What makes Social Business a Game Changing Model

“One of the newest figures to emerge on the world stage in recent years is the social entrepreneur. This is usually someone who burns with desire to make a positive social impact on the world, but believes that the best way of doing it is, as the saying goes, not by giving poor people a fish and feeding them for a day, but by teaching them to fish, in hopes of feeding them for a lifetime. I have come to know several social entrepreneurs in recent years, and most combine a business school brain with a social worker’s heart. The triple convergence and the flattening of the world have been a godsend for them. Those who get it and are adapting to it have begun launching some very innovative projects.” 

Thomas L. Friedman, The World Is Flat: A Brief History of the Twenty-first Century. 

Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry.- 

​​Bill Drayton, CEO, Chair and Founder of Ashoka, a pioneer in funding social entrepreneurship

Definition: 

A mission-driven organization with a market-based strategy. Social enterprises include non-profits which run income-producing businesses and for-profits which prioritize positive social and environmental impact. 

Buy good feel good is an important principle part of a new circular economy, and public recognition is important for emerging brands that are dedicated to standing up for sustainable practices and social issues. We will promote the vision of a new economy, one that is regenerative, equitable and prosperous for all. And will work for a like- minded individuals, and community that is welcoming and endlessly inspirational.

Our goal will also be to create an objective picture of the social enterprise sector that has been developing in Bulgaria, what are the successful global models, what lessons this has yielded and what insights this offers for other countries. We will emphasize the process of mapping the steps to go from pioneering to stage of development, and understanding the need of a vibrant ecosystem that surrounds social enterprises, network organizations and platforms.

Definitions

Ecosystem: The aggregate of interdependent parties and factors coordinated in such a way that they enable productive entrepreneurship in a particular region.

Social enterprise: A business that sets a social or societal objective above making (financial) profit and that has an inclusive stakeholder approach. 

Sustainable growth rate(SGR) : is the maximum rate of growth that a company or social enterprise can sustain without having to finance growth with additional equity or debt. The SGR involves maximizing sales and revenue growth without increasing financial leverage.

Circular Economy: looks beyond the current take- make- waste extractive industrial model; a circular economy aims to redefine growth, focusing on positive Society- wide Benefits. It is an economic system designed to eliminate waste and continue use of recourses. Circular systems employ reuse, sharing, repair, refurbishment, remanufacturing, and recycling to create close loop system, minimizing the use of resource inputs and creation of waste, pollution and carbon emission.  Intuitively, the circular economy would appear to be more Sustainable than the current linear economic system and the main principals will be to Economic, Natural and Social capital.

Change for greater good

Art Angel Foundation: goal is to create change for greater good by defending equality and diversity at all levels in the arts and culture sector. The project impacts social, economic and art service delivery, affecting people by cultural change. In Economic terms, social enterprises maximize profits to have a chance of impact investment or they prevent mission drift by avoiding profit maximization along the lines of traditional philanthropy. Social enterprise is a mechanism for value creation that forgoes value capture and engages in value devolution to serve a wider vulnerable clientele. We explore and share these innovative hybrid ways to fund arts and culture in Bulgaria and to ensure it has a sustainable and thriving future. We support Bulgarian Arts and Cultural organisations to network and exchange good practices, connecting culture with other sectors to be able to rise their social impact. We provide multi- cultural and international cultural exchange. We champion social lifting to most vulnerable members of our society trough Art and Business. Our goal is to make change in society by boosting transparency in the social and business sector, fight corruption in service distribution on national and international level.

I.               Good Practices that already work- ecosystem of knowledge

Social enterprises have the ability to build strong relationships between individuals in social and economic networks on emotional basis, around moral and ethical principles. By the same way, sharing information and resources amongst communities can be beneficial to similar social groups from different parts of the world. For example, international humanitarian initiatives like fair trade, rainforest alliance, have proved that social entrepreneurship can also help create networking opportunities beyond borders and reinforce those who are being economically and socially marginalised.  The idea that we live in one world, and we can make it better place is at the heart of any social entrepreneur.

II.             The “butterfly effect”- one small change can lead to bigger changes in the future.

Social business not only solves particular problems and creates new ethical models to do business but also solves major social problems. Evaluate the realities in Bulgaria that can be obstacles for a vital Social Business Ecosystem; what is the efficiency of the NGOs sector, what is the real impact of the NGOs sector and social services distribution, the level of corruption, missuses of founding, access for the startups to EU financing, over bureaucratization, social innovations, answer the questions why there is a negative attitude of the society to EU, EU policies for human rights and gender equality, and why there is mistrust in NGOs sector in general. By answering all these questions we can rise the question, is it possible a successful social businesses to solve all the failures in society, will a social business be positively accepted among the public, could the good examples be inspiration for a change in the general trends in society.

According to Transparency International, social entrepreneurship is a powerful instrument to fight corruption. With their innovative ideas and leadership, social entrepreneurs can help tackle some of the key challenges of today and offer sustainable solutions for tomorrow. Our friends at the International Anti-Corruption Conference (IACC) run a social entrepreneurs initiative that is providing grants to allow them to do just that. The Anti-Corruption Conference in 16th IACC, 2015 in Putrajaya, Malaysia, where 1,200 people from 130 countries gathered, signed a declaration against governments plagued by cronyism, leaders and democracies corrupted by abuse of power that benefits few at the expense many, causing serious and widespread harm to individuals and society. Asset recovery is essential because it restores the trust of the people and constitutes a sanction that reduces the incentive for corruption and at the same time compensates for the damage caused. We need a culture of integrity in all sectors of society to achieve sustained, positive change, preventing collapse of the rule of the law. In politics, education, business, media, sport, at national and international level institutions, corruption denies people a voice and worsen their lives.

Grand corruption should become a crime of international law. This will enable international institutions and alliances to prosecute offenders, as well as develop additional mechanisms to apprehend, prosecute, judge, and sentence those who have committed crimes of grand corruption.

European Journal of criminal policy and research, in article from 16.06.19 (Grand corruption and government change: an analysis of partisan favoritism in public procurement) draw two countries in EU, under the same regulations, to illustrated how incoming governments sometimes abuse their power to manipulate the allocation of government contracts so as to buy loyalty from cronies. They found that politically-favored companies secure 50–60% of the central government contracting market in Hungary but only 10% in the UK.

 

The Corner Stones for a Social business Ecosystem:

1.     Government support- what are the government policies supporting social business

2.     Public Understanding –people in the society understand what is social business, and what are the core difference between social entrepreneurship, and the classical models of government (budget) support  and philanthropy

3.     Gaining momentum – how fast thing could happen, how responsive are institutions to provide quick respond and support

4.     Access to investments – are there a pool and bodies that understand the importance and also the opportunities for returns

5.     Attracting Skilled Staff  - are there people who are well trained to be businessmen and social workers at the same time

6.     Making a Living- is it able a social entrepreneur, to gain enough for a living when he possess such complex skills- been a successful entrepreneur and in the same time successful and innovative social worker. How in the country these people are cultivated and in the same time attracted to stay and live

7.     Are there the Condition favorable for social entrepreneurs to start and grow their business

8.     Social entrepreneurs can access the non- financial support they need- the understanding in the institution, that the social entrepreneurs are people who need special treatment because they solve a lot of system faults, and help to solve efficiently without be burden to the budget social problems

9.     It is easy for social entrepreneurs to sell to business- how the merging with the business is facilitated, what kind of incentives are created, what are the protections to the social entrepreneurs

10.  It is easy for social entrepreneurs to get grant funding – is the way is facilitated, are there bureaucratic obstacles, is there an extra priority for them

11.  Is it easy for social entrepreneurs to sell to the public

12.  Are the women well represented in leadership and how the gender gap is filled

Economic Overview:

Either social enterprises maximize profits to have a chance of impact investment or they prevent mission drift by avoiding profit maximization along the lines of traditional philanthropy. This article breaks this stalemate by building on the facts that constrain the daily operation of a social enterprise.It is submitted that a social enterprise is a mechanism for value creation that forgoes value capture and engages in value devolution to serve a wider vulnerable clientele.In Economic terms, social enterprises maximize profits to have a chance of impact investment or they prevent mission drift by avoiding profit maximization along the lines of traditional philanthropy. Social enterprise is a mechanism for value creation that forgoes value capture and engages in value devolution to serve a wider vulnerable clientele. Profit motives are alien to social enterprises and social entrepreneurs, and related research maintains that non- profit organizations make sense when it is too costly to monitor for- profit firms misuse of donors monies, in terms of diverting resources to increase shareholders wealth. Thus social enterprises provide a sort of guarantee that surpluses will fulfil a given mission, just like charities ressure donors that their contributions will not enrich sherholders by preventing dividend distribution, as a way to deal with contract failures that otherwise would prevent the accrual of money for attaining social objectives (see Hansmann 1980; Kashinsky, 1986; Rose- Ackerman; 1996; Valentinov, 2008a;),

In Numbers:

A recent study released by the Great Social Enterprise Census reported that in the U.S.:

60 percent of social enterprises were created in 2006 or later

Nearly half of social enterprises have less than $250,000 in revenue, and nearly 50 percent have fewer than five employees (just eight percent have over 100 employees) 

Cause sponsorship is predicted to reach $2.23 billion in 2019, a projected increase of 4.6% over 2018. IEG  Sponsorship Report 

64% of consumers choose, switch, avoid or boycott a brand based on its stand on societal issues.  Edelman’s 2018 Earned Brand Study 

86% of consumers believe that companies should take a stand for social issues and 64% of those who said it’s ‘extremely important’ for a company to take a stand on a social issue said they were ‘very likely’ to purchase a product based on that commitment. 2018 Shelton Group’s ‘Brands & Stands: Social Purpose is the New Black‘ 

57% of U.S. Hispanics agree they are more likely to purchase brands that support a cause they care about, and 43% agree they expect the brands they buy to support social causes ,Nielsen’s 2018 Descubrimiento Digital: The Online Lives of Latinx Consumers 

When it comes to what Purpose attributes are most important to reputation, Americans prioritize companies that are responsible (86%), caring (85%), advocate for issues (81%), protect the environment (79%) and give back to important causes (73%) Porter Novelli/Cone Purpose Premium Index 

Nearly two-thirds of millennials and Gen Z express a preference for brands that have a point of view and stand for something. Kantar’s 2018 ‘Purpose 2020’ Report 

28% of U.S. adults have stopped using a brand because of something negative they learned about in the news.  Critical Mix’s 2018 Spotlight on CSR

33% of consumers are now choosing to buy from brands they believe are doing social or environmental good. Unilever Consumer Study

35% of Americans think a company’s reputation is just as important as the products it makes AND have purchased a product more than once, because of this reason. MWWPR calls these people “CorpSumers”. They walk the talk. MWW’s 2018 CorpSumer Research  

Two-thirds of consumers (66%) say it’s important for brands to take public stands on social and political issues, and more than half (58%) are open to this happening on social media – the top channel for consumer receptivity. Sprout Social’s ‘Championing Change in the Age of Social Media’ 2018 

An estimated $1.2 trillion opportunity exists for brands that make their sustainability credentials clear. Unilever Consumer Study 

Brands with a purpose set on improving our quality of life outperform the stock market by 120%. Interbrand’s Best Global Brands 2017 

The direct impact on future revenue losses due to trust events is conservatively estimated at US$180 billion for the 7,000+ companies analyzed by Accenture in their 2018 Report ‘The Bottom Line of Trust‘. That comes to approximately US$4 billion for a US$30 billion company. 
 

60% of consumers say brands should make it easier to see its values and its position on important issues at the point of sale. Edelman’s 2018 Earned Brand Study  

72% of consumers have donated to charity at the register and 65% of consumers felt positively about the retailer after giving. Of the 28% who do not donate at the register, 44% say it was because they “don’t know anything about the cause”.  Catalist’s Revelations at the Register 

Turnover dropped by 57% in employee groups most deeply connected to their companies’ giving and volunteering efforts. 2018 Benevity Engagement Study 

89% of executives surveyed said a strong sense of collective purpose drives employee satisfaction. Harvard Business Review’s The Business Case For Purpose 

Nearly 3 in 10 employees who don’t give through their workplace giving program say they are not giving because the causes they care about aren’t offered as a choice. America’s Charities Snapshot 2017 

90% of Gen Z believes companies must act to help social and environmental issues and 75% will do research to see if a company is being honest when it takes a stand on issues. Porter Novelli/Cone’s 2019 Gen Z Purpose Study 

76% of young people said they have purchased (53%) or would consider purchasing (23%) a brand/product to show support for the issues the brand supported. But perhaps even more importantly — and more costly — 67% have stopped purchasing (40%) or would consider doing so (27%) if the company stood for something or behaved in a way that didn’t align to their values. DoSomething Strategic’s 2018 Survey of Young People and Social Change 

62% of global consumers want companies to take a stand on issues they are passionate about and 64% find brands that actively communicate their purpose more attractive. Accenture’s 2018 Global Consumer Pulse Research 

81% of tech professional think CEOs have a responsibility to speak up about issues that are important to society. Weber Shandwick’s CEO Activism in 2018: The Tech Effect

Americans expect companies to lead with Purpose: 78% of Americans believe companies must do more than just make money; they must positively impact society as well. 2018 Cone/Porter Novelli Purpose Study

36% say they trust business leaders to do what is right. Enso’s 2018 World Value Index 

Sixty-four percent of respondents agree that CEOs should take the lead on (social) change rather than waiting for government to impose it.  2018 Edelman Trust Barometer