THE BATTLE OF THE SEXES
WHO IS THE BETTER SOCIAL ENTREPRENEUR - WOMEN OR MEN?
MD’s SPEAK OUT SERIES
WES News Team 20 June 2010
There are more than sixty–two thousand social enterprises in the United Kingdom of which more than a quarter are run by women. Words from a recent BBC Radio Four Show, Woman’s Hour, where there was talk on social enterprise, hidden social enterprise and social entrepreneurs. All this may sound a little baffling, so firstly, what is social enterprise? “Agreeing on a definition is a bit like nailing jelly to a wall, so we probably can’t agree on one. However, most important is that it is a way of running your business so that you can meet your social or environmental or employment objectives. So there are three things that are critical: the first is that you, as the founding entrepreneur, are motivated by the desire to do something good to make a difference – socially, environmentally or in terms of employment. The second is that you use the profit or surplus that you make to run your business to meet those objectives. You don’t need to use all of it. There is disagreement around this, but the usual thing is that you need to use 50% of your profit, or reinvest 50% of your profit in whatever your social goals are. And then the third thing you need to have is an independent revenue stream so that you are not entirely dependent on donations and grants from government” that's the word from Rebecca Harding, Managing Director (MD) of Delta Economics. This forms part of our 'MD’s SPEAK OUT' SERIES where the World Entrepreneur Society (WES) will interview top MD’s about their positions on small medium enterprise (SME’s), investment and much more….
HIDDEN SOCIAL ENTERPRISES
Dr. Harding, who has done research into hidden social enterprises, argues that in business you have to make money as social enterprise is not a charity organisation, “You have to make money. The key word is enterprise and so what we are looking at are companies that are working for profit effectively and are able to make money and use that for social, environmental or employment purposes and there are a lot of them. You know if you look in a mainstream business entrepreneurial population, what we found was that about a fifth of those companies are what we call hidden social entrepreneurs, in other words they are there, and they are for profit. The government doesn’t necessarily know about them; nobody knows about them but they are set up according to the three very important criteria”. Sophi Tranchell, MD of Divine Chocolates argues that the company was set up according to this model. “Divine Chocolates was set up in this way, because we have a mission to improve the livelihoods of cocoa farmers in West Africa by establishing their own company in the UK market which puts them high up the value chain. Until we existed, farmers only earned the money from selling raw cocoa and what they are now earning is the share of the profits, but that has lots of implications because in our supply chain we pay a fair-trade price and a fair-trade premium for the cocoa. We also dedicate 2% of our turnover to recognising that working with cooperate of cocoa farmers in Ghana and there are forty-five thousand of them in fourteen hundred villagers”. So what do these villagers of Ghana do with their profits”? Put it simply as Tranchell states “build schools, invest in their community”. Rebecca Harding provides another example of a successful social enterprise in the UK, the Old Vic Theatre, "it’s a brilliant example of a social enterprise as they have to make all of their revenue from the sales of tickets. They then use some or a proportion of that actually to help people from disadvantaged backgrounds to go to the theatre and also to run drama workshops for young kids in the area”. So how would one start up a social enterprise? Tranchell said in order for social enterprises to succeed they need to have good partnerships, while Harding argues that “my take would be to think about how you are going to actually make revenue and keep the thing going; how are you going to make it sustainable? That is, having an appropriate business model and making sure you stick to it”.
WOMEN VERSUS MEN
It was said in BBC Woman’s Hour that women are more likely to run social enterprises than mainstream business. However, most social enterprises still run by men. Harding argues, “Something very interesting is going on there because actually, if you look at the data, women are more likely to set up a social enterprise, but it is men who are more likely to become the owners after a three to four year period…we could talk about women and social enterprise…[and]…start saying, women care more, and women are in these types of environments more. Very simply an entrepreneur wants to fix a problem, a social entrepreneur fixes a social problem or environmental problem that you see around you. Statistically woman see more problems around them because they likely to be in situations where they are taking their kids to school. They come up against it and they think of an enterprise to find a way of solving them”. So are men just not aware of social problems and worry about their profit margins? Harding argues, no. This is indeed perhaps a controversial issue. Who is more philanthropic; women or men? Would you give some of your profits to find solutions for a social problem? Have your say, and as always join us next week for the next instalment of the “MD’s SPEAK OUT SERIES”.