An Alternative Social Enterprise Model

Enterprise with a Social Agenda, a Mind for Profit and a Heart for Community”.

This week I was challenged on the ‘for profit’ motive of the MOBILISE! 3.0 venture. The challenge prompted me to crystallise my thinking and present as complete an argument as I can.

This model was first conceived in 2009 in response to the weaknesses that so often seem to plague ‘non-profit’, social enterprises.

What is wrong with the typical 'non-profit' social enterprise model?

1. ‘Non-profit’ is a misnomer. With an effective social enterprise, everyone profits when measured in terms of value created for all stakeholders. Therefore why adopt such a one-dimensional, financial, interpretation of ‘non-profit’ as an identifier? I think it’s wrong.

2. A tolerance for mediocrity. All too often, when social comes before enterprise, ‘doing good becomes an excuse for doing badly’; as if the worthy cause is enough to cover a multitude of operational sins. It isn’t.

3. Dependence on external funding for survival. A venture dependent on external funding is at the mercy of both macro- and micro-economic factors; funding can dry up during recessions or at the whim of a donor organisation. How many social enterprises will have their backs to the wall during the current (and still to get worse) economic crisis?

There has to be a better way.

An “enterprise with a social agenda” offers some advantages;

1. Correct view. An effective enterprise with a social agenda, delivers a multidimensional profit to all stakeholders when measured in terms of value created. Therefore define ‘profit’ in its full, multidimensional glory. Different thinking leads to different results.

2. Independence. when a venture makes a profit, it takes control of its destiny; it frees itself from a ‘beggar mentality’ and no longer (or never) beholden to external funding for its survival. The beggar is as much the slave of the benefactor as the borrower is of the lender!

3. Sustainability. For as long as a venture makes a profit, it can continue to survive, grow, flourish and achieve its mission, indefinitely. Why do it any other way?

In the “Enterprise with a Social Agenda” model;

1. The social agenda is the enterprise’s reason for being, to deliver a value to the community on a profitable, fair-exchange basis. An ‘enterprise with a social agenda’ is not a charitable organization but a business with a social agenda. There is a difference.

2. Profit is what the enterprise does. The enterprise pursues its mission in a profitable manner that is consistent with its shareholders’ social agenda. No doubt, developing such strategies requires more imagination and expertise than the typical profit-only business model; as different in philosophy and methodology as permaculture is to mono-culture agriculture.

3. Community is what the shareholders do with the profit, it is the ‘sacred trust administered by the shareholders for the good of the community’ (Andrew Carnegie). In many instances, the ‘beneficiary community’ itself being a shareholder in the venture.

In Conclusion.

In an enterprise with a social agenda, the objective is to;

1. “Preserve the core” by ensuring that the venture is independent and sustainably profitable.

2. “Stimulate progress” by leveraging external funding on a project by project basis, with adequate provision to navigate economic cycles.

That’s what MOBILISE! 3.0 is.

MOBILISE 3.0 is unashamedly being built on the “Enterprise with a Social Agenda, a Mind for Profit and a Heart for Community” foundation.

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