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What is a social enterprise?

Is it a way of work or the type of work?

Social enterprises are businesses with primarily social objectives whose surpluses are reinvested in the community, rather than being fed back into its shareholders and owners. For these businesses, social impact and profit motives work together to achieve complementary outcomes of a triple bottom line with economic, social and environmental accountability.

Social enterprises tend to be:

  • Purpose-driven organisations that aim to deliver positive impact

  • Utilise business models as a  tool to help solve social, cultural and environmental issues

  • Profit-maximisation is not their primary goal, but is a means to achieve the impact they envision

What gives an organisation the right to call themselves a “social enterprise”? Can a business that has ethical and responsible business practices be one? What about a charity? 

What a social enterprise looks like

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Case A (‘Do Good Jobs’ based in NZ)

A business with the purpose of providing employment opportunities by connecting individuals to potential employers that promote ethical business practices.

Case C (‘Eat My Lunch’ based in NZ)

Runs a “buy one, give one” model. For every lunch an individual or a company purchases from this social enterprise, they will donate another lunch to in-need students.

Case B (‘Dignity’ based in NZ)

Runs a “buy one, give one” model. For every box of sanitary items a company purchases from this social enterprise, they will donate another box to schools and youth organisations in need.

Case D (‘Teach First’ based in Great Britain and also in NZ)

A teaching and education leadership programme which creates initiatives for teachers to accept roles in secondary schools serving a low-income community over two years, by paying for their Masters qualification.

 Interview with Dignity

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Dignity provides a women’s wellbeing initiative of which corporates can purchase a subscription to have sanitary items provided at their workplace and in turn support a buy one, give one model to provide sanitary items to girls in secondary school currently going without.

Their customers, including ANZ, Cigna, Xero and Flick Electric, are delivered our Dignity package which includes Organic Initiative sanitary items (whose products decompose in 5 years as opposed to 500 years for conventional products), display canisters and posters in the female bathrooms to provide for free to female employees.

What was your primary motivation operating as a social enterprise?

From the very beginning, Dignity was always going to operate as a social enterprise.  The structure of a social enterprise suited what we wanted to do and achieve when we started Dignity - using a financial model to operate our business for a social purpose.

We have had to explain what a social enterprise is to many people.  As there is no legal structure for a social enterprise in New Zealand and it is a relatively unknown way of operating a business, there are always lots of people asking what it means to be “social enterprise” and how you become a “social enterprise”.

We recently wrote a blog post about the process we undertook to get certified as a social enterprise by the Akina Foundation,  an impact development organisation. You can read more about why Dignity decided to get accredited by the Akina Foundation in their blog post here.

Would you work with any business that approached Dignity or are you conscious of not being a “box tick” for companies that are otherwise operating in a manner you consider to be unethical or otherwise not aligning with Dignity’s values?  In this respect, what do you look for when deciding whether or not to partner with a business and provide goods and services to them?

There have been companies we have to discuss.  It really just came down to a judgment call based on the vibe we got from the company.  With Dignity, we want a genuine partnership with our customers - we are not just wanting to sell a product and that's it.  We want our customers to be our partners in what we are trying to achieve, so if we don't think a company wants a genuine partnership with us, we need to consider whether we want to do business with them.

How do you think social enterprises can change the business landscape in New Zealand? 

We believe all businesses can operate as a social enterprise and in the future, all businesses will be social enterprises.  All charities will need to adapt to operate with a financial model and all companies will need to be purpose driven. Businesses will need to adapt to the public’s expectation of what a business should be and how a business should operate - all businesses will need to have a purpose other than profit or people will switch off.  

However, you are starting to see businesses calling themselves “social enterprises” when they are not.  Businesses are realising that consumers want to spend their money with businesses that have a purpose other than profit, and are using. And because there is no legal structure for a social enterprise in New Zealand, there is not much you can do when a business calls itself a social enterprise purely to gain customers.

Dignity puts a lot of energy into reporting on the impact they are having.  Why is reporting so important to you and do you think all businesses should make it a priority?

From the very beginning, we knew that if we wanted to articulate and prove our value, we had to be able to measure it.  We do this by conducting surveys of the female employees at our corporate partners and then provide feedback from these surveys to the corporate partners themselves.  We also report on the impact we are having in the schools and communities we support.

 

 Why you may choose to work with a social enterprise

  • Services offered by social enterprises are driven by taking into account the impact there is elsewhere. If these values are aligned to yours and your customer base – this is an organisation that will help actualise your values alongside offering you services and products.

  • Many also find that the services and products that social enterprises offer can be customised better to suit your unique business need due to social enterprises placing a greater value on “doing good”. 

  • The biggest advantage of working with social enterprises is cost effectiveness. The solutions offered by these organisations are far more reasonable when compared to the same service provided by a profit-making organisation. 

 
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 How you can work with a social enterprise

You and your business can propel change across the NZ economy and drive better social, environmental and ethical outcomes. According to Register NZ, there are 2,500 social enterprises in New Zealand alone. But how can you work with them?

  • You can support social enterprises by raising awareness, creating sponsorship opportunities and offering your SME knowledge. Opportunities to engage with social enterprises include:

    • Hosting workshops and drop-in seminars during lunch at your business where you invite social enterprises to explain their mission and their organisations. You can play a big part in spreading awareness across your community by giving your employees access to these messages.

    • Spreading awareness and knowledge through social media and in events

    • Providing social enterprises access to your specialist knowledge and experience

    • Providing social enterprises access to sponsorship opportunities 

  • You can also choose to integrate like-minded and purpose-driven enterprises into your supply chain and procurement process. This is sometimes referred to as ‘social procurement’. Opportunities to engage with social enterprises include:

    • Review your current suppliers and the need for future suppliers. Chances are, out of the 2,500 social enterprises existing in New Zealand today – one of them could provide you with the same services and achieve a more ethical outcome and a positive impact. 

To find a social enterprise that suit your business needs and values, consider using the Impact Initiative. This organisation helps connect social enterprises with buyers, via a social procurement marketplace and a social enterprise certification process.


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