Social Enterprise: Redefining What It Means to Work on Purpose

Through best-practice partnerships and social procurement, corporates can help social enterprises scale and redefine how the world does business – with purpose.

In 2011, a deadly earthquake took hold of Christchurch, New Zealand, shaking down nearly 40% of the South-Island city’s buildings. Loss of life and devastation were quickly followed by prolonged emotional and financial strain, with residents – especially young people – disillusioned by the trauma. Some uprooted to New Zealand’s larger North-Island cities of Auckland, Wellington, and Hamilton, further depleting Christchurch’s already shaky economy.

Christchurch residents Bailey Peryman and Fiona Stewart experienced daily the shock to the city’s youth and came together to do something about it. Both with strong agricultural backgrounds, they dove right into the rubble, replacing the ruin with rich earth and establishing the city’s first urban farm in the central business district.

The farm, dubbed Cultivate Christchurch, quickly became a salient symbol of resilience. Not only did the modest plot yield fresh and local produce to restaurants and hospitality in the area, Bailey and Fiona provided work experience and therewith confidence to young people, many of whose families had suffered significantly from the earthquakes.

Cultivate Christchurch talks about the value of SAP Social Sabbatical for Regional Engagement

As the model scaled, more young people joined on and new farms opened – and something delightful happened. Cultivate Christchurch went from relying on grants and philanthropic funds to generating increasing revenues and moving toward financial independence. They became commercially viable in addition to operating as a charity. In other words, Bailey and Fiona were doing well — and doing good. It’s a simple way to describe a social enterprise.

Social Enterprise World Forum: The Ultimate Gathering for Good

Last week, more than 1,500 social enterprises from all over the world – with stories like Bailey and Fiona’s – convened on Christchurch for three days to learn, network, and shape the future of their growing global movement at the Social Enterprise World Forum.

Hosted by SAP’s New Zealand-based social impact partner and social-enterprise incubator Ākina Foundation, SEWF 2017 also brought together social-impact investors, corporates and academics to share wisdom, shape policy and create a more sustainable future.

Defining and Measuring Social Impact

Though growing rapidly, the social enterprise sector faces several roadblocks. To start, an official and consistent definition of what a social enterprise is and the tax or investment benefits that this title should bestow remains elusive.

Measuring commercial performance for a social enterprise is straight forward, mirroring established financial reporting frameworks used among businesses and corporations. But when it comes to measuring “social performance,” opinions vary widely. Though the United Nations’ Sustainable Development Goals provide solid guidance, the difficulty comes when enterprises – social or otherwise – must quantify their social impact.

Social enterprises as well as corporates are digging deeper into the 17 Sustainable Development Goals to better quantify social impact

Defining these metrics was a steady theme at the event. Indeed, SAP, Ākina Foundation and Christchurch-based social enterprise Kilmarnock Enterprises are currently working on a local social-impact measuring model utilising methodologies inspired by SAP’s Industry Value Engineering framework. With input from attending corporates and social enterprises gathered at the forum, the team is now iterating a proposal that could find wider buy-in as a definitive measurement framework for social impact.

Scaling Social Procurement

Possibly the social enterprise sector’s biggest beef with corporations is the latter’s view that Corporate Social Responsibility (CSR) is enough. Though lauding innovative CSR programs, Colin Downie, Sales & Partnership Director of WildHearts Group, reminded attendees at a social procurement plenary that the average CSR budget of a FTSE top-100 company in the UK is around £10 million. However, the procurement spend of these same organisations is closer to £500 million. WildHearts Group, which matches corporates to social innovators that deliver goods and services aligned to their values, has helped plug social enterprises into this massive corporate spend and in so doing has transformed 200,000 lives.

General manager for Ākina Foundation Louise Aitken added at the plenary, “This is money corporations are spending anyway, and many are not paying enough attention to the social impact they could deliver by simply choosing the right social-enterprise suppliers.”

General manager for SAP Ariba Ben Redwine (right) discusses the opportunity for social enterprises within corporate supply chains. Colin Downie of WildHearts Group (second left), Daniel Flynn of Thankyou (second right), Sam Edmonds of Social Traders and Louise Aitken of Ākina Foundation made up the panel, chaired by New Zealand Post CEO David Walsh (left).

Ben Redwine, general manager for SAP Ariba for Asia Pacific Japan joined the panel adding that the technology is already there for corporates and social enterprises to find each other, noting the Ariba Network’s millions of buyers and suppliers and $USD 1.5 trillion in annual transactions. “There is tremendous opportunity for social enterprises to tap into that volume, but also huge potential for corporates to express their values by engaging social enterprises in their supply chains,” Ben said.

Requiting the Love

As a rule, corporates have business down pat, while they often struggle with the purpose side of things. Conversely, social enterprises usually own purpose but may miss a trick when it comes to sound business practices. So it’s no wonder the two entities find collaboration so fulfilling.

In May 2017, SAP held a social sabbatical for regional engagement in Christchurch, again teaming up with Ākina Foundation to support four local social enterprises. Twelve SAP employees from across Australia and New Zealand spent two weeks full tilt working at and with up-and-coming social enterprises, building business plans and supporting with formative decisions.

By the time the SEWF came around in late September, much of these plans had come to fruition. Kilmarnock Enterprises, an organization that delivers training and employment for people with disabilities, was a prime example of perfect cross-pollination through social sabbaticals.

SAP Social Sabbatical in action at Kilmarnock Enterprises in Christchurch

The SAP Social Sabbatical captured the attention of more than 130 corporates attending a tailored event within SEWF called Working on Purpose. Hosted by SAP and Ākina Foundation, Working on Purpose offered a deep bench of social-enterprise experts, including Paul Dunn of B1G1 and Peter Holbrook of Social Enterprise UK, as well as workshops across skilled volunteering, social impact measurement and social procurement. The end goal was to inspire new ideas on how the corporate sector could better integrate social enterprise – not just into their CSR programs, but into their entire organization. “This approach,” Peter Holbrook stressed, “is how a company delivers real social impact — not through volunteering days.”

We Get So Much More Than We Give

At the SEWF kick-off, Stephen Moore, executive director for SAP Australia and New Zealand, summed up the corporate/social-enterprise relationship in a way that stuck with attendees throughout the event. He appealed to corporates: “When you engage with social enterprises, you get so much more than you give.”

Next year’s Social Enterprise World Forum takes place in Edinburgh, Scotland. SAP is already pursuing innovative ways to partner with the organising committee ahead of and during the event to further infuse purpose into the global social enterprise movement.

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