WORKING FOR A CAUSE
Social enterprises have been gaining popularity in recent years. CHERYL LEONG talks to successful entrepreneurs about their labour of love and finds out how you can join the movement.
What to consider if you’re interested in setting up a forprofit business with a cause.
Anyone can set up a business, but if you want to do more for a cause that’s close to your heart, start a social enterprise. These businesses are still for-profit, but they have a social mission at their core, so you’re doing something good for society and earning a living too.
Social enterprises are steadily gaining popularity, says Leona Leong, founder of Aii Singapore, a custom-gift company that employs the less-privileged. “Compared with when I started in 2011, there is more awareness for social enterprises now. People want to be part of this growing movement – I’m seeing more companies supporting us.”
Even newbie Kerbside Gourmet, a mobile food truck
with a “buy-one-give-one” model to help underprivileged students, is reporting generous support. Founder Luan Ee says: “We get calls from commercial companies saying they want to work with us as part of their corporate social responsibility (CSR) efforts. We do events with them, where they encourage their employees to buy food from us, volunteer with us or ‘like’ our Facebook page.”
But don’t confuse social enterprises with corporate CSR, which is a way for profit-making companies to give back to society.
“Companies may cut back on CSR during an economic downturn. But the heart of a social enterprise is its social mission – without it, you wouldn’t have a business. So even if times are bad, it doesn’t affect what we’ve set out to do,” says Luan.
Setting up a social enterprise
As with any business, you need to register your organisation with the Accounting and Corporate Regulatory Authority (ACRA) of Singapore. However, ACRA does not have a social enterprise registrar at present.
“Some of us, myself included, register as ‘private limited’,” says Luan. “But as social enterprises are not a legalised business term under ACRA yet, most of us register to be credited as a social enterprise, and as a member with, the Social Enterprise Association.”
Launched in 2009, the Social Enterprise (SE) Association aims to promote the spirit of social entrepreneurship in Singapore. “We support social businesses by providing a network for them to learn from one another. At our networking events, our members find the peer-sharing experiences very useful,” says Amy Lim, assistant manager of SE Association.
Other platforms available to give social enterprises a helping hand are the Ministry of Social and Family Development and Impact Investment Exchange, which helps social enterprises raise capital efficiently, adds Amy.
Different business models
Besides registering your business and having a network of resources to draw upon, you must design the right business model. For Kenny, this means incorporating his social mission into his HR policy – by creating jobs around those he helps. He explains: “At O School, we design jobs for talented but disadvantaged youths skilled in street dance, by engaging their interests and employing them as instructors.”
Likewise for Leona, who recruits the less-privileged so they can earn a living. Luan, on the other hand, uses her business earnings – whether she makes a profit or not – to support her cause.
Bigger challenges ahead
The biggest challenge, says Amy, is remaining sustainable in a highly competitive business environment. “Having a big heart is not enough. Business sense is important too,” she adds.
Leona explains: “More than other businesses, we need sustainable ways to generate profits so we can carry out our social mission.”
Some social enterprises team up with commercial companies that have the financial muscle to help or sponsor them.
“I approached organisations to see if I could get sponsorships that would ease my financial burdens. Even now, I do a lot of cold calling to see if commercial companies would like to support our cause by inviting us to stop by to feed their employees,” says Luan.
Lack of support and awareness
Many commercial companies still prefer to perform CSR by donating to charities to get tax rebates instead. “Because social enterprises are not charities, we’re not allowed to accept help in the form of direct funding or donations,” says Luan.
So be prepared to put in a lot of hard work, says Leona, who did not take a holiday in the first two years after she launched her social enterprise. “It was tough, but it’s not a sacrifice to me because I love what I do and who I’m helping.”