An Opportunity Waiting to Unfold...

Each enterprise works with the underlying objective of maximising returns to investment. A Social Enterprise, however differs in the ‘definition’ of return’, which is usually measured by the impact it brings to the lives of people it is targeting through its operations.

  

However, Capital Management & more importantly, Capital Availability is a need which bothers both the commercial and the social enterprises. Things become trickier when a social enterprise identifies itself as a for-profit structure. With  such a structure, it becomes increasingly difficult for the investor to understand how to accurately measure the worth of his/her money, through the ‘monetary return’ or the ‘developmental return’; and if both, How? It certainly makes both the ‘philanthropists’ and ‘commercial enterprises’ wary of walking into this new precarious arena and this ends up stifling the availability of funding for this already thin capital market. 

So are we all lost? Not necessarily, since this gives the creative entrepreneurs, fund-managers & if I can use the term, ‘forward-lookers’, an opportunity to look at ways which can help sustain this very ‘unique model’ of positive ROI in terms of both money & social impact. It poses itself as a challenge, a challenge well taken by many of the already existing organizations which are coming forward to help this market grow. And, in the end, the more number of people come forward, the more we get to learn on how to survive & grow a platform which need not believe in ‘profit’ being a bad word. Because, if you ask me, it is not. It is the most pragmatic & fundamental approach to any concern or cause. 

An example of such a successful company is Mirakle Couriers, which exclusively employs deaf & dumb people to deliver packages. Besides this ‘social aspect’, they function as any other courier company. Among other challenges, Mirakle Couriers found funding to be extremely limited for an otherwise ‘commercial & profitable’ venture and ended up relying on a host of fellowships & other rewards to keep them floating in their early days. What is however noteworthy is that Dhruv, the founder of the enterprise, did not give up and kept looking for new approaches & alternatives to make his ‘business’ more profitable, an exercise undertaken by any ‘sound entrepreneur’. At present, the company is successfully delivering 600 orders daily in Mumbai & is planning to incorporate people having other disabilities and expanding the current ‘impact-sphere’. 

Without the initial funding, we would not have a Mirakle Couriers. Without an appropriate one, we might not ever see the impact it can possibly generate. This is true for all social enterprises. The effects of getting decent funding for such organizations are manifold. As a start, more players in supporting this idea will give other 'risk-averse' investors a benchmark or an idea of how much ROI to expect by investing in social enterprises whose successes are not only measured by standard income statements. This will give a higher degree of clarity for incumbent investors and has the potential to attract more capital. 

This brings us to the question of how to make it a successful model. Eventually, this is a task which involves both the individual and the ‘government’s contribution’ to reap the intended success. The dual tools of deliberate policy decisions(by governments) and measured investments(private investors) with a certain risk appetite will be important factors to achieve the vast potential profit-makers have in achieving a ‘better & more equitable’ society, the objective of all social & philanthropic activity. If we look a few years down the road, this has a great potential to blur the lines between social & commercial enterprises in a way that leads to every enterprise contributing to a better-world and recognizing that this act of contribution is a fiduciary responsibility of theirs being a profitable organization/set-up. If we are able to achieve this mindset, it will be a huge step in developing the idea of a society which thrives upon fairness, equality & empathy- the three cornerstones which can re-define our social structure and inherent measurement of success. 

In the words of Tom Reis, a long-term investor with the Kellogg Foundation, “Everyone is willing to back the already proven horse, but very few are stepping up and taking the early-stage risks that not only would really help these social entrepreneurs, but also are part and parcel for investors who truly want high social and financial returns. High risk, high rewards –isn’t this the game we are supposed to be playing?” In this case, high rewards can certainly prove much more satisfying than a paper-denoted valuation of one’s investment.