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September 30, 2009

Social Economy 101 – India

Filed under: social economy 101 — benmetz @ 4:23 pm

Here’s part three of my social economy 101 series, this time looking at India.  It’s fascinating stuff!

The social economy in India…

The social economy in India has its roots in the Ghandian civil rights movement.  Historically, for this reason, it has been focused around areas of advocacy for policy change as well as land rights and human rights.  It is largely grant funded and not for profit based, in part due to this legacy and in part due to current legal structures preventing blended value / social enterprise models from coming to the fore.

In the late 1980’s the sector started to become more professionalised.  Much of these early efforts were led by Pradan, an organisation established in 1983 by a group of Indian professionals who realised that leveraging their knowledge and skills in the charitable sector could powerfully enhance the lives of the poor.  Throughout the 1980’s and 1990’s Pradan became a huge receptacle of people from the best universities coming into the sector.  With this influx of high level talent people started to hypothesise that you needed to work with a wider array of approaches than the traditional grant funded not for profit organisations.

While there are no statistics on the size and scope of the social economy in India there exist estimations for the whole of the charitable sector which, if anything, allude to the potential for social economy development should the right incentives be put in place and a positive legislative environment develop.  It is estimated that there are between 1.2 and 4 million charities in India, with up to 50% of these being unincorporated.  Turnover is estimated at $4.7 billion with only around 500 charities having turnovers of above $100,000 per annum.  Around two million people are employed in the sector.

A key issue identified in India, as in many other parts of the world, is the need for missing middle financing for existing and emerging social economy organisations.

As is the case with South Africa the social economy in India is fundamentally constrained by regulatory and legislative structures that prevent equity or equity type investments being made into organisations incorporated for public benefit. Thus the social economy appears to be adopting for-profit structures that run in parallel to, but legally cannot be linked with, charities.

As with South Africa Ashoka is the longest established social economy support organisation having been founded in India in 1981 and having elected 262 individuals into the Ashoka Fellowship.  Vineet Rai, a longstanding Indian social entrepreneur and Ashoka Fellow, has been instrumental in establishing one of the most important clusters of social economy support organisations in the country including: Aavishakaar, Intellecap and Sankalp.

Social Economy 101 – South Africa

Filed under: social economy 101 — benmetz @ 11:25 am

This is part two of a series of short posts looking at the social economy in a number of countries around the world.  this time it’s South Africa.  As the series develops we’ll start to see some themes emerging, notably this perennial issue of what’s being termed “missing middle finance”…

A snapshot of the social economy in South Africa

According to the South African Department of Trade and Industry as of February 2009 there are 21,573 registered not-for-profit organisations in the country plus roughly 2,000 new registrations per year.  However, as far back as 2002, the South African Non-Profit sector study – a multi university collaborative survey and study – estimated in excess of 98,000 not-for-profit organisations, turning over more than R13.2 billion and with over 50% of these organisations existing in the more informal space and being predominantly community based.

Conversations with key sector leaders paint a picture of a social economy where individuals and organisations don’t yet see themselves as social entrepreneurs or social enterprises.  The South African third sector overall appears to be suffering from a lack of motivated and inspired individuals as well as structural legislative and regulatory barriers that prevent social economy activity from developing.

The current South African legal system allows for three distinct types of organisations to exist: closed corporations, trusts and collectives. As a consequence of this legislative framework hybrid social enterprise models are severely restricted in their ability to operate.  This major, structural, barrier has prevented social businesses from becoming established and perpetuated the historically polarised state of affairs where you can either be a profit maximising organisation or a charity. The International Labour Organisation has acknowledged this barrier to development and is funding a major study, being led by the University of Johannesburg, to explore these issues and work with government to change legislation to allow and even promote hybrid models to come into existence.

The social economy is in the earliest stages of its infancy in South Africa with very little in the way of infrastructure support available or legislation in place and therefore very few practitioner organisations at any stage of development or scale.  Support to South African Social Entrepreneurs is few and far between. Ashoka is the oldest and most established player in the social enterprise and social entrepreneurship space, being present for 17 years and having elected 130 Ashoka Fellows during this time. While additional support infrastructure is beginning to become established in South Africa there are no real signs of a similar development in the provision of finance to the country’s emerging social economy.

September 28, 2009

Social Economy 101 – UK

Filed under: social economy 101 — benmetz @ 2:11 pm

The following is the abstract from part of a piece of work I’m just completing – mapping the social economies of a number of countries across the world.  It’s by no means comprehensive, certainly not in this abridged form, but I think it’s a nice little vignette of the UK social economy.  Collectively I reckon they’ll make a good series and justify a new category on my blog – social economy 101…

Social Economy 101 – UK

Social enterprise in the UK has a long history, from the cooperative movement and mutual organisations of the nineteenth century to the long-standing trading activities of many charities.  The mid 90’s saw a rebranding of cooperatives as social enterprise take on a life of its own, leading to the building of the current movement and the government embracing the concept.  In 2002, the government launched a Social Enterprise Strategy and set up a Social Enterprise Unit to co-ordinate its implementation. This was established within the Department of Trade and Industry, and in 2006 became part of the newly created Office of the Third Sector, within the Cabinet Office.

There are more than 62,000 social enterprises in the UK, employing over half a million people, with a combined turnover of more than £27bn a year. Social enterprises account for 5 per cent of all businesses with employees and contribute £8.4bn a year to the UK economy. The vast majority of social enterprises in the UK can be considered small with only 19% having turnovers of more than £1million, are predominantly urban based (89%) and have a staff comprising, on average of 40% volunteers.

Support services to the social economy in the UK are well developed but not yet fully mature.  Many support functions are well provided, especially geographic and sector specific support to nascent and early stage social enterprises and social entrepreneurs.  The Social Enterprise Coalition, the national trade association and representative body for social enterprise, lobbies government on behalf of the sector and co-ordinates across support bodies delivering business advice and capacity building in each of the UK regions.

Conversations with a range of leading figures in the UK’s social economy have identified the following areas as key opportunities available to social enterprise in the coming years: Increasing public service delivery by social enterprise; Asset based development; Relocalisation and the provision of missing middle social finance.

September 24, 2009

konstam, hot damn!!!

Filed under: food — benmetz @ 2:08 pm

absolutely one of my recent culinary highlights was dinner at konstam this week.  it is simply fantastic.  phenomenal. inspiring…

the decor is surreal and distracts, in a freakily-chainmail-pleasing kind of way, from the awe inspiring menu.

konstam was set up by oliver, the owner and chef, to source ingredients as locally as possible.  an amazing 80% of products used come from within the M25!  i was skeptical when i arrived but blown away from the first mouthful.  this is an inspired use of first class ingredients and top notch cooking and presentation.

and all contained within a sourcing framework that will have you eating the finest mersea caught mackerel, chervil packed herb salad and damson fool.

this place is not just first class – it is world class!  go!  now!  then go again, tomorrow!

konstam

September 23, 2009

Social Entrepreneurship 101

Filed under: projects, social economy 101 — benmetz @ 10:21 am

I almost forgot I wrote this…  Some nine months or more ago Susan Mackenzie at Philanthropy UK asked me to write an article about social entrepreneurship for the Visa European guide to giving.  They posted me a printed copy this week.  So I dug around, found what I wrote and have posted it below.  It’s very much a “101” article for budding philanthropists but I think it’s nicely formed and worth sticking up here.

Visa article for Philanthropy UK

Social entrepreneurship – what’s all this then?

Heading into the 21st century we are seeing the term ‘social entrepreneurship’ used increasingly to describe all manner of activities with some form of social or environmental benefit.

What does it mean to be a social entrepreneur?

Wikipedia defines social entrepreneurship as “the work of a social entrepreneur.  A social entrepreneur is someone who recognises a social problem and uses entrepreneurial principles to organise, create, and manage a venture to make social [or environmental] change. Whereas business entrepreneurs typically measure performance in profit and return, social entrepreneurs assess their success in terms of the impact they have on society. While social entrepreneurs often work through nonprofits and citizen groups, many work in the private and governmental sectors.”

Like business entrepreneurs, social entrepreneurs are driven, ambitious people.  But social entrepreneurs are different.  They measure their success in number of lives improved, environment conserved and wellbeing generated.

Social entrepreneurs can be found in urban and rural locations, throughout the four corners of the world and working in every field and disciple imaginable.  From Victoria Hale who is developing new and affordable medicines for neglected diseases to Willy Foote who is transforming financing structures for fair-trade and organic producers in the developing world, social entrepreneurs use business acumen to tackle some of the world’s most intractable problems.

The Social Economy

Social Entrepreneurs are different from social enterprises.  Social Enterprises are legally incorporated organisations with a social and/or environmental mission that trade to fulfil their objectives.  They are often, but not always, founded and run by social entrepreneurs but the point to make here is that they are not mutually inclusive – social entrepreneurs do not always run social enterprises and social enterprises are not always run by social entrepreneurs.

The social economy in Europe varies in form and scale between each constituent country.  In addition to charities and voluntary/volunteer organisations many countries have histories of co-operative and mutual activity. Arguably the term social entrepreneur can be used to describe the work of the key historical figure Robert Owen, founder of the modern cooperative movement.  Some countries, such as France and the UK, have created new legal structures, policy instruments and financial mechanisms to stimulate the growth of the social economy.  Across Europe the social economy seems to be emerging from the traditional campaigning and charities worlds as a response to increasing commercialisation and globalisation.

Global and local

Social entrepreneurs and social enterprises can be found working at the micro level, perhaps in a particular local community and with turnovers in just the hundreds or thousands of pounds.  Equally they can be found working on globally important issues, impacting millions of lives across multiple continents and with turnovers in the tens of millions of pounds (sterling).

For instance social entrepreneur Willy Foote, who founded Root Capital, negotiates fixed price forward contracts with global fair-trade and organic purchasers such as Starbucks and Whole Foods that then allows him to lend to producers in the developing world.  Over the last four years Root Capital has made $66.5 million of loans, across 26 countries, with a 99.5% repayment rate, impacting the lives of hundreds of thousands of rural producer families.  Willy’s plan is to get to the level of circa $50 million a year of lending at which point this new form of lending will ‘pop’ onto the radar of the major banks, opening a new market to them by proving its viability.  In this way Willy aims to provide rural producers with access to the billions of dollars investment the banks can bring rather than the millions of investment Root Capital can provide. www.rootcapital.org

At the other end of the spectrum and by no means less important is Eric Samuel. Eric founded his initiative, Community Food Enterprise, in 2002, to improve the health of residents in some of the most deprived areas in East London.  Eric is recognised as leading the way in the UK in confronting food poverty and food access issues in the London Borough of Newham and surrounding area.  Through promoting healthy eating through schools and community facilities, providing fresh fruit and vegetables as well as healthy cooked meals, and by training community food workers Eric has impacted on the lives of tens of thousands of individuals.  Eric is stimulating an important change in the fabric of his community, one where understanding and importance is placed on the need for healthy eating for the health of the individual and that of the community.  As a consequence, through training programmes he runs and through word of mouth, his work is beginning have an impact throughout the UK.  www.community-food-enterprise.org.uk

There are no Global or Europe wide data sets that can give us a sense of the scale of this phenomenon.  Indeed the blurred nature of what might be classed as socially entrepreneurial activity would make this task difficult, if not impossible.  It is, however, somewhat easier to measure trading activity and thus get a sense of the scale of social entrepreneurship, by measuring social enterprise activity.  This is something the UK Government decided to do in 2006.  The former Government Department of Trade and Industry found 55,000 trading social enterprises in the UK turning over £27 billion, or 1.3% of the total turnover of all businesses with employees and with a contribution to Gross Domestic Product estimated to be £8.4 billion.

Clearly social entrepreneurship and social enterprise is not a flash in the pan.  There is something happening at the interface of business and society and it looks like a structural adjustment that is here to stay.

What’s the future for social entrepreneurship?

As social and environmental problems increase in number and severity the role of the social entrepreneur is becoming more important.  An aging population in the developed world will see pressure placed on Governments to innovate and deliver efficient, value for money health and care services.  By 2030 more than 50% of the population of Japan will be over 65 years old significantly decreasing the Governments tax base while increasing overall health and care costs.

The 2006 Stern Review on the Economics of Climate Change shows the effects of climate change costing between 5 and 20% of World Gross Domestic Product.  And as insurance claims from extreme weather events and rising sea levels outpace increases in GDP pressure will mount to devise new ways to climate change.

These kind of demographic and economic changes provide huge opportunities for individuals and organisations that place social return over financial return.  Who better to rise to these challenges than the social entrepreneur on the cutting edge of innovation and using commercial acumen within a not-for-profit structure?  Could it be that the days of the business entrepreneur are numbered and the days of the social entrepreneur are in the ascendant?

How to get involved in Social Entrepreneurship

As social and environmental pressures increase, business entrepreneurs and professionals from across the commercial world are starting to explore the world of social entrepreneurship, by becoming practitioners, funders and volunteers.  They are as likely to get involved in an initiative local to where they live as they are to focus on a field or sector where they have a particular expertise.  Bankers are starting to look at new ways of allocating capital to civil society, Hedge Fund managers are practising arbitrage to drive down the cost of anti-retroviral drugs, Management Consultants are transforming local community organisations into sustainable social enterprises.  These people are changing the world.  You too can change the world.

September 18, 2009

SoCap recap

Filed under: life..., projects, social finance — benmetz @ 2:50 pm

Annapurna – the high point of SoCap!

The quote of SoCap09 for me was an amazing Indian social entrepreneur, Annapurna (I forget her last name) running a cloth weaving social enterprise and moving it to scale. When asked “how do you value your company” she simply replied “I value my company”. I’ll flesh out her full answer a little more… she said:

“I value my company.  The people who I work with value my company, their children and families value my company.

For me value is an emotional word, not a financial one.  For me equity is about equality.

I value my company.”

In my opinion Annapurna captured what was missing from SoCap and what the social capital markets should really be about – the redefining and recapturing of terms such as value, that have been perverted by commerce and finance, and their re-anchoring into real meaning….

Supply vs. demand?

Another observation from SoCap was the dominance of supply (of finance) side people and thinking.  While arguably this is what such events are about it is also clear that such an aggregation of folk without balancing representation from the demand side of the equation (for benefit organisations needing finance) can have negative consequences.  I think I just bore witness, once again, to the creation of a bunch of soon to be redundant architecture – this time a proliferation of systems for metrics, monitoring, evaluation, benchmarking etc…  Undoubtedly some will survive but the aggregate cost to the sector will be high and perhaps better spent doing deals, developing organisations?

Dont get me wrong, it’s great to have the supply side visionaries finally on side.  But those of us coming from the demand side have an obligation to keep these guys feet on the ground and their approaches in reality – with reality being a balance of immediate need (deals to be done) and aspiration (frameworks and global systems for the sector).

Connections and Vignettes…

At the end of the day the acid test for any conference or gathering of people is whether I’ve come away inspired and connected to my fellow attendees.  And in this respect SoCap wins out – in fine style.

I was inspired by people like David Green and his Solar World For All project, looking to radically reduce the costs of photovoltaics and revolutionise the PV supply chain.  I caught up with Ron Layton from Lightyears IP and found out he’s looking at up to a 17 fold increase in current activity levels over the next couple of years (astounding work – check out the website).  Over a conversation about China I met Wayne Silby, founding chair of Calvert, and exchanged crazy ideas…

Oh, and as a bonus I came away hugely better informed about the work I’m doing for the private equity firm I’ve mentioned before.

I met old friends and strengthened friendships.  I met new friends and began new friendships.  I laughed lots with inspiring people (jeffweee, awdweee!!!).  Oh and I ate a fair amount of fantastic food too!!!

Looking forward to SoCap10!

socap03

September 16, 2009

SoCap Recap UK – come one, come all…

Filed under: projects, social finance — benmetz @ 8:53 am

Below is an invitation to the UK SoCap Recap, an afternoon and evening review of SoCap09 for people who made it to the conference and for people who didn’t but are interested in finding out what went on…

Dear All,

Jonathan Jenkins, Director of Ventures at UnLtd, is kindly hosting some informal drinks for people who made it to SoCap09, and people who didn’t, to meet up, catch up and share/find out about peoples conference experiences.  Sort of a SoCap recap…

If you were at SoCap and you fancy a debrief please come along to the UnLtd offices at 4pm on Monday 5th October for a bit of a formal review, followed by informal drinks at 5.30pm through to about 7:30pm.  And if you didn’t make it but would like the low-down then do come along.

Those of us who want could make dinner arrangements after.

We’re a bit tight on space, so please RSVP to jonathanjenkins@unltd.org.uk

That being said please do forward to people you think might be interested in coming along

UnLtd’s offices are at 123 Whitecross St, London, EC1Y 8JJ

Map: http://www.streetmap.co.uk/streetmap.dll?G2M?X=532404&Y=182140&A=Y&Z=1

all the best

ben

September 14, 2009

la trompette – all the starters!

Filed under: food — benmetz @ 10:25 am

back in london.  la trompette sunday evening…  off piste – all the starters!  world class – omg!

la trompette 2

September 8, 2009

san francisco – i think i love you!

Filed under: food, life... — benmetz @ 4:08 pm

i can’t quite get over the incredible diversity and quality that pervades the food scene, or scenes, throughout san francisco.  so it seems appropriate to jot down a few words as i’m getting set to leave – in honour of a great city and in memory of some great food.

one of the highlights was a running meal, with each course in a different, and completely exceptional, restaurant.  made all the better by the company of audrey selian and jeff tuller from social markets we kicked off at la mar, the infamous peruvian cebicheria.  cebiche of the finest and freshest quality blew our minds and left us reeling as we headed from pier 1.5 to the ferry building and into the slanted door.  the selection of vietnamese fusion, made famous by a visit from bill clinton a while back, was world class (though they could learn a thing or two from the summer rolls in cay tre on old street in london!) and topped off with labor day fireworks over the water.  then on to epic for a caramel salted chocolate pudding that left us all on the floor, dribbling…  where else in the world will you find three world class places to eat, all within five minutes walk of each other?  it pains me to say it but san francisco knocks the spots off london as a city of food…

other phenomenal places to eat include flour and water.  way south and in an industrial backwater it’s on par with the best osterias you’ll find in italy.  phenomenal. (dear mayra – thanks – and see you next year!)

then there’s a16, another world class italian that left us (me and the nexii team) reeling from the quality and simpicity  of the food.

and yuzu, a small sushi bar down a side street serving mindblowingly fresh fish.

dont forget tataki, the world’s first sustainable sushi restaurant, serving equally fresh and guilt free marine produce.

plus there is a wealth of street food – well close to street food – to savour.  top of these is el farolito, right down in mission and as good as being in mexico city.  also not to be missed are the multiple dim sum joints in china town – serving world class dim sum from early morning through to lunch.  there’s no better way to start the day than to share a table with an 85 year old noodle slurping local giving you recommendations of what to eat and how…

in fact – what am i doing here???  breakfast calls!!!

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