Final Words from Sagar

Hi everyone, this is my last post, and I have tried to summarize my learning with respect to Social Enterprise.

Disclaimer: Please note that the thoughts below are my own, and do not necessarily reflect those of the PW or its founder.

Definition of Social Enterprise

· Different people define Social Enterprise in different ways, my original one was that of “a for-profit business that serves a social need”.

· Prefer the definition exposed to this summer: There is a broad spectrum of organizations, ranging from zero self-income generating charities, to self-sustaining microfinance organizations. All of these can be called social enterprises in one sense of the word. If they pursue their ‘social missions’ while adopting the underlying tenets of business i.e. being results driven and accountable, focusing on governance, capacity building and expansion etc. they can certainly be called social enterprises.

Current Situation w.r.t the Social and Private Sector

At this stage, there is a very wide perceptional gap between the charitable and private sector. The latter being very results driven, is uncomfortable interacting with individuals and organizations from the former.

Most charities spend a lot of their time and quality people trying to raise funds. Each foundation/donor has its own requirements and there is a lack of standardization. Also, because of the private-social sector understanding gap (most philanthropists have made their money in the private sector), the majority of the money is sucked in by charities that have a strong brand name and visibility, not necessarily effectiveness. Thus the incentives for charities to focus on effectiveness, governance and accountability are few.

Moreover, because the social sector pays lower salaries in general, it is seen as sub-optimal and there is a lack of talented individuals, especially compared to the private sector.

My conclusion then is that the social sector has a lot of entrepreneurs, because you need to be one to get people motivated to start an organization, but is lacking people with managerial skillsets, who can really take the charities far along the road to effectiveness.

Thoughts and Philosophies

· Before diving in, it is useful to scope out the value-chain and examine those areas where there is too much attention, and those where there is too little.

• Chances are that the impact per dollar will be larger in areas where needs are not being met
• If you must get involved in the chain at a point where there are numerous organizations, it is better to become part of an existing one and help it improve its effectiveness than start a new one and miss out on the use of available infrastructure.

· Along the same networking point, it is arrogant and naive to think that one-person, or one-organization can make a significant impact. If one attempts to work without leveraging the support and information networks with other organizations, one is not performing at a 100% capability.

· Social Forums, Articles and Research Papers, Informal Discussions are vital for

• Developing these relationships
• Ensuring that organizations have a collective impetus in a general 'north' direction

To Summarize

· I came in thinking that for-profit social enterprise were the ideal, and would revolutionize the sector because they aren't dependent on donors. However,

• People are willing to give, and getting funding might not be that hard if you can show good impact and effective governance
• Adam Smith's specialization applies - the interests of the non-profit are best served if it does what it is best at: helping others. Any time spent trying to self-generate funds, especially if the staff don't have the expertise and it is beyond the mission scope, is inefficient
• Charities, Social enterprises cause only a ripple compared to the wave that large institutional organizations such as the UN, and Governments more so can create in terms of social impact.
• Having said that, at the end of the day, it one has to approach the basic needs to be solved from all angles, public, private and non-profit, i.e. society

Thank you for this opportunity PennSEM, PW and Penn!