What’s social entrepreneurship?

The concept of social entrepreneurship is a fairly new one in the Philippines, but it is good to know that it is starting to be embraced by more and more Filipinos. Though the term is self-explanatory, I myself did not appreciate its full meaning until I heard from the founders of the Social Entrepreneurship Conference here in a press conference launching the event, which Business & Leisure covered.

The group is now on their third such conference, the last one staged on Nov. 26-28 at the Crown Plaza Hotel. If you missed it (like I did), you have missed out on a great opportunity to learn about social entrepreneurship.

Many of us in the corporate world think that our CSR (corporate social responsibility) projects and our responsible business practices would qualify us as social entrepreneurs, but we are so wrong. As Mr. Joey Bermudez, chairman of the Maybridge Finance and Leasing Inc., explained: “A social enterprise primarily intends to deliver a social good…..in the process of doing so, it applies commercial methods, it applies the discipline of business, and it endeavors to be sustainable so that it will not depend continuously on donations so that it can keep doing its mission”.

That doesn’t sound as easy — it is actually taking on twice as much as a regular strictly-for-profit-only corporation. This group, which has among its leaders Ms. Chit Juan of the Philippine Coffee Board, Ms. Gretchen Philips, former Senior Advisor on Development of Foreign Assistance of the United States, and Mr. Roberto Calingo, Executive Director of Peace and Equity Foundation, has taken up the cudgels for the small Filipino farmers, among other marginalized groups. As Ms. Juan said, there is no chance for the small producers to participate in the world market, and promoting social entrepreneurship gives them this opportunity.

Foremost among the advocates of this concept is the Peace and Equity Foundation (PEF), a local organization whose board is composed of representatives of different business groups, NGOs, even indigenous people who have been elected nationally. They have foreign partners who fund some of their projects, but mostly, their funding comes from local sources.  They leverage with foreign agencies, and some of their biggest funders come from the Netherlands, but PEF is, primarily, a local organization.

The PEF hopes to be able to promote social entrepreneurship as best they can, and with a funding of P500 million at present, they feel that they can achieve many of their goals. They are into the coffee sector: from planting coffee beans to processing and marketing, and I am sure that this pleases Ms. Chit Juan, who has been indefatigably fighting for Philippine coffee, no end. The group is still looking for more areas to plant coffee (they have brought this advocacy to Mindanao, which has suitable land for coffee growing) and is now seriously looking at Kalinga. In the agri sector, they are promoting products like cacao and coconut, but they are also into non-agricultural projects like funding the supply of renewable energy, particularly solar panels in areas where there is still no electricity. They are also assisting communities in Mindanao as well as in Negros to provide potable water to far-flung communities. And in Cebu, they are experimenting on a new project: mini clinics for safe birthing, considering that our maternity casualties are those of an under-developed country yet. In these mini clinics, the babies will be cared for as well to ensure the well being of both mother and child.

Creating a vibrant and active social enterprise community is this group’s dream. It is not easy, but we have seen that a social enterprise can be both viable and profitable. One of the oldest social enterprises that many know of is Good Shepherd. You can’t go down from a weekend in Baguio and not bring some of their bottled goodies:  the iconic ube jam, the strawberry jam, etc. The nuns, according to Ms. Juan, have a good business head on their shoulders. Their ube jam now has a much longer shelf life, unlike before when you had to rush home from Baguio to refrigerate the ube jam because it’s shelf life was so short. They are constantly on the lookout to improve their products and develop new ones, and for every bottle of jam that you purchase; you help send a child to school.

The Peace and Equity Foundation can function as an equity investor, but if they help fund your enterprise, how many farmers can you help?  There are communities that now make gluten-free banana flour or rice flour, and if you need healthy sugar for your products, you can help our coconut farmers by using their coco sugar. These are only some of the instances where your agri-business enterprise, potentially profitable that it can be, can help sustain some communities whose business are agri-based as well.

Micro-finance is now a very promising sector, but marrying it successfully with social entrepreneurship is not an easy task. As Mr. Joey Bermudez said, “Microfinance is extremely and indecently profitable, that is a fact.” They function as a bank for the unbanked — serving segments of the population that are largely un-served or under-served by traditional financial institutions, but a responsible microfinance company can be both profitable and socially relevant.

There is no shortage of funds for social entrepreneurship across the globe. “The bottleneck is on the demand side — the ability to create sensible social enterprise models that can attract equity funds looking for projects, impact funds looking for projects.  The amount of impact capital looking for projects far outsizes the supply of social enterprises now operating in the country,” said Mr. Bermudez.

The challenge now is for government to create an environment that not hostile to social entrepreneurship, where the value chain can be maintained on fair grounds.  It would be nice if they can get tax breaks for starters, according to Ms. Chit Juan, because these social enterprises are treated just like any normal business enterprise. Perhaps, with the likes of Senator Bam Aquino who himself is a social entrepreneur; the country can adopt laws to protect and promote social entrepreneurship.

MABUHAY!!! Be proud to be a Filipino.

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