Social Enterprise Project. Orientation & Initial Needs Assessment

Transcription

1 Social Enterprise Project Orientation & Initial Needs Assessment

2 Agenda Orientation to Social Enterprise Project Overview Initial Organizational Readiness Assessment Brainstorming Next Steps

3 Purpose & Outcomes An increased knowledge about social enterprise as a non-profit business model An awareness that there are legal implications and the need to access legal advice Initial brainstorming about potential social enterprise ideas Familiarity with success stories and lessons learned from sample social enterprises

4 Purpose & Outcomes (continued) An increased understanding of the OTF project Familiarity with the four phases of social enterprise development The first steps of an organizational readiness assessment Understanding and readiness to form a 'team' or 'committee' to move the project forward Learn, network, and have fun!!!

5 Social Enterprise Definition A social enterprise is a revenue-generating business with primarily social objectives whose surpluses are reinvested for that purpose in the business and/or for community benefit. Centre for Community Enterprise website:

6 Enterprise Spectrum Enterprise Spectrum Traditional Non-Profit Non-Profit with Income Generating Activities Social Enterprise Socially Responsible Business Corporation Practicing Social Responsibility Traditional For-Profit Enterprise Mission motive Stakeholder accountability Income reinvested in social programs programs or operational costs Profit-making motive Shareholder Accountability Profit redistributed to shareholders

7 Double Bottom Line 2 Strategic Objectives Social Objectives aimed at mission accomplishment. Financial Objectives focused on financial sustainability. We don t employ people to make brownies, we make brownies to employ people. CEO of Greyston

8 Double Bottom Line: Practices of Social Enterprises Use business tools and approaches to achieve social objectives Blend traditional funding and earned revenue/loans Create social and economic value Generate income from commercial activities to fund social programs (reinvest profits back into the organization)

9 Double Bottom Line: Practices of Social Enterprises Market-driven and mission-led Measure financial performance and social impact (Return on Investment/Social Return On Investment) Meet financial goals in way that contributes to the public good Enjoy financial freedom from unrestricted income

10 Difference Between Social Enterprises and Traditional Businesses Social enterprises differ from traditional businesses in two important ways: their earned income strategies are tied directly to their mission; and they are driven by a double bottom line, a virtual blend of financial and social returns.

11 Why Social Enterprise? Economic Stress More Direct Mission Reductions in Funding Decline in Personal/Corporate Donation More Non-Profits Competing for Fewer Dollars Greater Accountability Demands

12 Benefits & Risks of Social Enterprise Activity: In small groups develop a list of possible benefits and risks of social enterprise for your organization. Use the following categories as guidelines: Financial Mission Operational Cultural (Internal to the organization)

13 Types of Social Enterprises Employment/Training Mission based Revenue generating social enterprises

14 Evolution of Social Enterprise Method One: Starting an entirely new product or service Method Two: A major expansion of an existing product or service Method Three: Expansion of an existing activity for a new group of people Method Four: Purchase of an existing business Method Five: Merger or partnership with an existing organization Let s hear some of your ideas regarding examples for each method!

15 Legal Issues Questions to ask when developing a social enterprise Is it mission based? Do we need to operate as a separate entity? What are the legal implications for the organization? It is recommended that you gain the assistance of a qualified lawyer regarding your specific situation because: Your venture needs to be structured so that it is legal, transparent, and ethical, with solid risk management practices in place. Avoiding legal advice can set up the organization for future problems. A poorly structured social enterprise can put your organization at risk of losing tax-exempt status and/or at serious financial risk.

16 Legal Issues You need to know what you want to accomplish before you approach a lawyer. Be clear about your business objectives, your capital needs, your method of business operation, and any risks that you are concerned about. Resources available to assist you Nonprofit Lawyer in your area ( The Canadian Social Enterprise Guide Chapter 8 The Legal Context) Social Sector Entrepreneurship and Innovation Published by Aperio

17 How do Social Entrepreneurs Think? Activity: Complete the social enterprise checklist to find out if you think like a social entrepreneur!

18 Traditional or Entrepreneurial Thinker? Traditional Thinking Government should be providing the funds for social needs Our plates are already full, we can t take on anything more The Funders restrict our income and our outcomes Our future as an organization is uncertain Social Entrepreneur Thinking Government isn t providing the funds; maybe there is another way What are we currently doing that is giving us little or no return We are the masters of our income and our outcomes Let us collectively, as an organization, create our future

19 Traditional or Entrepreneurial Thinker? Traditional Thinking Social services operate separately from the business community We cannot take risks Social Entrepreneur Thinking Our organization needs to network with the business community Smart risk is acceptable and required We are about providing a service, not about making a profit Mission, mission, mission We can provide a service and earn a profit No money, no mission

20 Who Are Social Entrepreneurs? Adopt a mission to create and sustain social value Recognize and relentlessly pursue new opportunities Engage in a process of continuous innovation, adaptation, and learning Act boldly without being limited by resources currently in hand Exhibit a heightened sense of accountability to the constituencies served and for the outcomes created

21 Who are Social Entrepreneurs? (cont d) Take risk on behalf of the organization and its stakeholders Look for new ways to add value to services Look for new ways to serve stakeholders Understand the difference between needs and wants Weigh the social and financial return of investments Keep mission first but know that without money there is no mission

22 Success Stories TurnAround Couriers (TAC) is a professional and socially responsible bicycle courier service in Toronto. Recruit only at-risk youth for both courier and office positions TurnAround is not a charity--it is a competitive, growing business, with a heart. Successes 100% sustainable by year 3 89 youth now have full-time employment 30% were hired by other courier services (increased their monthly income by $500) 40% continue to work at TAC 30% have returned to school TAC now in a position to offer career laddering opportunities

23 Success Stories EthniCity Catering provides Calgarians with high-quality, multi-ethnic food. EthniCity Catering employs immigrant women in transition and breaks the cycle of "no Canadian work experience, no Canadian work". Successes In 2007, EthniCity Catering provided 3,900 hours of paid employment to immigrant and refugee women looking for their first job in Calgary 36 women worked in the EthniCity Catering kitchen for a period of 3 months After 3 months they moved on to: Full-time employment ESL Education Upgrading 40% of funding for the training program is provided by catering operations; 60% is provided by the United Way Found a gap and filled it

24 Lessons Learned Cook Studio Result Ceased operations in 2006 Operating Loss of $90,000 Missed Opportunities Focused too much on the mission and not enough on the business Failed to hire someone who had experience operating a food service business Did not have a concrete marketing/sales plan

25 Lessons Learned Packaging Company Results Ceased operations in 2006 Operating losses of over one million dollars Missed Opportunities Board of Directors were hands-off Failed to hire someone who had experience operating a packaging company Had the if we build it, they will come mentality Did not have a clear business plan

26 Best Practices of Successful Social Enterprises Board Involvement & Commitment All-A-Board Tom Freeman, E.D. Our board of directors is a small board, focused on social enterprise and its importance. They have a clear understanding of social enterprise, and there is a great deal of entrepreneurial spirit. Board members are constantly checking ideas, evaluating success. If we do a major expansion and renovation, the board is very involved in making sure we hit the right buttons. We have to be able to respond quickly because in business, moments of opportunity come and go. The board is very responsive.

27 Best Practices of Successful Social Enterprises Training Le Bucafin Carole Lachance, Co-Director At the board level, we have to build the capacity of the team to be empowered to start the enterprise. If a problem comes up, they have to take action. You have to create the capacity to resolve problems. Training if very important, both for the board and with employees.

28 Best Practices of Successful Social Enterprises Board Involvement Inter-Cultural Association (ICA) of Victoria Jean McRae, E.D. We have a board commitment to social enterprise development, so when someone has a brilliant idea we have a way to articulate it and deal with it. There is a committee of the board that works on social enterprise it also includes some staff. The committee has developed a policy. We ve articulated our approach: the main point is to bring in extra funds to support what ICA does We demand of anything we re doing that it has to fit certain standards.

29 Best Practices of Successful Social Enterprises Business & Sustainability Planning Inter-Cultural Association (ICA) of Victoria Jean McRae, E.D. At the board level, people are actually looking at programs and at how much money they re bringing in and whether each program is worth it. They re looking with a far more critical eye than they have in the past. There is a sense of new possibilities, and people are seeing the relationship if we can bring in money and be less dependent on funders, we can do programs we know are useful whether or not they are fashionable to funders.

30 Best Practices of Successful Social Enterprises Strategy Vocational and Rehabilitation Research Institute - Leslie Tamagi, E.D. Should non profits enter the business world? As a non-profit who successfully operates businesses, we have to say yes, but only if the business opportunity: fits with your mission, vision and values; fits with your strategic plan; doesn t pose risks to your reputation; provides a social return on investment; and provides a financial return on investment with minimal risks.

31 Reflection Based on: The discussion of traditional vs. entrepreneurial thinking The success stories The lessons learned, and The best practices How do you feel, and what do you think, about your organization moving forward into the planning phase for a social enterprise?

32 The Pilot Project Overview Amount & Duration Focus of the Project Ontario Trillium Foundation Expectations Funding Reporting & Timelines Work Plan & Process Roles & Responsibilities

33 Amount and Duration: Request ID#: Grant Amount: $163,000 over 18 months Conditions: None

34 Project Focus: - Strengthen capacity and build sustainability in nonprofit adult literacy programs - Support six (6) pilot member agencies - Complete research, planning, organizational development and fund development stages of social enterprise for each pilot agency - Create tools, templates, and a support mechanism for other member agencies of LLO - Ultimate goal - more LLO member agencies can successfully implement social enterprise to support the agencies programs and missions.

35 Expected Results - #1: Participating member agencies developed their social enterprise venture and now have strengthened capacity and stronger likelihood of sustainability.

36 Performance Indicators - #1: 1. a) Organization assessments are completed for each pilot site. b) Recommendations are made to pilot sites regarding board development/training needs. c) Training is delivered to all 6 pilot sites training is unique to each site based upon identified training needs. d) Market research for each site is completed.

37 Performance Indicators - #1: 1. Continued e) Target market for each site is identified. f) All 6 pilot sites have a business plan by end of 18 months. g) Potential financial resources are identified for pilot sites. h) Marketing tools to attract funders are developed for each pilot site.

38 Performance Indicators - #1: 1. Continued i) At least one proposal is written for each pilot site. j) Product concepts are validated, pricing schedules developed, tracking systems and procedures developed k) Staff at all 6 pilot sites are trained to implement the business plan.

39 Performance Indicators - #1: 1. Continued l) Pilot sites communicate on an ongoing basis throughout the project via a web communications platform. m) A bank of electronic resources and reference list are developed for electronic access through LLO s website.

40 Expected Results - #2 Tools, templates and mentorship to support future social enterprise ventures are available online.

41 Performance Indicators - #2: 2. a) Concrete models of business planning, capital raising and implementation stages of social enterprise in adult literacy programs in Ontario are developed. b) Samples are posted through a portal on the LLO website for member agency access.

42 Expected Results - #3: Pilot site agencies serve as mentors to other agencies wanting to explore potential for and/or set-up social enterprise ventures.

43 Performance Indicators: 3. a) All 6 pilot sites received training in mentorship responsibilities and skills. b) All 6 pilot sites are ready and agree to become mentors.

44 Expected Results - #4: Stakeholders in the adult literacy sector have access to the results and recommendations from the evaluation of this pilot project.

45 Performance Indicators - #4: 4. a) The final project report is posted on various websites, including LLO, AlphaPlus, CLO, OLC, ONLC, and distributed to member agencies via .

46 Additional funds may be needed: Youth internships Local initiative funding Foundations and Corporations project funding Provincial and Federal programs to be identified Job Creation Partnerships (Service Canada) potential for pilot sites when ready to implement social enterprises Sources of venture capital (loan)

47 Report Schedule: Letter of Agreement - Due Dec. 21/07 Progress Report - Due Dec. 12/08 Final Report - Due Aug. 1/09

48 Work Plan & Process: Project staff have been hired Advisory Committee is in place Work Plan is complete o o Six Phases of Social Enterprise Development Checklist with tasks to complete for each phase Interacting with each pilot group to discuss the work plan, roles and responsibilities Completing orientation and organizational needs assessments of pilot sites Supporting pilot sites to form work teams (committees)

49 Six Phases of Social Enterprise Development Process Participation Timeframe Phase 1: Orientation All Board members Senior Staff members February March 2008 Additional staff as desired Phase 2: Readiness Assessment & Training/ Support All Board members Senior Staff members February March 2008 Phase 3: Idea Generation Phase 4: Market Research All Board members or Social Enterprise Team Senior Staff members Additional staff as desired To be Determined April May 2008 May September 2008 Phase 5: Business and Marketing Plan Development To be Determined October 2008 February 2009 Phase 6: Implementation Planning To be Determined March - June 2009

50 Phases One & Two: Purpose Phase 1: Orientation To provide an introduction to social enterprise for each Pilot Site s Board of Directors and Executive staff person. The orientation session will take approximately 3 hours. Phase 2: Organizational Readiness Assessment & Follow Up Training/ Support To determine the readiness of each Pilot Site to participate in the development of a social enterprise. There are two outcomes of this phase. 1. The Pilot Sites will determine whether they will each move forward with the project. 2. Each Pilot Site will be assessed in regards to their strengths and weaknesses in pursuing social enterprise. Training opportunities and resources will be provided to Pilot Sites based on their individual needs.

51 Evaluating Organizational Readiness You need to think about the time, talent and resources you have available for social enterprise development You need to identify some key sources of information You need to look at relevant connections that you have in your community It is important to do all these things because groups becoming involved in social enterprise that have not honestly appraised themselves can unintentionally create damaging consequences

52 The Social Enterprise Challenge You are working within a sector that thinks and works differently than non-profit Organizational issues can be a major barrier A cultural shift is required as you move to an entrepreneurial approach Pressures increase in terms of staffing, financing, and maintaining existing programs and services

53 Organizational Context Age and development stage of the organization Size of the organization Type of work the organization does Cultural or ethnic identity of the organization Environment in which the organization functions

54 Organizations Operate as Complex Systems A change in any one part of the system affects other parts and the functioning of the whole. Examine each component separately in relation to the other components Examine each component within the organization s overall context

55 Planning is Important ``No one would start a major journey, with all the time and costs involved, without assessing their capacity and doing some basic planning!`` Community Wealth Manual

56 So How will you know if you are ready to move forward with social enterprise?

57 Assessing Capacity An online survey will provide all Board Members and senior staff the opportunity to indicate their opinion regarding the current status of the agency, in terms of board and staff functions, operations, programs and community environment and relations.

58 Brainstorming What gaps do you see in your community? What assets/resources do you have in your community that you may be able to tie into? (human and material) What assets/resources do you have within your organization? (human and material) What some of the challenges for social enterprise development in your area? (resources (or lack of them), opportunities, attitudes and level of community support) What is the purpose for social enterprise development for your organization? What is the end result or goal for your social enterprise? What type of evaluation criteria might you use?

59 Sample Evaluation Criteria Serves mission of organization Low start-up costs Can begin in less Time requirement Risk level Competition Market need

60 Team Involvement Board members (and staff) need to work together, share information, and make decisions Everyone in the organization must be prepared to identify, manage, and take measured risks Starting up a business can raise the level of board discussion and even bring in new board members with new skills

61 Team Work Has Benefits Opportunities to interest new volunteers A support system Group responsibility for actions Less burnout Stronger strategies and end results

62 Caution Working Alone is Tough Working alone can cause: Limited perspectives Lack of connections to important resources Burnout from lack of support Slow progress Weaker strategies and end results

63 What will the Social Enterprise Team do? Regular meetings as a team will provide: Time to review the progress of the project Opportunity to talk about what is working and what is not working and why! Opportunity to share and discuss solutions Opportunity to identify resources and contacts Support to the pilot lead contact Recommendations to the Board

64 Who should the Social Enterprise Team include? Every project needs a champion (likely the E.D.) Every team needs a chairperson Every team needs people with specific skills: o o o People who have experience in starting up a small business/growing a small business People with expertise in research, marketing and business planning People who know your community and what it needs

65 The Social Enterprise Champion You need an entrepreneurial thinker to start a business You need someone who will take responsibility for the work of the project and is invested in the outcomes You need someone who will get things done, and get them done well This is usually a staff person most likely the E.D. This person needs the support of the Social Enterprise Team

66 What Commitment is Required? Monthly meetings (1-3 hours) Additional Time & Activities: o Time to review s, documents prior to and between meetings o The ability to commit to individual and group tasks and deadlines determined at the meetings o A wide angle lens awareness of opportunities and and potential problems o The energy to commit and to engage other supporters as needed

67 Recruiting the Social Enterprise Team Identify candidates Be prepared to provide detail in terms of the project, the activities, the timelines Know your candidate how their skills fit the team needs Recognize that membership on the Social Enterprise Team has benefits learning, leadership opportunities, the joy of contributing to something important to the agency, a sense of accomplishment, and the fun!

68 What Does this Mean for You? We have provided a Committee Profile sheet to help you organize your Social Enterprise Team! Remember: It is possible for one person to be listed in more than one role on the committee.

69 Resources The following resources were used to develop this presentation: Websites Books The Canadian Social Enterprise Guide Social Entrepreneurship: The Art of Mission-Based Venture Development Social Sector Entrepreneurship and Innovation

70 Other Resources Social Edge Social Enterprise Alliance Centre for Community Enterprise Canadian Centre for Social Entrepreneurship The Canadian Social Entrepreneurship Foundation

71 Other Resources Laurel Centre for Entrepreneurship Centre for the Advancement of Social Entrepreneurship Ontario Council of Alternative Business (under construction) Voluntary Gateway HRSDC Social Capital Partners Social Enterprise Reporter Toronto Enterprise Fund