society organisation should also take into account the areas that a certain commercial company has announced as their priorities for CSR or cash contributions (whether this company sponsors environmental protection, support of talented youth, assisting disabled people, cultural development, etc.). In this case the NPO should target specific businesses to get funding. According to Alexander Skrabovsky, today Belarusian business companies are prepared to spend money on social issues.
- social enterprises and social entrepreneurs (these investments are marked in blue and orange in the figure. - Editor's note).
| "This is a business, but its primary objective is a social one" |
According to Mr. Skrabovsky, at the moment NPOs can become founders of legal entities (in this case a social enterprise) and use their profits for "statutory" (i.e. social) objectives. Social enterprises can thus make money, generate commercial profits and lend sustainability to social projects. According to EVPA, a social enterprise can bring 75% or more of the annual NPO budget.
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| Alexander Skrabovsky |
Alexander Skrabovsky, Deputy Development Director of MaeSens.by: "Social entrepreneurship is a business, but its primary stated objective is a social one (why they do this): "You buy one pair of shoes and you pay money for it, but the second one, thanks to you having bought the first one, will be sent to kids". It is very importnant to generate enough profits to target social issues."
Speaking about the global social entrepreneurship experience, SocStarter Belarus creator Maria Cherakova (Netherlands) stressed that this has been a priority of European business for the past 10 years. According to her, the notions of social entrepreneurship and of the CSR often get mixed up, while they are in fact not identical.
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| Maria Cherakova |
Maria Cherakova, innovation expert, founder of SocStarter Belarus (Netherlands): "Social entrepreneurship is a business that pursues are social goal. A very important characteristic of social entrepreneurs is that they are social innovators. They see a problem that exists in the society and think how it can be solved; thus, changes are made not only because they make a product but because they see that they can shine some light upon an existing issue: everyone will know about it because of the product."
| "Social entrepreneurs are just people who believe that it is time to change something" |
In her opinion, social entrepreneurs solve social issues as social innovators, with the process going "from below" rather than "from above". Often these people believe that they can change something and that it is time to do so. They are primarily interested in changing the society, making their contribution to social changes. Such is the influence of a social business, where the primary "profit" is defined by social impact and social change.
According to Cherakova, she noticed when they were launching SocStarter Belarus that a large part of proposed Belarusian projects was dealing with issues faced by disabled people: "In Belarus, just as in many other Eastern European countries, this is a major problem because the government does not focus on this a lot. Here is where social innovators and social entrepreneurs can change something. I believe that if this takes off, the situation will change. When social entrepreneurs do this, other issues will become more visible. Maybe we will then be dealing with environmental issues."
Legislation in the UK has a special legal entity type for social enterprises – CIC (Community Interest Companies). These are companies that create in the interests of communities. For example, to bring focus to the issues of the blind, one of London restaurants serves their customers in complete darkness and only employes blind or visually impaired staff.
| "It is crucial to be positive: when you sell a product or a service, you tell the world how it benefits the society" |
In the opinion of the Dutch expert, such approach can be used for Poland and Belarus. However, it would be a mistake to say that only the government can stimulate social entrepreneurship. According to Cherakova, environment for such entrepreneurship is created by ordinary citizens, non-formal education, financial sector (investors and banks), business sector (business incubators like Imaguru, as well as network associations), social networks, government and the media.
When creating a company that will employ disabled people, according to the expert, the primary goal is to create a high-quality service/product in the open competitive market. When the customer, say, visits the website to learn more about the product, they will see that the enterprise is also performing a social mission. It is possible to create a website free of charge with the help of such services as Weebly.com or Wix.com.
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| Elena Kuvichka, fundraising expert (Sukhumi) |
Elena Kuvichka, a fundraising expert from Sukhumi, brought the focus onto creation of quality business models of social enterprises. She encouraged future social entrepreneurs to feel free to use online trading tools, commercial marketing strategies and the rules of healthy price competition on the open market of goods and services.
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| Evgeniya Rybakova, consultant for the Harju Entrepreneurship and Development Center (Estonia) |
Presenting the Estonian experience of social entrepreneurship, Evgeniya Rybakova, consultant for the Harju Entrepreneurship and Development Center, noted that Estonia provides no government support to social entrepreneurs. Many social enterprises in the Baltic and Scandinavian countries do not yet include themselves into this category. At the same time, promoting the unique selling points of their goods, products and services, such companies can even "dictate" their prices:
"People need to understand why they should pay a bit more and support the social entrepreneur rather than buy a product or a service from a regular one. If they understand that this helps resolve certain social issues, this will facilitate the decisions they make on the national or public level."
Currently interest of social entrepreneurs in Estonia are represented by a non-profit association that unites 37 organisations. Estonian legislation does not yet include the term "social entrepreneurship". However, the association has been lobbying changes in the law. The Harju Entrepreneurship and Development Center in cooperation with Belarusian organisations and with support from the Estonian Ministry of Foreign Affairs has already implemented a project on exchanging experience of youth social entrepreneurship.
Office for a Democratic Belarus" (Brussels) is grateful to the Support Programme of Belarus of the Federal Government of Germany and to all the partners that contributed to the event. Seminar is part of the "Clearing House" project.
Useful links:
Successful Models of Social Entrepreneurship: Global Experience. Maria Cherakova, UNDP Belarus Innovation Consultant (Netherlands)
Social Entrepreneurship in Estonia (in Russian)
Social Enterprises in Slovakia. Yakub Schimek, Pontis Foundation Programme Manager (Slovakia)
Social Enterprise Development and Management. Elena Kuvichka, fundraising expert (Sukhumi) (in Russian)
Social Interests of Business, or Best and Worst Social Projects from a Business Perspective. Alexander Skrabovsky, MaeSens.by (Belarus) (in Russian)
Legal Aspects of Creating and Managing a Social Enterprise. Vitaliy Khmelnitsky, lawyer in the Minsk Regional Bar Association (Belarus) (in Russian)
Set of Legal Documents for a Social Entrepreneur (in Russian)
Social Enterprise Experience: Case Study of "ArtIdea". Natalya Ampleeva, Director of "ArtIdea" in BelAPDiIMI (Belarusian Association of Assistance to Children and Young People with Disabilities) (in Russian)
| FEEDBACK FROM PARTICIPANTS |
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| Tatsiana Gordey, Youth Public Organisation "Vzaimoponimaniye" (Mutual Understanding): |
"Estonian experience was very educational and useful, the Abkhazia expert also spoke of many practical things: the algorithm of how to start planning activities, calculate and evaluate possibilities and abilities of an organisation, generally estimate the resources possessed by the organisation. Specific examples of activities were also given.
For example, the blind masseurs: this is universal and can be used regardless of the country where you stay or the region you live in."
| Veronica Shendo, Charity Catholic Association "Karitas": |
"This experience will be useful for my organisation, I understood and once again realized what are the main traps that we keep walking into all the time. Thanks to all the experts we now have good level of knowledge necessary to develop social entrepreneurship in Belarus, as well as to develop our currently existing organisations."
Read more:
Social Entrepreneurship: How Can a Social Enterprise Be Created in Belarus?