September 29, 2017; The Spinoff
Last week, the Social Enterprise World Forum (SEWF) was held in Christchurch. Leading social entrepreneurs from around the world attended. The Spinoff assembled a panel of four New Zealand-based leaders to discuss “the role social enterprise has in shaping the future of New Zealand’s economy and capitalism in general, the power of the Māori economy given its social values, the political role of the sector, and the massive demand for a more thoughtful consumerism.”
At the conference, Spinoff’s Simon Wilson interviewed four panelists: Alex Hannant, chief executive of the Ākina Foundation, which supports social enterprises; Lisa King, the founder of the two-year-old Eat My Lunch, an online food delivery service which operates on the “buy one, give one” principle benefiting poor students; Michelle Sharp, CEO of Kilmarnock Enterprises, which has employed and supported people with intellectual disabilities for 60 years; and Nick Wells, chief executive partner at the law firm Chapman Tripp.
NPQ has addressed social enterprise regularly through the years, most recently here, and sometimes critically. Unfortunately, definitions of social enterprise are famously fuzzy. Depending on who employs the phrase, social enterprise can mean anything from a nonprofit-owned business that uses the business to convert clients into co-creators of their own livelihoods to a for-profit business that claims, sometimes without any third-party verification, that it is doing “social good.”
Hannant tries to give some definition to the term. In Hannant’s view, there are three types of social enterprise. “The first one,” Hannant says, “would be that you have a business which creates profit which then enables you to then fund the delivery of other services or products.” An example would be King’s Eat My Lunch—in King’s words, “a food delivery company where people order their lunches online to have fresh healthy lunches delivered to them at work. For every lunch they buy, a lunch is also given to a Kiwi [New Zealand] kid in a decile school [school serving a low-income population] who would otherwise go without.”
Hannant also outlines two other types:
The second model would be where the impact is as a result of the people working within the enterprise…something like Pomegranate Kitchen, a startup in Wellington who also are catering social enterprise, but in that case, it’s around providing employment integration, language training, livelihoods to former refugees who use their strengths to create food of Middle Eastern cuisine, and then that’s sold. Then the third bucket is where the impact is actually as a result of the direct service so there’s an innovation which is actually overcoming a market failure or just simply doing something different in a better way.
For nonprofits, social enterprise can be a powerful tool. This is less about the money per se (since it can be hard for a nonprofit to earn money from a social enterprise) and more about the autonomy that the unrestricted funds it generates can provide. As Hannant says, “If you’re not dependent on the generosity of your funders, you’re more likely to be able to innovate into the problem.”
Sometimes, too, social enterprise has been a nonprofit survival strategy. As Sharp of Kilmarnock Enterprises, says, before they created their business, “We had one contract which was a commercial contract, we had one contract which was government funding and the rest was donation and grants and things like that. When we lost that commercial contract, it really made us think about how could we become more self-sustainable, how could we ensure our future, how could we put that into our own hands.”
Additionally, Hannant points out that social enterprise can be a more powerful mechanism when ownership is shifted in a meaningful way, so that the community truly takes ownership of the business and gains direct access to the means of its economic sustenance. As Hannant says:
There’s an empowerment agenda here, and I think this is really relevant to the Māori economy and also to community enterprises across the country…rather than being the recipients of services and generosity it’s about ownership of assets, it’s about design and delivery of their own services and community has actually taken development into their own hands.
As Wells points out, New Zealand’s indigenous Māori community plays a major role in New Zealand society. While some in the United States may picture New Zealand as a white settler–dominated society, this view is not completely accurate. Māoris, Wells estimated, make up 15–16 percent of the population and generate about $50 billion worth of annual economic activity. All told, people of color (the largest concentrations after the Māori are Asian and other Pacific Islanders) constitute about a third of New Zealand’s population according to New Zealand government statistics, making New Zealand’s population nearly as diverse as the United States, which is 61.3 percent white as of 2016.
Wells adds that the social enterprise ethos of community reinvestment fits Māori culture. Social enterprise, Wells says, fits the “Māori economy because on the Māori economy side, we say that we are by our very nature social enterprises because we take our profits that we earn, and we reinvest them back into social outcomes, be that te reo, be that health, be that housing and education in particular.”
Can social enterprise actually impact society at a systemic level? The jury is out on that one. Hannant, however, expresses guarded optimism. “No one organization is going to solve a systematic problem,” Hannant says, “but if you have a whole movement of organizations taking off small parts of the system working together collaboratively in different places and different cultural backgrounds with different passions and different networks, then you will start to shift the dial.”—Jim Schaffer and Steve Dubb