Impact and profit
Noa Lodeizen told her story about Young in Prison, a project that was initiated because of a failing prison system. It is focussed on integration and active in six countries. People who leave prison get the opportunity to become an entrepreneur. ‘But the impact is much higher than expected: local villages want these young entrepreneurs.’ To further develop an investor is needed that believes in impact first. Business coaching is needed as well.
Helmer Schukken is a business consultant at Social Impact Ventures NL, a new investment fund in The Netherlands. It is € 40 million venture fund for Dutch-based social enterprises in the scale-up phase. Schukken believes in the power of entrepreneurship. ‘Any business should focus on impact and profit. Profit should not be used for other things: the management should focus on one thing only.’ A good example of a charity that grew into a business is 1% Club, an organization that mobilises time and knowledge for do-good projects. They wanted to be less dependent on subsidies and had the ambition to attract capital. So they developed from direct crowdsourcing to corporate/municipal crowdsourcing. One of the lessons learned was that turning into a social enterprise has to make sense. You have to explain it well and should be aware that timing of pivot and attracting investments are fiscally delicate.
Several tools to solve social problems
When asked if The Hague Process is targeted at Europe only, Prince Constantijn replied that that is definitely not the case. ‘It is about good businesses, wherever in the world. In my opinion development support could be more sustainable if invested in businesses instead of financed through grants.’ This triggered Marjan Sax, an experienced philanthropy consultant in The Netherlands. Aren’t we looking down at grants? After all, not all NGO's are able to make money. Schukken admitted that not every issue can be solved in a commercial way. But maybe a hybrid solution can be found and grants can be very useful. ‘Some businesses start with subsidies’, Prince Constantijn complemented. ‘But we need to look for other ways to get income.’ Prior also cherishes other means: ‘All tools should together be used to solve social problems: grants, subsidies and investments.’
Laura van Deelen of the Dutch Hearing Foundation gave an example of how knowledge of a charity can be turned into a business model. The production of a digital hearing test was positioned outside the foundation. That way business could be started, but it took a shift in thinking. Fiscal lawyer Ineke Koele claimed that there is no specific legal vehicle for social enterprises. Shouldn't public interest be first and foremost? Cliff Prior responded that the concept of social enterprise works all over the world. You just have to look at the country’s culture what incorporation suits best. Prince Constantijn stressed that public interest is not the same as non-profit interest. ‘You have to find a mechanism which is profitable for all, as for instance Tesla did. Our mindset is supply driven, but we should think more demand driven: what value do you add for your customers?’ And as Nava Hinrichs put it: ‘You need to step outside your comfort zone.’
gerelateerde items