benmetz.org

October 6, 2009

Social Economy 101 – Nigeria

Filed under: social economy 101 — benmetz @ 7:21 pm

This is part six of my social economy 101 series, looking at Nigeria.  I’ll be slowing these down from now on as the project I was working on that generated these is almost over.  But it’d be great to keep building snapshots of social economies around the world.  So drop me a line if you have an interesting relevant information source you would like me to link to or that we could work on to turn into an additional posting…

Social economy development in Nigeria.

Significant formalised third sector activity in Nigeria can be traced back to the 1990’s, crystallising initially around issues related to human rights and in response to the military regime and a series of coups, abortive coups and promises of return to democratic rule during the early 1990’s.  Previous to this rise in activity there had been a strong but informal third sector stretching back many decades.

Third sector activity can be traced back to the 1940’s and 1950’s.  The essentially communal and tribal nature of society meant, and still means, much of Nigeria’s social development is centred around individual philanthropy at a clan or tribe level.  Conversations with Nigerian third sector practitioners point to a strong but undocumented culture of giving at this local, tribal level.

From the 40’s right up to the 70’s, and the first wave of the oil boom, one of the main conduits for third sector and social development activity were local development unions, where individuals would contribute pro rata according to ability into charitable vehicles aligned with tribal, clan and geographic cultural and community groupings.  This approach began to fall apart with the rise in oil revenues and the impact this had on people’s relationship with money and community.

Due to the military regime ruling the country from 1966 until 1999, with the exception of the large international multilateral aid agencies and these local development unions, very little third sector activity occurred.

After the return to democracy in 1999 the third sector went into what can be described as a boom period.  Increased international aid flows combined with a civilian government laying down the most basic of enabling infrastructure saw significant funding find its way into areas such as employment creation and HIV-AIDS treatment and prevention.  However with much of this funding coming from multilateral and international aid agencies a culture of running after the funding developed.

The last ten years has seen a slow but steady increase in charitable activity across Nigeria with an increased focus on economic development and poverty alleviation developing over the last five years.  Part of this focus has seen an interest growing in support for individuals and communities to set up micro-enterprises.  However very little activity that could be described as social enterprise – trading for social or environmental benefit – has begun to develop yet, although the emerging focus on enterprise may be an indicator of things to come.

It is clear that the sector in Nigeria is incredibly immature but growing and only just starting to consider looking at issues of professionalisation, quality, transparency and governance.  Thus the prerequisites for a healthy third sector and social economy cannot yet be said to be in place.

It is notable that no data or statistics exist, nationally or regionally, on the size and characteristics of the third or charitable sector.  Registration of not for profit organisations is fragmented locally, regionally and nationally and no central depositary of registrations, or indeed of data gathering, exists.

October 4, 2009

Social Economy 101 – China

Filed under: social economy 101 — benmetz @ 11:06 am

Here’s part five of my social economy 101 series, this time taking a look at China.   Substantive interest in the social economy from the Chinese people and government as well as from international NGO’s means this is an area to watch.  The sheer size of the country and the speed at which development takes place means social enterprise could well go to a scale not yet seen elsewhere incredibly quickly..!  Thanks goes to Nick Temple at SSE for the contents of his brain and connectivity!

The emerging social economy in China

The idea of the social economy was introduced to China some four or five years ago, predominantly through academic institutions studying the phenomenon in other parts of the world and bringing the concept to China through a series of theoretical studies.

While interest at this theoretical level is building there is little social economy activity happening on the ground.  Barriers identified, as part of these academic studies, include lack of funding and financing for NGO expansion into trading activity, lack of professionalism and business acumen in existing NGO’s, legislative and regulatory barriers to development and a lack of innovative, trading based solutions and thinking across the sector.

Definitions of social enterprise and the social economy are still uncertain for many commentators in China and a clear view has yet to be reached as to whether the social economy is something that sits firmly in the NGO world or whether it is a phenomenon that is driven by for profit business seeking to make social returns as part of their core offering.  This debate and clarification is not helped by the fact that the Chinese terms for “corporate social responsibility” and “social enterprise” contain the same words but in reverse order!

With Chinese government shifting from control oriented administration to a service oriented one the opportunity is developing for social economy organisations to deliver public services.  If realised this may stimulate the professionalisation and transformation of civil society to a more enterprising and competitive model, although it is too early to call this at present.

Clearly, with a country of such size and development trajectory starting to take a real interest in social enterprise the potential for the sectors development is off the scale.  However financing of these potential developments as well as government intervention and control pose significant potential barriers to the sectors growth.

The British Council is funding pilot activity around development of key social economy functions in China as well as across SE Asia.  Of note is their funding to the School for Social Entrepreneurs.  SSE co-designed a short programme (with other UK / Chinese agencies involved) for social entrepreneurs. This ran in Beijing and is now being rolled out in the tier two cities.

A precursor to this work was the British Council funded and recently completed Young Foundation led work to stimulate social innovation in China, which directly led to this new British Council focus on social entrepreneurship.

There are very few funders in China with a remit to support social economy activity.  A notable recent development is the start up of the China Social Entrepreneur Fund that describes itself as a “comprehensive platform for entrepreneurs to do philanthropy, a professional institute providing enterprises with comprehensive, complete, multi-level and tailor-made public interest and philanthropic plans, and a supportive strategic partner for enterprises to implement the plans”.  The English language website is still under construction so it is impossible at this point to ascertain how much of this ambitious vision is being tackled.

A number of Venture Philanthropy funds are getting started in China including the Lenovo VP fund and dedicated funds being developed by The Narada Foundation and The Asia Foundation.  Interest in VP as a method of third sector development is clearly taking root in China.

Ashoka is just getting established in China and has recently appointed a country director, Patrick Cheung.  The office is in start up and fundraising phase and has yet to commence any support activity.

October 3, 2009

Social Economy 101 – Brazil

Filed under: social economy 101 — benmetz @ 8:50 am

Here’s part four of my social economy 101 series.  This time Brazil, and focusing on the sector’s history.

The history of the social economy in Brazil

Conversations with individuals in leading third sector support organisations in Brazil paint a picture of Brazil as a country that is between 20 and 30 years behind much of Europe in it’s development of the third sector and the social economy.

The development of the sector in Brazil was fundamentally shaped by the military dictatorship, which ran from 1964 until 1989, during which time most of the NGO movement was based around human rights campaigning.  This was focussed both against atrocities committed by the military regime and in campaigning for basic human rights of marginalised, impoverished and indigenous communities.  Feminism as a campaigning force began to appear in the late 1970’s as did a movement to promote basic health care and sanitation for all, which was heavily invested in by major international NGO donors.  In 1989, when the dictatorship was replaced by democratic rule, these campaigning sectors contributed substantially to the shaping of the country’s constitution.

By the mid 1990’s a centralist approach to policy development, implementation and service creation and delivery had developed.  This led many civil society organisations to partner with central government in the delivery of services.  This stimulated to a huge increase in numbers of NGO’s in existence and a backlash, commencing in the late 1990’s, critical of these NGO’s of becoming instruments of the state.

Corruption was one of the issues picked up on by this backlash and contributing to a bifurcation within civil society – between organisations aligned to government and organisations campaigning for reform of the often corrupt and opaque relationships between government and civil society.  This split led to a second wave of development within the third sector, at the end of the 1990’s and in the early part of this decade, of organisations funded from sources other than government and taking a strongly independent and often-critical position of government and government funded NGO’s.

This campaigning base of NGO’s desiring of independence and financial self-sufficiency has led to a third wave of NGO development currently being experienced across Brazil.  It is from within this third wave that social entrepreneurship and the creation of a social economy is emerging.

There are now between 300,000 and 400,000 registered third sector organisations in Brazil, the majority being grant funded but with an increasing minority engaging in some level of trading activity and emerging as social enterprises.  However there are very few pure social enterprises operating in Brazil at any scale or approaching any level of financial self-sufficiency.

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

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