Embracing the Concept of Social Enterprise as An Alternative Financial Model

Embracing the Concept of Social Enterprise as An Alternative Financial Model

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In recent years, civil society organisations (CSOs) have faced numerous challenges in obtaining funds to support their activities due to financial crises, government regulations, poor economic conditions and most recently the surge of the COVID-19 pandemic. Based on these difficulties, CSOs have rigorously searched for alternative ways to sustain their projects without depending solely on donors. To support the CSOs in this process, the West Africa Civil Society Institute (WACSI), in collaboration with STAR Ghana Foundation, under the Giving for Change (GfC) project, organised a series of webinars titled: Alternative Financial Models for Civil Society Organisations. This three-phase webinar series aimed at introducing civil society organisations and actors across West Africa to alternative funding mechanisms through shared learning and experiences from community foundations and grant makers in Africa.

The first webinar which took place on 29 September 2022 focused on the Asset Based Community Development model and provided participants with guidance on how to identify and mobilise their assets to foster community development.

Watch the video of the webinar.

The second webinar under this series, moderated by Jimm Chick Fomunjong, focused on Social Enterprise (SE). This session brought together 104 participants from 14 countries across the globe on 26 October 2022.

Mohammed Ukasha, CEO of NiV, an award-winning Social Enterprise organisation based in the Northern region of Ghana, as the first guest speaker, introduced participants to the Social Enterprise Model. The second speaker, Barbara Nöst, CEO of the Zambian Governance Foundation for Civil Society (ZGF) provided insight and shared the lessons learnt, successes and challenges encountered applying the social enterprise model within her organisation.

What the Social Enterprise Model is

In his illustration, as seen in Figure 1, Mohammed introduced participants to the four common features every social enterprise must have. These four features include the need to have;

  • A social/societal or environmental objective;
  • An entrepreneurial behaviour: Moving away from the usual NGO ways of working to a business mindset of how to bring money to your organisation;
  • Democratic and/or participatory systems and structures: The systems to run and operationalise the enterprise;
  • Re-investment of profits: Because SEs are different from traditional businesses, re-investment of profit is very important.

Thus, according to Mohammed, the social and environmental mission, entrepreneur strategy, innovation and sustainability should be the key drivers to every social enterprise. However, the model can only be considered a social enterprise if it creates positive benefits for communities while also generating profit and if it also creates a sustainable social impact based on revenue instead of grants.

 

Figure 1: Introduction to the Social Enterprise Model

Source: WACSI, 2022

The building blocks of social enterprises

Mohammed further introduced participants to the five building blocks of social enterprises which include:

  • Beneficiary group: Those who benefit from the social or environmental value being created through a product or service. They might not be the ones paying for the service or product.
  • Customer group: This refers to those who are willing to pay for the products or services that solve a problem. They can also be beneficiaries depending on the social enterprise model.
  • Revenue model: This is a strategy that determines how revenue will be generated by the organisation without depending on donors or charitable organisations. It involves searching for reliable revenue streams that can support the long-term sustainability of the organisation.
  • Positive impact: It involves defining the social or environmental impact the organisation intends to achieve and it should be intentional.
  • Innovation: This is a very important aspect and there needs to be a distinction between innovation and invention. It takes into account new strategies or methods that improve upon the way things were done in the past. It is about creating value using the same resources or fewer resources.

Figure 2 presents the five building blocks of social enterprises.

Figure 2: The building blocks of a social enterprise model

Source: Ukasha Mohammed, NIV Norsaac, 2022

What makes a social Enterprise successful?

Mohammed outlined the three lenses under which the success of a SE model can be validated. These include; desirability, feasibility and viability.

  • Desirability is the human-centered approach used to assess how attractive and advantageous the SE solution is to the target population. It involves asking the questions:
    • Do people want the solution?
    • Is the solution wanted by enough people?
    • Can you reach the people you are proposing the solution to?
  • Feasibility is a technical and internal assessment of the technical knowhow and capacity to develop and manage the SE solution. It involves asking the questions:
    • Can my organisation do this?
    • Do you need the support of others to deliver?
    • Can you get access to the key resources to deliver this?
  • Viability is centered around the business aspect. It involves assessing if the organisation should invest in this and if the model can generate more revenue than the cost incurred.

‘Empathy research’ is the guiding principle in responding to these three elements as it informs the responses to these questions.

Figure 3: The three lenses for validation of a SE

Source: Ukasha Mohammed, 2022

Why should CSOs adopt social enterprise as an alternative funding source

Social enterprise is very important because if CSOs can generate their own fund, they can stay true and focused to their mission. Currently, most NGOs drift from their mission because they are donor dependent.” – Ukasha Mohammed

Adopting a social enterprise is very important due to the rise in dwindling donor funds and sharp cuts in terms of aid through government policies. Many organisations have drifted away from their mission due to over-reliance on donors and the need to survive. To remain self-sustaining over short to medium-term, social enterprising is fundamental as it can serve as an alternative financing model for these organisations. It drives innovation, generates the needed support for grassroots organisations and serves as a tool that fosters collective ownership and involvement in decision making.

How to build a social enterprise model

Building a social enterprise requires that CSOs develop clearly defined business models with the right systems and structures in place to access the right funding. With these systems in place, organisations can leverage existing projects to grow the model in order to minimise operational costs and maximise profits. The creation of a unit or department within the organisation is necessary for the running of its operations. Finally, to ensure that the affairs of the model are properly managed, it is important to create an independent or separate vehicle with a separate management and board of directors.

Experience sharing from the Chuluka social enterprise

The Zambian Governance Foundation (ZGF) is a non-profit company limited by guarantee created in 2009 as a pool fund in Zambia.  In 2016, ZGF incorporated a social enterprise and set up a subsidiary social enterprise – Chuluka Limited in 2017. Barbara Nöst shared the foundation’s journey, the assumptions made at the onset, the challenges faced, the successes encountered, and the lessons learnt both internally and externally. Figure 4 provides a vivid illustration of her presentation.

Figure 4: Lessons Learnt from creating the Chuluka social enterprise

Source: WACSI, 2022

According to Barbara, the Chuluka social enterprise was set up with a limited startup capital. The ZGF moved from the conventional NGO set up to a business model. Shifting from the NGO mindset into a business mindset was very challenging – there were scarce resources to invest into marketing, and adjusting staff salaries was a de-motivation to staff. Some of the other challenges faced throughout the implementation include; currency fluctuations, NGOs not willing to pay training fees, cash constraints on NGOs, competition with alternative cheaper products, supply chain problems and no experience with management of sales agents.

However, the following lessons were learned:

Setting up in a rush with limited capital: Have substantive capital to set up a social enterprise and give time for the entity to build up.

  • Not assuming NGOs can have entrepreneurship skills overnight: Work with staff who have entrepreneurial skills.
  • Work with hustlers instead of moving existing NGO staff.
  • Selling your core competences and what you are good at doing.
  • Keeping the SE subsidiary separate from the mother organisation. Cross fertilisation can create a non-conducive environment.
  • Paying attention to the business.

“If you don’t pay attention to the business, there is simply no business because business doesn’t come to you if you are not constantly out there hustling.” – Barbara Nöst

At the end of the presentations, participants were interested in getting clarity on the difference between the beneficiary and customer groups, tips for organisations to kickstart their SE initiatives and how the transitioning process takes place.

In his conclusion, Mohammed re-iterated the dire need for social enterprises to have a clearly defined business model, with the right systems and structures in place to help them access the required funding. Empathy-based research is essential to help uncover assumptions and turn them into opportunities.

 

 

 

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9 Comments

  1. Abdulai Deadehwai Swaray

    Says March 03, 2023 at 8:14 pm

    Pikin-To-Pikin Movement is a national NGO that was established during the peak of the rebel war in Sierra Leone. The organization is a child centered NGO and it is presently operating in 7 out of the 16 districts of Sierra Leone. Over the years of our existence, we have been solely dependent on donor funding. We want to move away from this donor dependency and adopt social enterprise as an alternative funding source. We really need your support in this direction.

  2. Osumanu

    Says March 03, 2023 at 11:13 pm

    Very insightful

  3. Naa Ashiley Vanderpuye

    Says March 04, 2023 at 12:22 pm

    Very grateful for this piece of excellent explanation of what SE is about. Even though I am reading a summary of the actual webinars, the simplicity in the writing but hitting the most relevant aspects of SE, with the excellent illustrations/drawings has given me deep understanding of not only what SE is about but how to go about setting one up within the NGO I work with. The idea has been with us for a very long time and we do have hustlers but more understanding of what it entails was/is needed and this information has been a great one to help us get closer to taking on the challenge. Thank you very much WACSI and keep up the great work!

  4. James Yarsiah

    Says March 05, 2023 at 3:26 pm

    Believe this is an innovative idea we can explore in our context. We are ready to work with WACSI to advance this idea.

  5. Mrs Dike Helen.O

    Says March 06, 2023 at 7:18 pm

    This is a wonderful idea , wisdom that will help the world thank you, l am here

  6. MESAME SONEWANG

    Says March 07, 2023 at 1:47 pm

    wowwww so interesting and resource filled

  7. Florent LAMAH

    Says March 07, 2023 at 5:18 pm

    Nous sommes vraiment intéresser de l’Entreprenariat Social pour les Organisations a but non lucratif pour relever l’autonomie financière.

  8. Florent LAMAH

    Says March 07, 2023 at 5:24 pm

    Par ce que cet entreprenariat social pour les organisations de la société civile est une bonne stratégie pour équilibrer la stabilité économique des organisations et nous cherchons toujours les appuis techniques et financières pour développer nos activités d’AGR.

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    Says April 09, 2023 at 7:23 am

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FIIFI BOATENG

Fiifi is a Ghanaian and currently serves as Communications and Information Officer at the West Africa Civil Society Institute. He joined the Institute in December 2020.

NANCY KANKAM KUSI

Nancy is a Ghanaian and currently serves as Programme Officer in the Knowledge Management unit at the West Africa Civil Society Institute. She joined the Institute in January 2021.

AGNES ADWOA ANIMA

Agnes is a Ghanaian and currently serves as Head of the Administration unit in the West Africa Civil Society Institute (WACSI). She joined the Institute in October 2021.

DORIS ODEI

Doris holds a Bachelor of Arts in Social sciences (Economics and Sociology) from the University of Cape Coast. She is passionate about impacting young lives hence co-founded Impart Foundation. A non-profit organization which seeks to empower young lives through education, technology and entrepreneurship.

PRINCE AKOWUAH

Prince Akowuah is a Ghanaian and currently the Programme Assistant in the Translation Unit at the West Africa Civil Society Institute (WACSI). She joined the Institute in 2020.

MAXWELL APENTENG

Maxwell Apenteng is a Ghanaian and joined WACSI in September 2010. He provides gardening and janitorial services at the Institute.

GEORGE ADU-MINTAH

George Adu-Mintah is a Ghanaian and currently the Protocol Assistant/Driver at the West Africa Civil Society (WACSI). He joined the Institute in October 2006.

IBRAHIM KWAKU GBADAGO

Ibrahim Kwaku Gbadago is a Ghanaian. He joined the Institute in 2008 and provides janitorial services and assisting the institute's errands. Before joining the Institute, he worked at the Palestinian embassy in Accra, Ghana.

RUTH YAKANA

Ruth Yakana is from Cameroon and currently the Receptionist at the West Africa Civil Society Institute (WACSI). She joined the Institute in 2020.

BETHEL KWAME BOATENG

Bethel is a Ghanaian. He provides technical and IT related support to the Institute. He joined the Institute in October 2006.

WHITNAY SEGNONNA

Whitnay Segnonna holds a Bachelor’s Degree in International Management from the University of Benin. With 2 years of experience, she has a strong knowledge of organizational and project management. Combined with her bilingualism, she is very passionate about her work. She joined WACSI as Project Assistant on Critical Ecosystem Partnership Fund (CEPF) for the Capacity Development Unit.

STELLA YAWA WOWOUI

Stella Yawa Wowoui holds a Bachelor’s Degree in Translation Studies. She has a perfect grasp of both French and English, as well as an intermediate level in Spanish. She is currently working as a Project Assistant on the Techsoup Project.

KWAME ASANTE

Kwame is an experienced IT Consultant/Software Developer. He is skilled in Web Applications Development, Digital Security, Database Management, Digital Marketing and Brand Management. He holds a Bachelor's Degree in Information Technology and is a Microsoft Programme Alumni. He is currently serving as a Marketing and IT Officer on the Techsoup Project.

GRACE AKPENE ZIGGAH

Grace Akpene Ziggah is a Togolese and currently the Logistics Officer and also assists in administration duties at the West Africa Civil Society Institute (WACSI). She joined the Institute in June 2009.

LILLIAN DAFEAMEKPOR

Lilian Dafeamekpor is a Ghanaian and currently the Assistant to the Executive Director at the West Africa Civil Society Institute (WACSI). She joined the Institute in 2020.

JOHN P. FRINJUAH

John P. Frinjuah has expertise and interests in civil society, international development, democracy and governance, conflict, crisis, and security. He has extensive experience working with civil society and international development organizations where he supported and managed research, programmes, and provided technical assistance on a variety of themes around public policy, governance, and development. He is an alumnus of the University of Ghana and the Fletcher School of Law and Diplomacy - Tufts University in the United States, with a Bachelor of Arts in Political Science and Master of Arts in Law and Diplomacy from two institutions respectively. John speaks English, French and several Ghanaian and regional West Africa languages.

GERVIN CHANASE

Gervin has extensive international development experience, including 5 years of policy advocacy and capacity building of grass root organisations. He has implemented over the years a combination of agriculture value chain, livelihood, food security and governance and rights programmes.
Prior to joining WACSI, Gervin worked on two USAID projects focusing on agriculture value chain development and governance in northern Ghana
Gervin holds a master’s degree in development & Governance from the University of Duisburg-Essen, Germany as well as a Masters in Global Studies from the Universities of Vienna (Austria), Leipzig (Germany) and California (Santa Barbara), USA. He is passionate social justice and inclusion.

LEANDRE BANON

Leandre Banon, Beninese, joined WACSI in September 2014 as Capacity Development Programme Assistant. Since then, he has worked in various units within the Institute to support operational and institutional capacity strengthening programmes for civil society in the region. Currently serving as Capacity Development Programme Officer at WACSI, his main responsibilities involve designing, planning, implementing and monitoring capacity development programmes for civil society constituents and grouping across the West Africa. Leandre is a certified Change the Game Academy Programme Trainer. His background lies in the areas of economics and development planning.

SAMUEL APPIAH

Samuel Appiah is a Ghanaian and currently the Programme Officer in the Finance and Administrative Unit at the West Africa Civil Society Institute (WACSI). He joined the Institute in May, 2016.

JIMM CHICK FOMUNJONG

Jimm Chick Fomunjong, Cameroonian, joined WACSI in May 2018 as the Head of the Knowledge Management and Communication Units of the Institute. He has over ten years’ experience as a journalist and a development communications expert. He has a vast experience in supporting African organisations to strengthen their internal and external communications, building and sustaining relationships with the media and, leveraging on the power of social media to promote their mission. He is also excellent at supporting organisations to set up and operationalise functional communications and knowledge management systems. He has a deep passion and expertise in supporting Africans and African civil society organisations to document their praxis, share and learn from experiences documented from the African civil society sector.

FRANCK A. SOMBO

Franck Sombo is a development practitioner with the drive to lead self and others to influence productivity and efficiency. His work involves supporting organisations to develop strategic plans, design monitoring and evaluation systems, develop and use relevant performance measurement tools to track progress, assess organizational growth and institutionalise learning. Franck has eight years of experience working with WACSI where he currently serves as the Head, Monitoring, Evaluation and Learning. His academic qualifications include Masters in Organisations’ and Projects’ Management, and in Business Sciences and a High National Diploma in Finance and Accounting.

Franck is a Fellow of the International Program for Development Evaluation Training (IPDET) and a graduate of the Graduate Training Institute (GTI) - Ghana with specialization in Strategic Management and Corporate Leadership. He has a rich experience in Project Management, Capacity Development, Strategic planning, Data Analytics, Monitoring and Evaluation, Training and Facilitation, Mentoring and Coaching among others.

OMOLARA T. BALOGUN

Omolara is a development practitioner and advocacy strategist with over 15 years of progressive experience in development programming targeted at strengthening civil society in West Africa.

She joined WACSI in November 2009 as a Regional Advocacy Consultant and later became the first Policy Advocacy Officer of the Institute in 2010.

She was promoted to Head of the Policy Influencing and Advocacy (PIA) Unit in 2015. As the Head of the PIA unit, Omolara offers strategic direction to the Institutes’ ambitions to connect and convene groups of organised and organic civil society actors; and influence regional and global discourses on crosscutting policy issues including—civil society regulations, sustainable development goals, civic space and enabling environment, aid effectiveness, gender equality, and civil society accountability.

Previously, Omolara served as a Programmes Associate with the Women in Peace and Security Network-Africa (WIPSEN-Africa), where she worked with her team to design and implement pan-African programmes on—multidimensional peace support operations and gender mainstreaming in security sector reform in Ghana, Sierra Leone, and Liberia.

She also served as a Service Development Marshal at TVQ Consulting Group, a customer service firm focused on designing strategic customer relationship and business growth plans for private and public financial institutions in Nigeria.

Omolara is a social justice advocate, a network weaver, and a convener. She has a postgraduate degree in Peace and Conflict Studies; a degree in International Relations and History, from the University of Ibadan and Obafemi Awolowo University in Nigeria respectively.

She also holds executive certificates in Behavioral Science in Public Policy from Harvard University Executive Education in Cambridge and in Citizen Advocacy from the Coady International Institute, St Francis Xavier University in Canada.

KWABENA KRODUAH

Kwabena Kroduah is a Ghanaian and currently heads the Finance Unit at the West Africa Civil Society Institute (WACSI). He joined the Institute in January 2008.

CHARLES KOJO VANDYCK

Charles currently serves as the Head of the Capacity Development Unit at the West Africa Civil Society Institute (WACSI). Charles has over 10 years of experience working in international development and social justice issues in Africa. Charles has expertise in strengthening civil society and public agencies including the design and implementation of governance and leadership programmes, development of knowledge pieces and policy advice. Charles was the founding Board Chair of Innovation for Change (i4C)-Hub Afrique, as well as the founding member of the International Consortium on Closing Civic Space (iCon), an initiative of the Centre for Strategic and International Studies (CSIS) in Washington DC. Charles currently serves as the Member of the Governing Board (Coordination Collective) of Africans Rising. He is a Member of the Development Studies Association, United Kingdom. Charles is a 2017 Stanford University Fellow for Nonprofit Leaders and a certified Change the Game Resource Mobilisation Trainer.

NANA ASANTEWA AFADZINU

Nana Afadzinu is a Ghanaian and currently serves as the Executive Director of the West Africa Civil Society Institute (WACSI). She joined the Institute in October 2010.