Skip to main content

Phi Asset Managers

Lead With Unreserved Benevolence!
Home  About Us  Contact Us  News  Encyclopedias  Museums   Philosophy of Business  Quantitative Strategies  Site Map  Member Login   
Social Enterprise:
What is a Social Entrepreneur?
Social Entrepreneurs are the equivalent of a business entrepreneur but they operate in the social, not-for-profit sector building 'something from nothing' and seeking new and innovative solutions to social problems.

* Their aim is to build 'social capital' and 'social profit' to improve the quality of life in some of the most 'difficult' and 'excluded' communities.

* Their work reaches the parts of society other policy initiatives do not touch.

* They identify unmet social need and generate solutions based upon a close reading of the views of those most directly affected.

* They normally work in creative partnership with central and local government, business, the churches, charities and other local and national institutions and they are skilled at constructing such partnerships.

* They have frequently achieved ambitious projects and far- reaching change, in the most unpromising circumstances and with minimal resources.

* They recognise, encourage and employ skills from different faiths, cultures, traditions and backgrounds bringing them together in new and creative ways to address practical problems.

* They are skilled at redirecting, using and regenerating underused, abandoned, redundant or derelict human and physical resources (skills, expertise, contacts, buildings, equipment, open spaces).
What are the Types of Social Enterprises?
1. Social purpose businesses -- nonprofit, for-profit, a public/private or some combination of the three. These businesses can be new or derived from an existing program:

- "Affirmative" businesses designed specifically to provide permanent jobs for people who are disadvantaged,

- Mission-driven product or service businesses delivering services directly to their users, for example, housing and food services for program clients.

2. Earned income businesses that have an indirect impact on a social need:

- Revenue-generating activities started by nonprofits unrelated to their mission typically created from the organization's under-utilized assets (such as facility downtime, accounting expertise and copyrights) or as conveniences for its clients or patrons (gift shops, parking lots, cafeterias and so on).

- "For-benefit" companies not directly associated with a nonprofit, but created expressly to generate profits that will then be distributed to one or more nonprofit entities (for example, Newman's Own).

3. Business partnerships between nonprofits and for-profits:

- Cause-related marketing, --"Taste of the Nation" (American Express and Share Our Strength)

- Cause-related purchasing,--Boeing's "Philanthropic Work Program" out-sourcing fabrication work to nonprofit employers of the disabled.

4. Other earned income strategies, business ventures and partnerships-- Public-private partnerships for community development (CDC's, CDFI's), entrepreneurial efforts by government agencies (Seattle's Housing Levy that leverages city funds for low and moderate income housing with private and foundation funds), joint ventures between forprofits and nonprofits.
What is Venture Philanthropy?
Venture philanthropy has grown out of the desire of individuals and foundations to use a venture capital model to strengthen the capacity of charitable organizations. Jed Emerson of the Hewlett Foundation et al (Roberts Foundation, HBS, Stanford B-School) has characterized traditional philanthropy as "Transactional Philanthropy", a philosophy of giving that spreads available resources as widely as possible to as many agencies as possible. This usually results in a plethora of one-year grants and a primarily program oriented giving focus that neglects building up organizational infrastructure.

Venture Philanthropy focuses on building up organizational capacity using multi-year grants and focused technical assistance. Its donors look for entrepreneurial potential within the organizations and delivery of focused outcomes relating to both program delivery and increasing organizational sustainability.
What is Social Cause Marketing?
Cause-related marketing [sometimes referred to as social cause marketing or social marketing--editor] refers to a commercial activity in which companies and nonprofit organizations form alliances to market an image, product or service for mutual benefit. Some companies also extend their relationship with an organization or a cause beyond marketing, integrating it with other company activities, such as community involvement, employee volunteerism or corporate philanthropy. Cause-related marketing campaigns vary in their scope and design, the types of nonprofit partners, and the nature of the relationships between companies and their marketing partners. In the most common type of relationship, a company might donate a portion of each purchase made by its customers during a specific period of time to the nonprofit entity. However, there are several variations on this theme and not all CRM campaigns channel money to nonprofits; some engage principally in educational or awareness-building activities.
What is Social Return on Investment (SROI)?
It is our contention (The Roberts Foundation) that the true impact of the collective work taking place in the nonprofit sector is under-valued by those both within and outside the sector due to an absence of appropriate metrics by which value creation may be tracked, calculated and attributed to the philanthropic and public "investments" financing those impacts.

Furthermore, while SROI is important to outside funders, it also lays the foundation for enabling publicly funded nonprofits to specifically document the extent of the social cost savings generated by their efforts-cost savings that in this day of "pay for performance" could be directly channeled to the nonprofit from public sector funders. An SROI analysis creates a powerful tool for social sector managers to use in advocating for financial support of their work.

As the nonprofit sector continues to compete for limited charitable dollars it becomes increasingly important that we be able to understand not simply that a program is a "good cause," but rather that its social returns argue for increasing our investments in their work.

In an effort to capture the social return on investment (SROI) of social purpose enterprises, REDF is working to publish a set of SROI Reports on each of the enterprises in the REDF Portfolio, an SROI Methodology Paper, and an SROI Web Product. Each of these publications/products is described in greater detail below. REDF expects these publications will be available for purchase and for download from the REDF web site in early 2001.
What's the Difference Between Social Purpose Business and Socially Responsible Business?
Social purpose businesses use market forces to create a business where the principal purpose is social good. A socially responsible business on the other hand, tries to make money and then do good, either by contributing to the community, reducing waste and acting in an environmentally sustainable manner. But success is still measured by its profits.
Are There Two Universes of Social Investing?
There are really two areas for investing in social purpose businesses. Most nonprofits are looking to diversify their funding sources and some are exploring generating either some (as opposed to none) or increased earned income from business type ventures. This earned income would be supplemented by the traditional grants plus newer areas of development such as endowments, individual donation programs, social cause marketing and licensing, other corporate partnerships and etc. in order to better insure a financially sustainable organization.

Some nonprofits are seriously trying to become self-sufficient. This means self-sufficient from earned income not from some form of philanthropy. Some of the Roberts Foundation www.redf.org portfolio organizations are headed in this direction. Pioneer Human Services in Seattle is also basically a self-sufficient organization www.pioneerhumanserv.com. This type of organization tends to attract a diffferent investor--one who is looking for a serious financial return on his investment, not just a social return
Social Purpose vs. Socially Responsible Part 2
Medium Growth Social Enterprises

Existing primarily to address social or environmental issues, these social ventures include either for-profit businesses that aim to be profitable over a longer time horizon than high growth businesses, or are nonprofits that aim for self-sufficiency through earned income activities. Social Return on Investment is the most important judging criteria for Medium Growth category businesses, followed by financial returns and other criteria. These enterprises will be attractive to venture philanthropists, private foundations, social venture funds, and individual donors/investors.

High Growth Social Enterprises

These businesses aim to be venture-capital like investments, with break-even and profit coming in less than 5 years, while also integrating social and/or environmental objectives into their mission and practices. Financial Return on Investment is the first judging criteria for High Growth category businesses, followed by SROI and other criteria. These businesses will be attractive to social venture funds, angel investors and venture capitalists who expect both financial and social returns.
What areVirtual Teams?
Teams of people working together from distances and without primary face to face interaction can still accomplish a great deal while building virtual communities of interest. E-mail and video conferencing can be used to establish worldwide virtual communities to formulate solutions to worldwide problems. Virtual teams can use e-mail groups such as Yahoo and Topica for focusing discussions and assigning tasks to clarify and solve problems, Some examples include Canadian Social Entrepreneurs and Social Entrepreneur on Yahoo! Groups.
What is the Virtual Office?
The virtual office idea camefrom the convergence of technological innovation and the Information Age. The concept has roots in the Industrial Revolution, where parallels to current work styles, specifically working from home, have been drawn. The term was first used in a 1983 airline in-flight magazine article about portable computing. The virtual office concept is an evolution of the executive suites industry. However, the inflexibility of an executive suite lease doesn’t work for many business models and helped spur the virtual office concept. The first commercial application of a virtual office occurred in 1994, when Ralph Gregory founded “The Virtual Office, Inc" now known as Intelligent Office, in Boulder, Colorado.
What is the Fourth Sector?
For-Benefits are an emerging new class of organization. They are driven by a social purpose, they are economically self-sustaining, and they seek to internalize their social costs by being socially, ethically, & environmentally responsible.

Like non-profits, For-Benefits can organize in pursuit of a wide range of social missions. Like for-profits, For-Benefits can generate a broad range of beneficial products and services that improve quality of life for consumers, create jobs, and contribute to the economy. For-Benefits seek to maximize benefit to all stakeholders, and 100% of the economic profits they generate are invested into advancing social purposes. Because of their architecture, For-Benefits can embody some of the best attributes of other organizational forms. They strive to be democratic, inclusive, open, transparent, accountable, effective, efficient, cooperative, and holistic.

Social enterprise magazine

Ethics Review of Chicago based Boeing