Solutions Frameworks For Social Challenges Comm 306 Blocks 5 & 6 Wednesday March 26, 2008
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Transcript of Solutions Frameworks For Social Challenges Comm 306 Blocks 5 & 6 Wednesday March 26, 2008
Solutions Frameworks
For
Social Challenges
Comm 306 Blocks 5 & 6
Wednesday March 26, 2008
Today’s objectives—
• Explore the social enterprise sector (SES)– definitions, characteristics, examples, issues– focus on nonprofit organizations
• Learn about SROI (social return on investment)
• Analyze the case of Habitat for Humanity
Definitions
Social enterprise sector— provides goods and services with social aims and ethical values (satisfies triple bottom line: social, environmental, financial)
Nonprofit organization/NGO— formed for the purpose of serving a public need, not profit seeking. A.k.a. social sector, third sector, charitable sector, philanthropic sector, independent sector. Often, classified as a 501(c)(3).
Corporate social responsibility— taking responsibility for a firm’s impact on the community; voluntary steps to improve the quality of life for the communities in which it does business
Social Enterprise Sector (SES)
U.S. NP Characteristics
arts, education, healthcare, human services (non-religious)
• 1.4 million NPs registered with the IRS• 5.2% of U.S. GDP• 8.3% of U.S. wages & salaries• $260 billion donated in 2005• 65 million volunteers
*Urban Institute’s Nonprofit Almanac 2007
Social Enterprise Sector (SES)
U.S. Funding
• 70.9% from fees and services• 12.5% from private contributions• 9% from government grants• 3.9% from investment income• 3.7% from other income• No change in constant dollars over past 5 years
*Urban Institute’s Nonprofit Almanac 2007
Global NP Characteristics
• $1.3 trillion in expenditures• World’s 7th largest economy• 5% average of country GDP • 21.8 million paid employees in 35 countries• 12.6 million full-time volunteers• 190 million part-time volunteers
Global Civil Society : An Overview (35 countries) 2003
Social Enterprise Sector (SES)
Global Characteristics
• 66% of expenditures are for labor v. 27% for non-financial corporations
• revenue—fees & charges 35%, government payments 27%, 65% private philanthropy
• 24% annual country average growth in employment v. 8% overall employment
UN Handbook on Nonprofit Institutions 20007
Social Enterprise Sector (SES)
Social Enterprise Sector (SES)
Who are the stakeholders?
1. “Customers,” clients, those served or aided
2. Management and Board members
3. Staff, volunteers
4. Community
5. Government (local, national, international)
6. Competitors
7. Lenders and donors
8. Partners (corporations, foundations)
Social Enterprise Sector (SES)
What issues and problems confront the SES?
• Who are the directors?• What concerns do paid staff have?• What are volunteers’ needs?• What characterizes Boards?• What financial problems exist?• How might the mission present conflicts or
limits?
The Social Enterprise Spectrum: Philanthropy to CommerceGregory Dees
Purely Philanthropic Hybrids Purely Commercial
General Methods:
Appeal to goodwill
Non-pecuniary rewards
Mission driven
Mixed motives
Some subsidy
Impersonal exchange
Arms-length bargaining
Market driven
Key Stakeholder Relationships
Primary beneficiaries:
Unclear or needy
Not required to pay
Subsidized pricing
Price discrimination
Third-party payers
Customer able to pay
Priced for profit
Capital sources:
Philanthropic
Donations/grants
Mixed debt & donations or subsidized investments
Capital market rate
Equity and debt
Work force: Volunteers with high
Commitment to social mission
Mixture of volunteers, professionals, paid staff or below-market wages
Paid employees, focus on financial rewards
Suppliers: In-kind donations Discounts, or mixture of in-kind and full price
Charge market prices
Governance Mission-constrained
Self-perpetuating Board stewardship
Mixtures of representation and self-selection
Balancing constituencies
Board elected by owners
Property rights
Fiduciary responsibilities
The Social Enterprise Spectrum
Mostly Philanthropic Hybrids Mostly Commercial
“Alleviating Poverty & Malnutrition: Successful Models”
Financing and development aid, Nutrition and Food Fortification, Food Production & Distribution
General Methods:
Appeal to goodwill
Non-pecuniary rewards
Mission driven
AGRA
B&MGF
ICCIDD
SAA & Burlaug
Mixed motives
Some subsidy
LAAD
ALCOSA
GAIN
TetraPak NutriSip
AMUL Dairy Coop
Impersonal exchange
Arms-length bargaining
Market driven
P&G NutriStar
Nestle
Monsanto
Key Stakeholder Relationships
Primary beneficiaries:
Unclear or needy
Not required to pay
Subsidized pricing
Price discrimination
Third-party payers
Customer able to pay
Priced for profit
Capital sources: Philanthropic
Donations/grants
Mixed debt & donations or subsidized investments
Capital market rate
Equity and debt
Work force: Volunteers with high
Commitment to social mission
Mixture of volunteers, professionals, paid staff or below-market wages
Paid employees, focus on financial rewards
Suppliers: In-kind donations Discounts, or mixture of in-kind and full price
Charge market prices
Governance Mission-constrained
Self-perpetuating Board stewardship
Mixtures of representation and self-selection
Balancing constituencies
Board elected by owners
Property rights
Fiduciary responsibilities
Play Pump—a nonprofit organization
Where does the money go?PBS report on rating charities
Banda Ache, Sumatra &the Tsunami