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Fiinovation webinar on social enterprises through affirmative action

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Title: Fiinovation webinar on social enterprises through affirmative action


1
Social Enterprises through Affirmative Action
2
Mentor of the Webinar
  • Mr. Soumitro Chakraborty
  • CEO, fiinovation

3
About Fiinovation
  • A CSR based research consultancy working in areas
    of education, livelihood, environment and health
    since last seven years
  • Assists businesses to support requirements of
    communities by designing and implementation of
    sustainable projects
  • Through practices such as CSR-CSO Partnership,
    Initiative Design, Initiative Management,
    Monitoring and Evaluation, Impact Assessment,
    Sustainability Reporting Fiinovation facilitates
    corporations for promotion of social enterprises

4
Agenda of the Webinar
  • Better understanding on Social Enterprise models
    (Indian Global)
  • Social Enterprise laws in India
  • Understanding of Affirmative Action in India
  • Promotion of Social Enterprise models among
    marginalised communities
  • India Inc and Social Enterprise movement
  • Top examples of Social Enterprise Models in India
  • Conclusion
  • Way forward

5
What is a Social Enterprise?
  • A social enterprise (SEs) is an organization that
    applies commercial strategies to maximize
    improvements in human and environmental
    well-being. This may include maximizing social imp
    act rather than profits for external
    shareholders.
  • SEs have a mixed and contested heritage due to
    philanthropic roots in the United States, and
    cooperative roots in the United Kingdom, European
    Union and Asia.

6
Social Enterprise, the concept
  • A SE could be engaged in any business activity
    fulfilling any need (Maslows need hierarchy)
  • E.g. Entertainment, Nutrition, Sanitation,
    Communication, Livelihoods, Transportation,
    Education, Training, Financial Inclusion
  • Asian Development Bank defines SEs as
    organizations that have triple bottom line
    returns namely, addressing social and
    environmental needs such as affordable health
    services and energy, and have a financially
    sustainable revenue model (or plan to become
    sustainable in the near future).

Social Needs
Basic Needs
Maslows need hierarchy
7
Social Enterprise Global Context
  • 'Social Entrepreneurship' can be traced to
    Beechwood College near Leeds, England (from 1978)
    where Freer Spreckley used the term 'social
    enterprise' to describe worker and community
    co-operatives that used the 'social accounting
    and audit' system developed at Beechwood
  • Ashoka Innovators for the Public a US
    foundation established by Bill Drayton was a
    program to support the development of social
    entrepreneurship
  • In the US, the term is associated with 'doing
    charity by doing trade', rather than 'doing
    charity while doing trade'. In other countries,
    there is a much stronger emphasis on community
    organising and democratic control of capital and
    mutual principles, rather than philanthropy

8
Social Entrepreneurship Development Initiatives
  • Public Services (Social Value) Act, 2012 (United
    Kingdom)
  • NYU Fellowships in Entrepreneurship, Social
    Entrepreneurship, and Innovation
  • Social Enterprise Summer Fellowship, Harvard
    Business School
  • Amazing Grace, Rangoon, Myanmar
  • Global Social Entrepreneurship Network, UK
  • Schwab Foundation for Social Entrepreneurship
  • Global Social Enterprise Initiative
  • Yunus Social Business
  • Rubicon Programs, California, USA

9
Social Enterprise India Context
  • Definition is not limited by legal structure. SEs
    may be registered as
  • Private limited companies
  • Cooperatives
  • Not-for-profits, trusts or any other legal
    entities
  • In India, a non-profit can be registered as
  • A Society, under the Registrar of Societies
  • or as a Trust, by making a Trust deed
  • or as a Section 8 Company under the Companies
    Act, 2013
  • Under Section 8 of the Companies Act, 2013, a
    limited company
  • (a) has in its objects the promotion of commerce,
    art, science, sports, education, research, social
    welfare, religion, charity, protection of
    environment or any such other object
  • (b) intends to apply its profits, if any, or
    other income in promoting its objects and
  • (c) intends to prohibit the payment of any
    dividend to its members
  • Impact investing in India has roots extending
    back to 1982, when the Ashoka Foundation provided
    grants to Indian social entrepreneurs.

10
Challenges Social Enterprises
  • Social enterprises are not just scaling up, they
    are scaling out
  • Governments and international institutions have a
    huge role to play
  • The bigger the enterprise, the greater the need
    for democratic accountability
  • Potential to transform the socio-economics of
    poorer nations, but individuals require support
    such as capital, infrastructure, market access
    etc.
  • Entry of big businesses to the market
  • Social enterprise leaders do not often come from
    traditional business backgrounds, hence lack
    expertise
  • Genuine need and desire for collaboration across
    sectors and geographies
  • Need of donor support
  • Progress on large social impact investments had
    been slow due to multiple hurdles
  • Need for better infrastructures to support the
    sector

11
Few Social Enterprises
India
Global
Global
  • Anand Milk Federation Union Limited (Gujarat
    Co-operative Milk Marketing Federation Ltd)
  • Godavari Women Weavers Services Producer Company
  • Nyayika, Leaps Bounds
  • Sukhibhava
  • Frontier Markets
  • m.Paani
  • Innovative Financial Advisors
  • Samhita Social Ventures
  • Make A Difference
  • Samasource
  • Community Shop
  • Textbooks for Change
  • ArtZoco 
  • eBatuta
  • Water Health International
  • Kiva
  • Edgar and Joes
  • Bio Lite

12
Understanding Affirmative Action
  • Known as
  • Employment Equity in Canada
  • Requires employers to engage in
    proactive employment practices to increase the
    representation of four designated groups women,
    people with disabilities, Aboriginal peoples, and
    visible minorities
  • Affirmative Action in USA
  • Focus on issues such as education and employment,
    specifically granting special consideration to
    racial minorities and women who have been
    historically excluded groups
  • Positive Action in UK
  • Promotion of people based on belonging to
    non majority identity groups in the workplace,
    educational institutions and positions in society

13
Contd
  • Affirmative Action in India
  • Known locally as reservation policy it is an
    elaborate quota system for public jobs, places in
    publicly funded colleges and in most elected
    assemblies
  • An action favouring those who tend to suffer from
    discrimination positive discrimination
  • AA reverses longstanding discriminatory
    tendencies in the society
  • For people of a certain caste, gender, sexual
    orientation, race, or ethnic background
  • AA provides supposedly fairer conditions and
    corrects past injustices

14
Different Approaches to AA
Affirmative action Through CSR
Affirmative Action
  • Implementing CSR Activities as per Schedule VII
    of The Companies Act, 2013
  • Targeting SC/ST communities
  • Recruiting employees or providing opportunities
    in the recruitment process for SC/ST communities
  • Procuring from SC/ST Vendors
  • Offering solutions to address the needs and
    challenges of the SC/ST communities

15
Poverty Among SCs and STs
  • As per the erstwhile Planning Commission, ST
    population below poverty line came down from
    47.4 in 2009-10 to 45.3 in 2011-12 in rural
    areas.
  • In urban areas, it declined from 30.4 in 2009-10
    to 24.1 in 2011-12.
  • Census 2011 revealed that the situation of
    non-workers among total ST population (i.e.
    42.0) was not dismal as compared to SC (i.e.
    52.2) and all other social groups (53.3).

16
Contd
  • Percentage of ST non- workers declined from 50.9
    in 2001 (Census 2001) to 42 in 2011 (Census
    2011) at all India level. 
  • According to SECC, 133.5 mn households (74.5 of
    the total 84 for SC and 87 for ST households)
    have a monthly income where the highest earning
    household member earns less than Rs 5,000,
    whereas households with any one of the seven
    deprivations is only 86.9 million.
  • As per NSS, 34 of SCs and 46 of STs households
    were in self-employment in 2004-05 in rural areas
    as compared to urban proportions with 29 and 26
    respectively.

17
Contd
  • There are 46, 844 villages in the country having
    greater than 50 per cent SC population
  • The SECC covered 24.39 crore households across
    the country 17.91 crore are rural households
  • 21.53 per cent of rural households belong to the
    Scheduled Caste/Scheduled Tribes

18
Unemployment Rate ()
Year ST SC OBC Others Others Total
Rural Male Rural Male Rural Male Rural Male Rural Male Rural Male Rural Male
2011-12 1.3 2.0 1.7 1.8 1.8 1.7
2009-10 1.7 1.7 1.4 2.0 2.0 1.6
2004-05 1.1 1.7 1.5 2.0 2.0 1.6
Rural Female Rural Female Rural Female Rural Female Rural Female Rural Female Rural Female
2011-12 1.1 1.4 1.7 2.4 2.4 1.7
2009-10 0.9 1.5 1.4 2.5 2.5 1.6
2004-05 0.4 1.4 1.9 2.9 2.9 1.8
Urban Male Urban Male Urban Male Urban Male Urban Male Urban Male Urban Male
2011-12 3.4 3.2 2.5 3.4 3.0 3.0
2009-10 4.4 3.1 2.8 2.7 2.8 2.8
2004-05 2.9 5.5 3.3 3.7 3.8 3.8
Urban Female Urban Female Urban Female Urban Female Urban Female Urban Female Urban Female
2011-12 4.8 4.5 4.7 6.3 5.2 5.2
2009-10 4.3 4.2 6.2 6.2 5.7 5.7
2004-05 3.4 4.6 6.7 8.5 6.9 6.9
  • Maharashtra government on the issue of suicides
    among cotton farmers in the state suggests that
    suicide incidences are slightly higher among SCs
    and STs across caste groups and for marginal and
    small farmers across size-class of land.

19
Social Entrepreneurship Affirmative Action
  • Allocation of Rs 200 crore in the Budget
    Estimates 2014-15 for setting up Venture Capital
    Fund for SCs
  • Earmarking of Plan Outlay under Tribal Sub-Plan
    at 24.71 under Indira Awas Yojna 20.59 for
    NRLM/ Aajeevika
  • Specific provisions made in the guidelines of
    programmes such as MGNREGA, PMGSY and NSAP for
    the benefit of SCs/STs
  • MUDRA Bank will be financing 6 crore small
    vendors and businesses, 61 per cent of whom are
    SCs, STs, OBCs and minorities
  • India Development Marketplace, a World Bank
    initiative, to fund support social enterprises,
    announced grants worth 2 million to 20 social
    entrepreneurs in Jharkhand, Madhya Pradesh and
    Chhattisgarh

20
India Inc and Social Enterprise
  • Tribal Farmers Producer Company Srikakulam,
    Andhra Pradesh (ALC NABARD)
  • NTFP (Gatherers' Self-Help Cooperative),
    Mayurbhanj, Odisha (ALC SPARDA)
  • Tata Social Enterprise Challenge (Tata Group,
    Acumen, Ankur Capital, Yunus Social Business and
    Ennovent)
  • On 21st May, 2012, SEBI notified the word Social
    Venture Fund
  • Aavishkar, a venture capital firm, has been
    investing in social ventures for over a decade,
    catalyzing innovation at the bottom of the pyramid

21
CII Social Enterprises
  • CII-ITC Centre of Excellence for Sustainable
    Development mentors, advises, and
  • provides a platform to social entrepreneurs and
    enterprises
  • Mentorship and advice is on business models,
    strategies, and partnerships
  • Annual event 'Sustainable Inclusive Solutions,
    a platform for social entrepreneurs and
  • enterprises
  • Social Enterprises that CII have worked with are
    in energy access, rural distribution and
  • agricultural services
  • Association with Selco Incubation Centre for
    creating conditions to deliver energy
  • services to low income families
  • CII's sponsored Code of Conduct for affirmative
    action Signed by 690 companies for
  • collecting data on SC/ST employees in 2010

22
Affirmative Action India Inc.
  • As per MSME Report 2014-15,
  • 7.83 of the enterprises were owned by Scheduled
    Caste entrepreneurs
  • 5.76 by Scheduled Tribe entrepreneurs
  • 41.94 by entrepreneurs of Other Backward Classes

23
Contd
  • All India Confederation of SC/ST Organization was
    created in 1997 under the flagship of Dr. Udit
    Raj, who is the National Chairman of
    confederation that works for government
    reservations, ban on contract system, promotion
    among other things
  • All India SC ST Railway Employees Association
  • Tribal Cooperative Marketing Development
    Federation of India Limited (TRIFED)
  • The Narendra Modi government's 'Farm to Fork'
    programme over 2,000 farmer organisations
    in Chhattisgarh, Jharkhand, Madhya
    Pradesh, Andhra Pradesh and Telangana will be
    incubated to grow into a cooperative society,
    trust and ultimately, a company, as part of the
    plan being implemented by the National Bank for
    Agriculture and Rural Development, the country's
    largest development lender.

24
Conclusion
  • Need to promote Social Enterprises through social
    venture funds
  • Establish platforms to highlight social
    innovators
  • Create larger market space by addressing social
    issues through social businesses
  • Government should adopt policies to reduce
    red-tapism and encourage individual
  • social entrepreneurs
  • Encouragement of co-operative movement as a
    social enterprise model
  • Corporations can invest their CSR funds to
    establish social enterprises addressing
  • social issues also generating income for a
    particular community

25
Way forward India Inc, Social Enterprises
Affirmative Action
26
Tripartite Model Social Enterprise, Affirmative
Action CSR
Illustration Illustration
Corporation Xs total CSR expenditure Rs 200 cr
Product Handicrafts / Food Processing
Registration The Companies Act, 2013
Organization Structure
Operations Sourcing from community members, processing of finished products, marketing
Sharing of Revenues Yearly dividends, remuneration of community members, salaries to staff, operational expenditure, expansion costs
Utilization of funds as initial capital for a
Social Enterprise
27
Benefits of Tripartite Model
  • Provide an opportunity to gain financial
    sustainability independence for the SC/ST
  • communities
  • CSR grant will allow corporations to spend money
    on social environmental issues,
  • and services not otherwise funded
  • Assets of SEs belong to the community and cannot
    be sold off for private financial gain
  • People, who are local stakeholders in the area of
    benefit, play a leading role in the
  • enterprise ensuring inclusive development
  • Local community are the shareholders who ensure
    accountability of the enterprise to
  • the community
  • The SEs will be able to generate profits or a
    surplus that can be re-invested or
  • distributed for community benefits

28
The Way Forward
Contributors to the PPT
Soumitro Chakraborty CEO, Fiinovation
Jaya Sinha Dy. Director Media Communication,
Fiinovation
Rohit Srivastava Graphics Designer, Fiinovation
Rahul Choudhury Dy. Manager, Fiinovation
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