Are Social Enterprises Just the Foam at the Top?

A lot has already been written about the effects of COVID-19 on businesses of all kinds. Information about its effects on the traditional manufacturing, agricultural and services industries is ubiquitous, and it has been a cause for concern that has informed governments’ reactions. What we’re still lacking information on is the effect that the virus and the subsequent lockdown have had on social enterprises. You know? ‘Social Enterprises’? The foam at the top of the ‘productive’ economy’s proverbial cappuccino? The plenty of innovative businesses, many of them startups that are trying to revolutionise everything from education, to financial technology and even sustainable and renewable energy. I say this because in a regular business and economic cycle, large companies and government tend to have enough ‘excess’ funds to bolster these enterprises and to work with them. The last 3 months however, has shown that a lot of businesses that have adopted the ‘social enterprise’ model, are the first to be chopped when funds dry up both from private and public purses, especially when they’re forced to react to a cataclysmic crisis such as this one.

What Do Social Enterprises Do Anyway?

Social enterprises often pride themselves in being “businesses with a conscience”. These businesses, distinguished by their conviction to make a positive difference in the world, as a way of making money as opposed to chasing a profit by any means necessary, have grown in popularity over the past decade and they include everything from edu-tech startups that connect school learners with university scholarships and bursaries, to portable solar generation packs. Due to the dense and often well-capitalised traditional industries that precede a lot of these start-ups, it is difficult for them to grow without the support of CSI funds or investment, sometimes from large corporations or government procurement contracts.

social enterprises

I myself co-founded an education social enterprise that primarily works with CSI funds and government programmes and have experienced the downturns that come with a crisis like this, not just from a funds point of view, but also from the disruption of our business model which requires the congregating of learners in classrooms. One of the trends that arose from this pandemic and lockdown that has impressed me as an entrepreneur who has worked 4 years to try and conscientise business and governments to the many problems that plague South Africa, is how many of those businesses and even the government are now taking it upon themselves to solve these problems with the same conviction that social enterprises have held for over a decade now. Some large companies are even co-opting startups to use their solutions and to amplify their work a lot better during this crisis and it is demonstrating the gap between traditional business’ business models and their role in communities and the environment. Issues that are now at the forefront include public healthcare systems, access to education, security, carbon emissions and the resilience and welfare of small businesses – many of which have been the domain of ambitious social entrepreneurs over the last decade or so.

Why Do We Need Social Enterprises?

The question we need to ask ourselves now is – Do we still need social enterprises when this crisis ends? I mean, if large companies have proven their ability to be compassionate and willingness to invest large sums of money in solving issues from business development to healthcare, then what will be made of all the social enterprises that have made it their life’s work to take on the burden of solving these problems themselves?

The answer to this question is “Yes”. We will still need social enterprises. When the crisis does inevitably end, despite the fact that things in the world will never be “normal” again or at least what our perception of “normal” is, most large businesses will probably revert back to their core offering and mandate of turning a profit from their core activities, even if they do emerge more responsible and socially conscious. Social enterprises have inherently socially conscious models that are built into the fibre of the business as well as its financial model. This means that ‘back to normal’ for most social enterprises is working to use business innovations to solve the world’s most pressing problems, although this time around they will have a much more sincere and attentive corporate and government ecosystem that no longer sees their work as ‘vanity projects’, but instead as endeavours that ought to be scaled as quickly as possible to make our countries more resilient to shocks in the education, healthcare and financial systems.

social enterprises

This should be good news even for the social entrepreneurs who have spent this lockdown without funds for operations, innovations or even payroll. This should be a period of reflecting on how best your business can weave itself into the fabric of “essential” once the crisis dies down and governments and corporations rethink how to make societies more prepared for and resilient to crises.

The question though is how social enterprises can prepare themselves for this pending world order.

How Should Social Enterprises Adapt For Their Own Survival?

There are too many clichés about using times of crisis and panic to “upskill” and “reflect’” and “adapt”, but all of them should ring true for social entrepreneurs. One set of examples that entrepreneurs have heard enough of during this crisis, are those of startups that arose from the Great Recession of the late 2000s – Uber, Air BnB, Slack etc. What a lot of articles concerning these businesses fail to tell us is how those businesses, whether deliberately or by chance, capitalised on the inevitable shift in culture that would come from a crisis. Air BnB made accommodation during travel that much cheaper for thrifty work and leisure travelers post the financial crisis. Uber made not owning a car and not being able to afford a normal taxi cab a non-issue with their offering. Co-working spaces, which rose in popularity after the Great Recession provided businesses with a cheaper option for physical premises and they have capitalised on the trend of startups seeking office space and small to medium enterprises aiming to trim down their real estate costs.

Social enterprises need to figure out how to incorporate everything from online lessons for education businesses, better access to health information, community mapping and tracking for healthcare enterprises and even rolling out renewable energy programmes to underserved communities who aren’t even on the carbon energy grid, as soon as the time allows. The cliché about reflections and upskilling should be coupled with a close study of shifting social and cultural norms and how enterprises with a conscious can weave themselves into the heart of those solutions and how you as a social enterprise can endure not only the disruptions that technology will bring with it, but also those that crises will erect. To become the coffee granules or the milk and not just the ”foam at the top” is what social enterprises need to be obsessing over during this period.

Bongani Masilela – Co Founder of Tshimong
Connect with Bongani on social media
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Bongani Frank Masilela

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