Varkey George Director: MIGS Consulting, Country Director: Gateway College; Africa Director: AGES; Director: Vigour Charitable Trust

Multiple Income Generating Strategies for Social

Enterprises

Social Entrepreneurship

This talk

• Why

• What

• opportunities

• How

• What are my strengths in contributing to it

An organism keeps repeating tried and tested

responses to environmental impulses.

Environments are dynamic and if the

responses don’t change… the organism dies. 3

Population dynamics Adults Fertile Children Total

1 billion 2 billion 4 billion = 7 billion

2 billion 4 billion 4 billion 10 billion

Why should a Social Entrepreneur take up for-profit activities?

• Dependency on subsidies from government • Government dependent on tax revenue • The more the tax, the less there is to re-invest • The more social spending… more the tax

• Dependency on philanthropy • Surpluses generated by enterprises / individual

donations • Legislated in South Africa

• Both income streams are under threat

Childline nearly closed… partnership with Peermont

(gaming and hospitality company) R 1

contribution from guests

Badisa 48 old age homes, decentralised. Each

one looks after itself…struggling… social services rescued

NICRO Centralised, let go off 100 of 300 staff; downsizing further,

forecasting a huge deficit.

SHAWCO: Retrenching

LOTTO 2 billion budget; 40 billion worth of requests.

South Africa: 100 000 non profits

Some examples in South Africa

South Africa

• GDP growth slowed to 1.2 %

• Government debt - 2008/09: 27.3 % of GDP

• 2012/13- 41.8%

• Interest cost of state debt: 100 billion • slower economic growth — delivered in part by the

continuing difficult global environment, but also as South

Africa struggles for competitiveness — cast a shadow

over public finances, employment and equality.

Source: http://www.fin24.com/Economy/SA-investment-rating-safe-

analysts-20130111

Current CSR in practice

marketing window dressing mindset change core competency BBBEE Compliance

Ford, Carnegie, Vanderbilt, TATA, Warren Buffet, Bill Gates, Patrice Motsepe

Social entrepreneurship in non-profits.

• The art of simultaneously pursuing both a financial and a social return on investments (the double bottom line)

What

Vehicles available and the possible maneuverability

For profit non profit social business social . ente rprise

Social Enterprise are nimble

Social Innovation

Opportunity: The new BBBEE weighting

ELEMENT WEIGHTING

Enterprise Development and procurement

40 points (3% NPAT)

Socio-Economic Development 5 Points (1% NPAT)

Ownership 25 Points (25% +1)

Management Control 15 Points (40 to 50%)

Skills Development 20 points (3 % of payroll)

Total 105 points

Source:http://www.getonskillsdevelopment.co.za/bee/socio-economic-

development.html

Opportunity is being lost

• 3% of NPAT on ED

• 3% of payroll on skills development

• 1% of NPAT socio economic development

Culture, Board, CEO, Staff, stake holders, knowledge,

Consistent quality and reporting

Marketing, clear

quantifiable goals

• International

• Fees from satruday school

• RAG

• Transport

• Rags2riches

• House

• Renting of spare space

• Education

• Health

• Enterprise

• Arts

• Sports

• Senior Clubs

Unreasonable people: social entrepreneurs

• They want to change the system

• Insanely ambitious

• Propelled by emotion

• Think they know the future

• They ignore the evidence

• They are just…well… unreasonable

• Don’t give a man fish… teach him how to fish… SE will try to revolutionize the whole fishing industry.

Failing gracefully

• Reject rejection

• Failing is temporary

• Keep expectations realistic

• Focus on strengths

• Bounce back: keep moving- rat research

Every genius could have been a failure

• Isaac Newton: Born in 1642

• Mother left him at 4 yrs

• 17 yrs: farming… failed miserably

• Trinity college: closed due to plague

• Went home and found the law of gravity and light

What is your strength

• Innovator----- constant innovation of the new

• Entrepreneur---- constant efficiency and improvement

• Manager ----- stability and consistency

This talk

• Why

• What

• opportunities

• How

• What are my strengths in contributing to it

An organism keeps repeating tried and tested

responses to environmental impulses.

Environments are dynamic and if the

responses don’t change… the organism dies. 19