A Global Mission: How Social Enterprises Are Affected by Their Communities
by Paola Vazquez
The pandemic forced us to have a growth mindset, rethink the way we do things and what we care about. It forced us to show up for our communities in ways we did not before. This ideology has transferred into the way we do business. While social enterprises might not be new, their increasing influence in the world of business is a force to be reckoned with. As François Bonnici from The World Economic Forum put it, “The movement is driven by millions of people developing the kinds of companies we need in the 21st century” (Pybus, 2022). Now, more than ever, a company’s mission truly embodies what the company is and what it will become. Moving forward, entrepreneurs are incorporating social impact into their business model. They are looking to their surroundings for inspiration on how exactly that impact will take place.
Aiding your community looks different across the globe because different problems call for different solutions. Initiatives have recently taken place to gain a better understanding of the fastest-growing types of enterprises in different markets worldwide. As of June 2022, the British Council and Social Enterprise UK estimated there were about 11 million social enterprises throughout the world (British Council, 2022, p.15). The same report estimated that Kenya (population 50 million) had 40,00 social enterprises. On the other hand, the Philippines (population 100 million) was estimated to have four times that number of social enterprises despite only having double Kenya’s population. What are these differences attributed to? Factors like access to government and private funding, social need, public support, and workforce skills greatly influence social enterprises’ ability to develop and succeed. In other words, where you operate defines how you do so.
I had the opportunity to speak with Catherine Meloy, President and CEO of Goodwill Greater Washington, who knows what it is like to tailor your strategy to a specific community firsthand. While working on a project, her team discovered that “there was a huge need for education for adults specifically in D.C.” So, what did her team do? They created a solution that fulfilled that need! Meloy then added, “As a result of that knowledge and understanding, we continued to open up a charter school for adults that got diplomas.” The initiative was so in tune with the community’s needs that they went on to build a second location. Success like this is not coincidental, it is the result of highly involved social entrepreneurs like Meloy and her team who understand where who, and what they are working with. She encourages others to do the same.
“Sometimes you think you may be answering a problem, but it may not be the key issue. Knowing where you are, knowing where you live, and knowing where the pain points are is key. You cannot be sitting on the sidelines. You will not have the growth factor that you expect because you are not in the community and have not been a contributing member.”
But how can aspiring entrepreneurs break into the market and start creating an impact? In what is now a highly competitive market, entrepreneurs are in the search of funding and non-financial support. Canada has become a world leader in this movement. It consistently ranks among one of the top countries to become an entrepreneur, and much of it is due to government support (Thomson Reuters Foundation, 2019). The Canadian government granted initiatives like the Investment Readiness Program $50 million dollars in 2021 to be dispersed over the course of two years. These actions have transformed cities like Vancouver into social enterprise hubs for economic development. While Canada continues to lead the movement, the United States (U.S.) has unfortunately experienced the opposite. Once rated amongst the top countries to be a social entrepreneur, it was left off top worldwide rankings in recent years. Traditionally, venture capital (VC) has been a major source of funding for U.S. social entrepreneurs. However, VC funding has seen a decline this past quarter (Q3 2022) according to EY’s most recent report. Time will tell if future investments are enough to bring the U.S. back to its previous high rank.
As we continue to see the number of social enterprises grow, the public is raising their expectations for other companies to follow the “do good” mentality, even if they were not originally founded as social enterprises. Meloy added, “I do believe that social enterprises can be for- or not-for-profit as long as they are creating value in their communities. It is not only expected, but younger generations are also becoming more and more involved.” Acknowledging and observing that social enterprises place impact at the forefront of their business model may tell us a lot about the future of business. Those who adapt to their communities will experience greater returns and engagement. On the other hand, those who fail to adapt might be left out of the conversation.