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Social Enterprise, Entrepreneurship and Innovation 2013-14

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Brian Smith

on 18 May 2016

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Transcript of Social Enterprise, Entrepreneurship and Innovation 2013-14

Definitions
Definitions

“A social enterprise is an organization or venture that achieves its primary social or environmental mission using business methods. Social enterprises build a more just, sustainable world by applying market-based strategies to today's social problems.” Social Enterprise Alliance (2010)

“Social enterprises are businesses owned by nonprofit organizations selling goods or services in the market place for the dual purpose of generating income and creating a social, environmental and /or cultural value.” Social Enterprise Council of Canada (2010)

What is a Social Enterprise?
Social enterprises are social mission driven organizations which apply market-based strategies to achieve a social purpose. The movement includes both non-profits that use business models to pursue their mission and for-profits whose primary purposes are social. Their aim is to accomplish targets that are social and/or environmental as well as financial: is often referred to as the triple bottom line. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose remains central to their operation. Canadian SE Foundation

What is a Social Entrepreneur?
A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change (a social venture). Whereas a business entrepreneur typically measures performance in profit and return, a social entrepreneur focuses on creating social capital. Thus, the main aim of social entrepreneurship is to further social and environmental goals. However, whilst social entrepreneurs are most commonly associated with the voluntary and not-for-profit sectors, this need not necessarily be incompatible with making a profit. Canadian SE Foundation
Tenets
Social enterprise is a different way of doing business.

A social enterprise is a business that trades for a social purpose.

The social aims of the business are of equal importance to its commercial activities.

Like any business, a social enterprise focuses on generating an income through the sale of goods and services to a market but the added value of a social enterprise comes from the way in which it uses its profits to maximize social, community or environmental benefits.
Principles
Iterative growth - Many models can be seed-funded with less than $20k because we start with a pilot project to begin building the market and test assumptions.

Self-funding - These ventures are decidedly entrepreneurial because they are self-funding rather than external funding dependent.

Socially responsible market scaling - Socially responsible organizations define their scope in ways that make it possible to define their growth as decline after their tipping point.

Customers as contributors - This is the shift from seeing people as needs to be filled and problems to be fixed to seeing people as gifts to be engaged.

Agile capacity building - These organizations follow the shifting edge of market opportunities in markets.

Building community - One of the more salient approaches is to weave social networks within their networks of customers as well as creating more connections between their customers and their communities.

Happiness indicators - These are the indicators such as appreciation, sharing, learning, aliveness, and simplicity. They are used as design principles in crafting the form, feel, and function of the organization relative to all of its stakeholders. These organizations explicitly make the practices of happiness more possible for its customers, staff, and partners.
Myth #1:
Starting a social enterprise requires minimal investment.

Myth #2:
Current staff already have the skills needed to run a social enterprise.

Myth #3:
People will buy from us because our cause is important.

Myth #4:
Reduced profit-motive + no extra costs = competitiveness.

Myth #5:
If it is not working we will know.

Myth #6:
Scaling up will be easy.

Myth #7:
This will take care of our revenue and we will never have to fundraise again!

Myth #8:
Non-profits can’t make a profit.

Myth #9:
Our program staff/services will get along with our enterprises because everyone is working for the same mission.

Myth #10:
We have a Board champion, that should be enough.
Strong entrepreneurial team

Supportive and engaged Board

Fit with overall goals

Thorough planning and dev’t process

Compelling, even tested, market opportunity

Unique competitive edge

Adequate financial controls and tools for planning cycles

Long-term and sufficient financing

Commitment to sound business practices

Tracking metrics to assess business, economic and social impacts
Success Factors
Myths
Myths, etc.
Entrepreneurship Ecosystem
Innovation as a Theory of Change
Private Sector Innovation
The Panarchy Cycle is Self-Similar. It repeats itself on many Scales. The higher the scale the bigger the impact and the slower change takes place.

The Scales are interconnected. A huge disturbance on a lower scale (Revolt) can have an huge impact on a higher scale when both cycles are moving into the Release State.

A Slow moving High Level Cycle can help to restructure a fast moving cycle by providing the template of the way the components were originally assembled (its CommunityDNA) (Remember).
social networks display features of social complexity with patterns of complex connections between elements that are neither purely regular nor purely random (see, complexity science, dynamical system and chaos theory), as do biological, and technological networks.
Human Systems Innovation
Week One: Panarchy, Innovation and Leadership
Week Two: Definitions, Spectrum and Principles
Leadership
6 Points of Starling Wisdom
Marilyn Struther, Trillium Fdn
http://thephilanthropist.ca/original-pdfs/Philanthropist-24-4-506.pdf


1. Generative relationships: seeking new work, resources, and vision through relationship with unlike others. (Al - Liberals then Conservatives)

2. Emergence: In constant development – never quite arriving at stability. (Mark - SoM iterations)

3. Networked: constantly in touch with the rest of the flock, they know where they are, exactly which part of the sky is theirs, and for how long. (Janice - Politicians to residents)

4. Hybridity: organizational forms that are neither one type or another, but combinations. (Aaron - Social Venture)

5. Entrepreneurial: independent and venture seeking: if they cannot finance the work one way, they will find another. (Gerry - equity to debt)

6. Collaborative: an ability to couple with others and then uncouple when the work is complete (Marcia - Partners, allies, etc.)
Week Three: Legal structures and dev't Paths
Business
Planning
Key Elements:
Business Plan
Business Description
Operations Plan
Human Resources Plan
Financial Plan
Marketing Plan
Performance Assessment Plan
Mission Impacts
Defined Objectives
Strategies
Measurements
Organizational Contribution
Mission
Capacity Building
Sustainability
5 Factors:
Social Capital
Partners
Week Four: Value Proposition, Assets and Alignment
Week Five: Ecosystem, Connectivity and Finance
Week Six: Scaling and Recommendations
Funding &
Financing
+
+
+
Topic #1
Topic #2
+
Interview a Leader
+
+
Vehicle of Choice
Homework
Business Model
+
+
+
+
+
Ecosystem Elements
Recommendations
Refine study and publish
+
Case study:
Non-Profit
Non-Profit with Charitable Status
Co-operative – For-Profit
Co-operative – Non-Profit
For-Profit Corporation
For-Profit with Limited Financial ROI (CCC)
Partnership
C3 features

The C3 very much mimics the UK's Community Interest Company.

As the C3 is a taxable corporation, there is no doubt that this structure can be used to do business, and generate profits.

The C3 features a 40% cap on dividends paid out to investors.

In cases of C3 dissolution, the majority of assets remaining after debts are settled must flow to a qualified entity (e.g. registered charity).

An additional layer of transparent community reporting is required at year-end, showing how the C3 has manifested its social, cultural, or environmental goals (which must also be embedded in its articles of incorporation).
Alignment
RDSP
a disruptive innovation
built in the ecosystem
Who's doing it
Who's doing it
Plan Institute for Caring Citizenship works to reduce the isolation of people at the margins of society, and to enable the contributions of all members of our community. Plan Institute provides training, consultation and research related to leadership development, personal network facilitation, social enterprise, caring citizenship and social innovation to a wide variety of groups and organizations in the citizen and public sectors.
Lean Dev't Process
Social Entrepreneur:
Muhammad Yunus
Social Entrepreneur:
Muhammad Yunus
Social Change
Social Enterprise:
Grameen Bank
Social Innovation:
Microfinance
Social Enterprise:
Grameen Bank
Social Innovation:
Microfinance
"Social Innovation is a novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals."
Stanford Social Innovation Review, Rediscovering Social Innovation, By James A. Phills Jr., Kriss Deiglmeier, & Dale T. Miller, Fall 2008
http://grasshopperherder.com/business-model-canvas-for-user-experience/
Ashoka
Skoll
Community Futures
Renewal Fund
Social Impact Bonds
Credit unions
Unreasonable Inst
Community Futures
Crowdsourcing
Social Impact Bonds
Echoing Green
Angel investors
Community Futures
Social Impact Bonds
Credit Unions
Gov't (?)
Philanth's
Other sources
http://cashtostart.com/10-crowdfunding-websites-entrepreneurs/
2004:
Idea
2005:
R&D
2006:
Election
2008:
Ascent
2007:
Flaherty
2009:
Sales
2011:
Review
2012-3:
Refining
2014:
Updated
Impact By The Numbers

Total deposits to date: More than $2 billion
107,027 RDSP’s have been taken up since Dec 2008
The Big 5 Canadian banks offer the RDSP
Contributions from Families: $728.2 million
Contributions from Government Grants: $997 million
Contributions from Government Bonds $430.5 million
Note: Numbers accurate to June 2015
The Innovation

The Problem

Due to improvements in life expectancy for people living with a disability, many are now outliving their parents and close relatives. While this is a welcome change, it presents a new problem as it pertains to saving for health related costs into the future. Strict benefit guidelines prevent them from building financial assets that will allow for independence in their later life.

The Innovation

The RDSP allows anyone eligible for the Disability Tax Credit to invest up to $200,000 in savings tax-free until withdrawal, and to spend the money in whatever way will benefit them most. Family members and friends can contribute to someone’s RDSP, and help plan for that person’s long-term financial security. The federal government matches contributions through Canada Disability Savings Grants and Bonds. The Bonds – available without contributions – are especially valuable for people with limited financial means.

It enables people to accumulate financial assets rather than be dependent on government benefits. It provides them with greater choice and control over their lives. In order to accommodate the RDSP as an asset, most provincial and territorial governments have waived their asset limits allowing people to receive government benefits, and they have eliminated claw-back on RDSP expenditures. Further, there are no restrictions on what the funds can be spent on.

The RDSP helps hundreds of thousands of disproportionately poor Canadians living with a disability to lift themselves out of poverty, overcome isolation, and participate more fully in their communities.
Dec '13
Spring '13
June '13
Summer '13
Sept '13
Dec '12 - Social Entrepreneurship, property under offer
Spring '13 - Build Engaged Community, parlour meetings for feedback
June '13 - Creative Destruction, who's skin is in the game
Summer '13 - Business Model Dev't
Sept '13 - Council boards, community buys in
Fall '13 - 1st Capital Campaign
Dec ' 13 - Scramble to Complete, property purchased
Jan ' 14 - Build org structure, sister orgs
Spring '14 - Farmers market launch, and many events
Fall '14 - Designs and 2nd Capital, Campaign prep
December '15 - $2M deadline for campaign
February '16 - breaking ground
October '16 - opening


Oct '13
Nov '13
Dec '13
Dec 18'13
Jan '14
Scale vs Depth
Demonstrating Value
Spring '14
Black - 1st loop
Red - 2nd loop
Blue - 3rd loop
Brown - 4th Loop
Fall '14
Adoption Takes Time
Dec '15
Feb '15
Oct '16
How the RDSP Works
While every scenario is different, the following illustrates how the RDSP can be applied:
1. A family registers their son, Josh with an RDSP
2. Josh receives disability benefits and has an income of less than $24,183
3. Each month, Josh’s parents are putting $125 in Josh’s RDSP for a total of $1500 each year
4. As the RDSP is based on Josh’s income, he will receive both the Grant and Bond
5. The Canada Disability Savings Grant will contribute $3500
6. The Canada Disability Savings Bond will contribute $1000
7. Ted decides to place the funds in a conservative fund for stable growth
8. When Josh is 54 years old, his father plans to give his inheritance early and make a one time gift into the RDSP of $55,000. This means there is more personal contribution in the RDSP than government contribution, and therefore more flexibility for Josh when withdrawing funds.
9. With a return of 5.5% annually, Josh will have $432,000 by the time he starts withdrawals at age 55.
10. There will be no claw back on the funds.
11. This means an additional $15,000 annually to help Josh meet his medical needs and leave his parents with the peace of mind that Josh will be cared for.
All calculations are unique to the particular person’s situation. For an accurate self-assessment visit the RDSP website and use the RDSP calculator: http://rdsp.com/calculator
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