At the Social Finance Forum last week at MaRS, we had the opportunity to bring together a number of social enterprises to reflect on Enterprising Change and talk about the challenges they face, as well as their strategies for addressing them. Here are some of the highlights from the session organized jointly by SET and CCEDnet.
Access to capital
Dan Kershaw, Executive Director of Furniture Bank, led a roundtable of social enterprises and impact investors that discussed the following topics:
- The pros and cons of incorporating as a nonprofit social enterprise – it really depends on the business model. Some organizations find it helpful to remain a nonprofit, while others find that the for-profit model opens up more doors.
- Despite years of field-building work by a number of organizations, we still can’t take it for granted that enterprises and investors would understand each other – they’re often ‘speaking a different language’
- Social enterprises find that investors often have very traditional thinking. Non profit enterprises, in particular, have to keep telling the story to find non-traditional thinking
- Investors have found that emerging social enterprises would benefit from greater financial expertise; for example, some enterprises don’t know how to do valuations properly
Tools & resources
The last point on expertise was echoed on the second table, where Ellen Martin, Co-founder of MySojo, facilitated a large group of social enterprises and intermediaries that shared the following:
- Capacity remains an issue for social enterprises, especially if there is poor succession planning. Managers get promoted because of their strong work with communities, but that doesn’t necessarily mean they have strong governance, financial management or marketing skills.
- Professional development and credentialing for social enterprise managers would be helpful – a number of people would be interested in a six-week program that provided business management skills.
- There is a dearth of mentors and coaches for social entrepreneurs
- While there are a number of resources available, such as the Social Entrepreneur’s Playbook, they need to be more accessible and adapted as enterprises might use them in a wide range of contexts.
- Getting to know the jargon of social enterprise can be challenging – and when you’ve done so, ensuring that all the stakeholders are using ’shared language’ is critical.
Sales & marketing
Robert Meinzer of Options Mississauga was leading the conversation around sales and marketing, which took a slightly different tack.
- The social mission doesn’t always play well – potential supporters, partners and investors sometimes think that you’re bringing up the social mission to compensate for a poor business. So enterprises have to be careful when speaking about their work.
- At the same time, SEs are not always great at capturing their success and presenting it to the outside world. Past SET research has shown that few SEs have marketing staff, and up to 50% don’t even have a marketing budget
- An interesting takeaway was that SEs don’t always understand their customers – and it is important to distinguish between the communities they serve (which for SET members often means the people they train and employ) and their customers.
- There is a need to develop strong, relevant industry partnerships that can overcome entrenched thinking about social enterprises.
Readers, what are other challenges you are aware of? How can we work to address them? Share your comments!
Sector Dialogue series supported by the Metcalf Foundation.