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Israel 2009


The criteria RNSI uses to evaluate social enterprise ... ... Israel 2009 – PowerPoint PPT presentation

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Title: Israel 2009

  • Israel 2009

Social entrepreneurship
  • Overview of Social Entrepreneurs
  • What is it? There are many different social
    activities what is distinct about the social
  • Who does it? What are the characteristics of the
    person and organization that are called social
  • Why does it matter?
  • Is the world different as a results?
  • How do we know the world is different?
  • What is the reason for being for the social
  • (The importance of the mission for an

Social entrepreneurship
  • The two most common forms,
  • the social enterprise creating a business or
    earned income that raises money to support the
    organization and which advances the mission (for
    example creating jobs for the unemployable)
  • The innovator of systems change beyond the
    social enterprise Using resources in new ways to
    further the mission ( An example, teach for
    america, reforming American education by getting
    graduates of the best colleges to spend 2 years
    teaching in poorerst schools rather than working
    on wall street)

Social Enterprise 101 Terminology
  • Social Enterprise
  • business that generates earned income for a
    social purpose often incorporates social
    innovation. Examples Seventh Generation,
    Rubicon Landscaping, Pioneer Human Services.
  • three main forms
  • 1. Revenue generation focus
  • 2. Job-training focus
  • 3. Mission focus, business as a bonus

Social enterprise recognizes inherent uncertainty
and need for experimentation, affirms the value
of dispersed creativity vs. centralized planning,
not limited to a given sector and not bound by
culture of charity, is pragmatic, open to any
methods or tools to get the job done including
markets focuses on lasting social change.
Greg Dees
The Hybrid Organization(social enterprise
Kim Alter Virtue Ventures LLC 2004
The Hybrid Organization (social enterprise
Kim Alter Virtue Ventures LLC 2004
Entrepreneurs in the business world
  • Entrepreneurs are the change agents in the market
  • They exploiting an invention
  • producing something old in a new way
  • Creating new markets serving traditional markets
    in new ways

The social entrepreneur
  • Entrepreneurship has traditionally been seen as a
    way of creating wealth for the entrepreneur and
    for those who back her/his work. Social
    entrepreneurs employ entrepreneurial skills,
    such as finding opportunities, inventing new
    approaches, securing and focusing resources and
    managing risk, in the service of creating a
    social value.

Social Entrepreneurs are change agents in the
social sector
  • Adopting a mission to create social value
  • Recognizing and pursuing new opportunities to
    serve that mission
  • Continuous innovation adaptation and learning.
  • Acting boldly without being limited by resources
    currently in hand
  • Heightened accountability to stakeholders served
    for the outcomes and IMPACT created

New relationships of the funder and the social
  • Traditional providers of charity gave money away
    without expecting a financial return and often
    without involvement in the recipients
  • Social investors by contrast blend
    philanthropic giving with business principles.
    Committing resources to social ventures with the
    expectation of a specified and measurable social
    and sometimes also financial return,.
  • (M Martin 2005)

What the SE approach contributes to an
  • SE introduces a different kind of business
    thinking in non profits paying attention to
    market forces as well as the need
  • Social Enterprise also moves thinking towards a
    focus on long term sustainability for the
  • (M Martin 2005)

Irupana- Bolivia
  • Irupana works with 1,700 indigenous farming
    families across Bolivia, buying certified
    organically grown produce directly from them,
    cutting out the middleman. Irupana produces and
    distributes 80
  • products including coffee, tea, bread,
    honey, marmalades, chocolate, dried fruits, a
    variety of cereals, to 18 Irupana stores and 300
    outlets that stock Irupana foodstuffs, including
    large supermarkets. Approximately 4,000 customers
    a day buy its products. Organic goods sell at
    higher prices as they are targeted to middle and
    upper income consumers, allowing Irupana to
  • pay prices to farmers that are about 25 higher
    than non-organic produce. Javier Hurtado,
    Irupanas founder, encourages the farmers with
    whom he works to keep a portion of their harvest,
    thus improving
  • their own families' nutrition. Hurtado employs
    knowledge of organic agriculture and high
    standards of production to create a product that
    will command a premium price. Last year,
    Irupanas sales
  • expanded by 32 despite the economic downturn in
    the region. Irupana has begun to secure
    international markets, and just signed a contract
    with a German buyer to supply 180 tons of
    Irupanas cereals over the next three years.

Waste Concern- Bangladesh
  • By promoting the concept of waste as a
    resource and emphasizing on the marketing aspect
    of organic waste, Waste Concern is causing a
    chain reaction among multiple sectors in
    Bangladesh. Working in partnership with
    communities, Waste Concern has set in motion a
    process for house-to-house solid waste collection
    that is then taken to community-based composting
    plants to turn the waste into organic fertilizer.
    Waste Concern arranges for fertilizer companies
    to purchase and nationally market the
    compost-based enriched bio-fertilizers it
    produces. Waste Concern thus provides jobs for
    urban poor that collect the waste and work in the
    local plants and stimulates behavioural changes
    in urban communities and the waste management
    industry. In addition, Waste Concern helps to
    address the environmental problem of diminishing
    topsoil fertility due to the use of synthetic
    fertilizers and pesticides in Bangladesh. At
    present, 30,000 people are benefited from Waste
    Concerns project in Dhaka.

The Big Issue - Scotland
  • The Big Issue in Scotland, co-founded by Mel
    Young and Tricia Hughes, is a weekly street paper
    sold by homeless people in Scotland. Based on the
    philosophy of providing a hand up, not a hand
    out, its homeless vendors receive 60 of the
    cover price for each sale. Featuring a mix on
    hardhitting current affairs and lively critiques
    on art and entertainment. The Big Issue in
    Scotland sells 50,000 a week with a readership of
    255,000 and is most popular amongst 15 to 24 year
    olds. Its popularity has demonstrated the
    viability of publications that blend social and
    business objectives. Building on the success of
    Big Issue in Scotland, Young helped launch a
    global association - International Network of
    Street Papers (INSP) - to provide support to 50
    similar street papers in 30 countries across five
    continents. Young is currently President of INSP.

ASAFE -Cameroon
  • Gisèle Yitamben's Association pour le
    Soutien et l'Appui a la Femme Entrepreneur
    (ASAFE) is providing business training and
    development services, alternative financing and
    access to e-commerce to support thousands of
    women entrepreneurs in Cameroon, Guinea, Benin,
    Chad and the Democratic Republic of the Congo.
    Today, ASAFE is actively engaged with technology
    companies and business incubators to help African
    entrepreneurs overcome the digital divide.

  • Fabio Rosa has pioneered systems to provide
    electricity to hundreds of thousands of
    impoverished rural Brazilians. His
    widely-replicated Palmares Project established
    the standard for low-cost electricity
    transmission in rural Brazil, reducing costs to
    consumers by more than 90 percent. Today, Rosa is
    spreading innovative "agro-electric" solutions
    that combine photo-voltaic solar energy, electric
    fencing, and improved farming and grazing systems
    to simultaneously combat poverty, land
    degradation and global warming.

ApproTEC- Kenya and Tanzania,
  • ApproTEC seeks to develop a significant middle
    class in Africa by stimulating the growth of a
    thriving entrepreneurial sector. Beginning with
    Kenya and Tanzania, it seems well on its way to
    attaining that goal. ApproTEC creates new
    businesses and jobs by developing and promoting
    new low-cost technologies that are bought and
    used by local entrepreneurs to establish
    profitable small businesses. By identifying,
    developing and marketing technologies with a high
    benefit-cost ratio, ApproTEC enables poor but
    industrious individuals to play an effective role
    in the market economy, substantially increasing
    their incomes and creating jobs and a host of
    backward and forward linkages. By July 2002, over
    28,000 pieces of ApproTEC-designed machines and
    tools had been purchased in East Africa. Today
    over 500 new pieces are sold every month. Local
    entrepreneurs have used these tools to start over
    24,000 new small enterprises, create over 25,500
    new jobs and generate over US30 million a year
    in new profits and wages. Between them, they
    already generate over 0.5 of Kenya's GDP

Duck Revolution- Japan
  • Takao Furuno has developed and disseminated
    a sustainable, integrated organic rice and duck
    farming system that significantly increases
    yields and has been replicated in tens of
    thousands of locations across Asia. Rather than
    using chemical inputs, Furuno introduces ducks
    into rice paddies to fertilize and strengthen
    rice seedlings and protect them from pests and
    weeds. This process boosts farmers' incomes and
    decreases their work load, while reducing
    environmental damage and increasing food

Rubicon Programs -USA
  • We make cakes and a whole lot more

Rubicon National Social Innovations (RNSI)
An initiative of Rubicon Programs, Inc., RNSI is
a laboratory for scaling social enterprise.
Our near-term goal is to launch businesses that
meet these three criteria
The Criteria RNSI Uses To Evaluate Social
Enterprise Opportunities
  • Number of people impacted (e.g., jobs per
    location and number of location affected
  • Scalability of the enterprise
  • National partners
  • Fixed cost economies
  • Positive overall social impact from the
  • Target population (e.g., low-skill workforce)
  • Positive impact through jobs (skill-building,
    transitional workforce)
  • OR positive impact on those same people by
    other means
  • Target break-even in three years or less
  • RNSI competitive advantage
  • Partners available who can help us scale
  • Operationally feasible
  • Proven elsewhere, needs to scale
  • Risks are manageable
  • Team available with expertise and experience

Individual impact
Attractive economics
RNSI Business Development Process
Phase I Idea Generation
  • Develop pipeline of business ideas
  • Vet ideas using business development tool created
    by RNSI
  • Pass top ideas (3-5) onto Phase II

(Phases I II are done in parallel as we
continue to evaluate new ideas)
Phase II Feasibility Study
  • Conduct feasibility studies on top ideas
  • Select 1-3 ideas to pilot and test for success
    on a national scale
  • Assess capital and organizational needs

Phase III Launch first RNSI site
  • Secure capital
  • Hire leadership/staff
  • Launch
  • Evaluate for national scale

Opportunity Bulk Item/Mattress Recycling
Per unit tipping fees, retailer and manufacturer
take back programs, component part sales and
potential renovation and value-added products
business income
Revenue Model
Transfer station/landfill operators, trash
collectors, retailers, manufacturers, hotel
chains, universities and military
Key Customers
Key National Partners
Top ten retail chains, top ten bedding
manufacturers, large national haulers, Intl
Sleep Products Assn.
Running a materials recovery facility for
multiple bulk item streams is marginally
profitable, potential to improve by combining
with other higher grade waste stream net income
and/or finding value-added uses of product parts.
Profitability Potential
10-15 permanent jobs initially, can run as a
transitional job program with up to 100 TJ
workers per year
Social Impact
15-20 multi-stream facilities handling 5-10
million mattresses and other items per year, with
successful placement of over 1000 transitional
workers per year
5 year goal
Rubicon has conceptualized a new model for
providing small unsecured loans for emergency
The Rubicon Business Model
A New Model for Employer-Based Lending
Online Application
Verifies application, performs underwriting,
verifies repayment details
Applies for loan, authorizes employee to make
disclosures and payroll deductions
Communicates underwriting result and loan details
Payroll Service Provider
Loan delivery in medium of choice
Repayment through monthly payroll deductions
Loan proceeds could be delivered in any form of
the borrowers choice i.e. check, deposit, card
or cash Access to employee information and
payroll deduction management could be ideally
provided through a payroll service provider or
employer database
Lessons Learned From The Trenches
1. Disciplined management is critical
  • Execution matters
  • Management team is paramount need to pay for
  • A great marketing plan is the great divider
  • Entrepreneurial, business-like thinking in staff
    and board
  • Focused but adaptable be aware of mission drift
    but have flexible people, processes, culture
  • Utilize traditional financial tools to account
    for costs and risks
  • Articulate specific business vs. social goals
    use metrics to measure both manage double
    bottom line.
  • Hire people who really get both social mission
    and business

Lessons Learned From The Trenches
2. Use Market-based analysis
  • Social mission will not sell a crummy cake
  • Some business types dont lend themselves to the
    social enterprise model
  • Competitive pressures are real despite perceived
    unfair advantage of social mission
  • Sweetheart deals (not) so sweet

Lessons Learned From The Trenches
3. Know your stakeholders
  • Understand the needs, context, challenges,
    opportunities among each group
  • Customers
  • Employees
  • Community
  • Partners
  • Funders

Lessons Learned From The Trenches
4. Build entrepreneurial culture
  • Acknowledge profound differences in
    organizational culture between for profits and
  • What balance do you want to strike
  • What tradeoffs are you willing to make?
  • Leadership must be undistracted from program or
    other nonprofit focused activities

Lessons Learned From The Trenches
Design business to support program participants
  • Know the target population you are serving
  • Offer a vertical career ladder - select business
    that provides right level of job opportunities
  • Ensure access to appropriate support services to
    help participants be successful
  • Housing? Mental health counseling? Legal
    counseling? Childcare? Access to clothes? Food?
  • Promote from within and build mentors
  • Have mix of participant and regular employees
  • Find trusted sources for employee/participant
    referrals partnerships with other
    nonprofits/workforce services programs
  • Provide hard and soft skills training
    opportunities to make participants more
    marketable for future jobs.
  • Constantly evaluate/measure progress of