Improving social entrepreneurship in Malta
Zaar.com.mt manager Matthew Caruana was recently invited to give a presentation at the recent Social Entrepreneurship for Breakfast event, organised by Kopin Malta. The event marked the launch of Kopin’s social enterprise game EntrInno, as well as a project dedicated to mapping social enterprises in Malta – from organic farms to fair trade shops. With this in mind, Matthew talked about the current state of social enterprise in Malta and detailed what can be done to improve the ecosystem for it.
“While the traditional focus of entrepreneurs might be business-oriented goals such as profit and revenue, a new breed of ‘social entrepreneurs’ has evolved, who also consider the potential benefits to society their venture might offer,” Matt says.
“Social entrepreneurship typically engages with social, cultural or environmental goals often associated with the voluntary sector, although their outcome is not necessarily not-for-profit. Social enterprises born of this sector – organisations established to support and apply commercial strategies to the philanthropic goals of the social entrepreneur – are commonly profit-making.”
The growing trend of social entrepreneurship has been further facilitated by social networking and social media websites online, which enable entrepreneurs to reach a significantly larger audience that is like-minded and may be willing to collaborate.
“This ongoing long-distance conversation on social topics between entrepreneurs and their supporters has also led to a rise in fund-raising online through crowd funding on platforms such as ZAAR, although the monies raised are intended to improve social conditions longterm, as opposed to giving handouts as per charitable work,” Matthew continues.
“Social entrepreneurship puts a signifi- cantly greater emphasis on creating value rather than on the redistribution of wealth, shifting from fund-raising for profit and revenue alone, to combining profit and revenue with real engagement with the community on a deeper level.”
There are real incentives, meanwhile, to encourage entrepreneurs to consider merging philanthropy into their campaign. Besides support structures in place such as mentorships and internship schemes, the financial incentives could include tax benefits, loan guarantees and grant schemes. “We need to see an improvement in the funding element,” Matthew says. “It’s important to create the community, and opportunities, for social enterprises to benefit from funding – especially as businesses in the area are sometimes excluded from schemes. Beyond that, it’s also important to boost the infrastructure around them, including the addition of mentorships and co-office spaces that make it feasible for resources to be shared.”
Finally, Matthew stresses the need for social enterprises to get themselves in shape so as to attract investment. “It’s important to start with the right legal structure and a sustainable business plan that sets you apart from a charity. After all, as a social enterprise you cannot think like a charity but have to implement commercial ways of working and have revenue models that don’t depend on hand-outs.”
With that in mind, it’s good to note that additional funding opportunities may also become available to social enterprises – not only in terms of crowd funding online, but also for local investors keen to invest in social wellbeing projects. “Perhaps there would also be the possibility of support from the Malta Development Bank, a European Commission-approved financial institution that will specialise in local development,” Matthew concluded.