There are many courses, webinars and presentations that are available offering an “Introduction to Social Enterprise” for non profit, co-operative, or even entrepreneurs in the private sector. What is the value of these introductory courses? Should you register?
These educational offerings are typically geared for those who are considering starting a social enterprise. They are often marketed as the first step on the path of social entrepreneurship. You may have seen promotions from progressive foundations, business schools, social incubators, shared spaces, or non profit intermediaries. Many of these courses are inexpensive or even free—especially webinars, where the overhead costs are low.
In fact, I offer presentations and workshops ranging from 1 hour to 7 hours providing an introduction to social enterprise definitions, trends, opportunities, challenges and business development processes. I have organized and conducted these trainings with the hope that the many attendees of my sessions would walk away as foot soldiers in an informed army of social entrepreneurs and by sheer mission-driven will would start a tidal wave of social enterprises.
The reality is that I think I have scared many of them away.
The more I offer this sort of course, the more I end up focusing on many of the risks and challenges associated with conceiving, designing, launching and running a social enterprise. I believe strongly that every business should operate with a mandate to provide social wealth in the process of conducting business, yet I still find myself highlighting seemingly dark realities, such as:
- It is hard to operate a business in a competitive marketplace.
- The organization needs to be ready BEFORE strategic business design.
- The business operation must align with—and not compete with—the social mission.
- Customers are a new stakeholder group and must be considered alongside volunteers, operational partners, staff, beneficiary populations, donors, investors, and board members.
- Financial (seed) capital to start a social enterprise is hard to find.
- The reality is that an organization may invest 3-5 years before they see earned revenue.
- How do you protect intellectual property when you want to share it to maximize social impact?
- Non profit or collectively run organizations are frequently safe, risk averse places and this can be debilitating.
- There are legal restrictions placed on charities operating businesses.
- It is a myth that the businesses social value proposition will immediately guarantee sales.
- Social impact measurement can be complex, yet is vital to design a social enterprise.
Yikes!
Rather than creating a comfortable nurturing space for organizations seeking to design or build a social enterprise, I paint a picture of the brutal reality: social enterprise is harder than it sounds when initially proposed as a strategic planning retreat, a board table, a coffee shop or at a kitchen table of idealistic changemakers.
I’ve now come to terms with the realization that if I share the honest and accurate details of the stumbling blocks faced by most social enterprises, then the very few that will emerge from these introductory presentations to elaborate on their business idea will truly have what it takes to run a business. They must be unflappable, resourceful, risk tolerant, collaborative, resilient, and passionate.
In fact, I suspect many “Social Enterprise 101” attendees will forget the detailed course content, and will end up learning it all again through their own experience. Arguably, the value of the introduction course is not, therefore, to prepare a veritable “army” of social entrepreneurs; the value of the course is to stop the individuals and organizations who don’t have what is needed from spending time, resources and social capital on starting a social enterprise.
Perhaps one can say that a good introduction to social enterprise workshop is not a launchpad; it is more of a prophylactic that prevents the birth of enterprises that may not possess the necessary conditions for life.
Selling workshops as a business
Experts like to share what they know.
Social service providers–from farmers to crisis centre staff–undoubtedly have skills we all could/should know, but setting up a training business is high risk.
When delivering workshops, it is very rare that one can charge attendees enough to actually cover the costs of running the workshop. There are some exceptions, particularly if there is an inherent self interest for the participant (think “how to win in real estate” type of workshops), or if there is some future product (book, consulting, food goods, recipe list, etc) that will sell as a result of the workshop. In this latter case, the workshop can be run at a loss–a loss leader of sorts–on the premise that a future profit can be realized.
There are certainly a lot of non profits who provide workshops for a fee, and some even use a social enterprise model (ongoing, strategic activity with a primary social mission, involving a market orientated transaction). The challenge is that these workshops are almost always backstopped by funding, which makes them precarious businesses when or if the funding disappears. This risk can be mitigated by having multiple funders, but it remains challenging to actually design a self-sufficient workshop business without alternate lines of revenue.
The target audiences for many well-intentioned social service providers are often unable to pay market fees for workshops; elementary to high school youth, marginalized communities, low income, or other audiences either won’t pay or can’t afford it.
For those wishing to sell workshops or training as a business, you are almost certainly looking at a business established on one of the following models:
The reasonable example of a social enterprise which provides training in a financially sustainable way is a sport club. These are (typically) non profit organizations with a mission to promote sport (soccer, hockey, jai alai, etc). Team fees cover hard costs (field/ice/court rentals, tournament fees, training, referees, team balls, nets, etc). These social enterprises, however, rely heavily on volunteer labour (coaches, parents, treasurers, etc) to actually function, and there is a natural demand for sports clubs. The learning from the sport example is that the “product” being sold is not only about fitness (’cause all of us could get that by simply running/wheeling around the block). Sports offer other tangible and intangible benefits that parents (and participants) want: comradery , sense of achievement, days off school (!), time with friends, learning new skills, childcare (that is a parent need), being part of a community, etc.
One example of a training social enterprise is The Philippe Kirsch Institute, run by a charity called Canadian Centre for International Justice. The Institute provides legal training to lawyers as part of their mandatory requirement (set by Provincial Bar Associations) for member to take hours of annual legal training (Continuing Legal Education). This business is functioning, but is not yet profitable, although the feasibility study done indicates that profitability is very possible, given the mandated requirement for legal education in every province. Again, like the sports example, the demand is already there from a target audience with sufficient money to buy training.
Community centres or community groups often provide courses on preserving or cooking, and there may be a fee for these. However, the presenter rarely gets compensated with anything more than an honorarium, and the true costs of the business are absorbed by the non profit (the fixed costs like the room, the staff or the marketing or the variable costs like the electricity or food input costs. Good examples of this are the Brainery (in New York, with a branch now in Ottawa). From the private sector, you might find examples like Ottawa Centertown Canning Company, which operates with a strong social mission, and probably a lot of “volunteer” labour from its owner. You’ll note that their training workshops are “complimented” by products sold at various outlets around the city. (ie model #2 above)
The bottom line: Consider providing workshops as a result of your business, rather than your ACTUAL business. If you choose the latter, then make sure you are selling to people/organizations that can afford to pay most if not all of the hard costs of the activity and where there is an intrinsic demand in the marketplace.