Rural Revitalization: How Social Enterprise Keeps Rural Communities Viable

Rural Revitalization: How Social Enterprise Keeps Rural Communities Viable

Rural communities have unique ways of addressing key challenges such as distance, size of market, lack of infrastructure and services, out-migration of youth, and the devastation brought about by branch closings, whether it be a grocery store or a manufacturing plant. Attendees learned how various intermediaries and rural social enterprises from around the world have risen to these challenges, and helped preserve the viability of their communities.

This session was moderated by Ethel Côté, Social Enterprise Practitioner and Developer, Canadian Centre for Community Renewal and featured:

  • Elena Casolari, CEO, ACRA-CCS,
  • Michael Craig, Global Fellow; Strategic Advisor, Acumen and BASIX Social Enterprise Group,
  • James Dunbar, Founding Chief Executive, New Start Highland

A special thanks to session sponsor Enterprising Non-Profits (enp) Canada.

Transcript of session (Includes Q&A):

Elena Casolari:  I’m very pleased to be here with you today and very much overwhelmed because I love social enterprise and I love social entrepreneurs. It was not the case some time ago. I have a financial background and I used to work for a mainstream investment bank for many years. I belonged to what I regard as the greedy crowd. One day I had really enough of making money, because it was money without values.

I was looking for something else. I used to work in emerging markets, especially in India. I realized that my work was not very helpful to the many people who didn’t have any access to finance. I took some time and decided to join the social space and I’m very happy.

I regard myself as an intermediary in this beautiful universe of social enterprise. I joined an NGO seven years ago and I started travelling in many countries. The more I traveled the more I realized that there was something wrong in the traditional and conventional approach of a development, of charity.

I was lucky enough to meet many social entrepreneurs in many countries and I found new ways. We have moved our organization from a conventional organization deploying grants into an organization which is supporting social enterprises in the many countries where we do work.

When I was asked to join the panel I really thought about the examples I could bring to your attention. We have many in our pipeline. Most of them are really very good in explaining and in showing what social enterprisers do in rural communities in addressing social problems and finding long-lasting solutions.

I decided to pick one example from my home country because in the last couple of years we have gone through a very deep crisis and recession undermining the fundamentals of our economy and shaking the confidence of our people. Social cooperatives and social enterprises have shown that this space is very resilient, much more than other economic sectors.

I’d like to tell you about a social enterprise in Southern Italy. I don’t know how many of you have been in Italy but the South of Italy and the rural areas in Southern Italy are very much depressed and marginalized, rural communities that face many problems such as youth unemployment that is rising very dramatically in the range of 40% – 50% because of the lack of opportunities there.

They face youth out-migration and on top of that, unfortunately, we have a strong linkage between the local economic sector and local mafia. Another very chronic and rooted problem is exploitation of the migrants coming from Northern Africa and Sub-Saharan Africa. I don’t know whether you read the news today or heard about the tragedy we had just yesterday in Italy. Many people died trying to reach our coast from Eritrea and Somalia.

I was very touched last night when I read the news. Unfortunately, these people coming to Italy and undergoing a very difficult journey in many cases are then treated as slaves and exploited by local landlords.

Cooperativa Villa San Giovanni made a great work trying to provide opportunities to migrants, making them regular workers and not just seasonal workers, leveraging what is a local resource – oranges, very  good and tasty oranges, very famous ones.

By leveraging these products they succeeded in distributing them in many places in our country, providing jobs for youth, migrants, also improving the margins of the local farmers. More than that, they made people in the community feel very proud of belonging to that community.

They were able to infuse a sense of local culture, belonging in a place where there were almost no youth any longer. It’s a really great example thinking about what social enterprise work can do in rural communities.

The other example I’d like to share with you is very far away from Italy. It’s in Uganda. It’s a social enterprise which is actually now in our investment pipeline. We are making a due diligence on these social enterprises as a possible investment. The Joseph Initiative is a social enterprise established in Western Uganda in very depressed rural areas where 80% of the people are employed in the farming sector, producing maize. Uganda’s plot productivity is one of the lowest in the world and the farming sector faces the problem of huge fragmentation among the farmers. Farmers don’t have any negotiating power dealing with intermediaries there and they have very unsecure income.

The Joseph Initiative is a processing and a trading social enterprise, sourcing maize and marketing it in Uganda and in other neighboring countries trying to ensure a stable and fair price income for the farmers in all the rural communities.

Obviously, they are really trying to address a huge problem there.

Finally, I’d just like to show you something about a social enterprise we incubated in Tanzania. It’s a micro-hydro power generating company, a rural community-based enterprise that was established three years ago. The challenge here was to provide energy to the rural community, which was experiencing out-migration. There were no economic activities there. Since the company has been established there are many other economic activities flourishing there.

The most brilliant achievement of this social enterprise has been the feeling of pride in the rural communities. Everyone knows that they contributed to make these social enterprise successful because they are the ones who pay the tariff and they are the ones who make the sustainable enterprise.

They set up an elders group who decide how to deal with many conflicts that they can rise when you have to decide who will get the first energy connection. They are really in power of this enterprise and they are very much empowered by this enterprise.

These three examples really tell you how much rural social enterprise can really revitalize the rural community and infuse them a sense of belonging and local identity. Thank you.

James Dunbar:  A little thing about me. I’m a proud and passionate Scotsman who believes in the potential of the people of the community I live in. I’m gonna talk about social enterprise from a rural highland Scottish perspective.

Before I begin I think we need to start with a little bit of history. The history of the highlands of Scotland; we’re famous for many things. We’re famous for monsters, Loch Ness monster. Lochs, mountains, glens, some of the best whiskey the world … sorry, the best whiskey the world has ever seen. I contest anyone who would try and prove that wrong.

Apart from that, there’re also some very serious pieces of history that are still filled with a rural realism today. Have you heard of the highland clearances? Okay. For those of you who haven’t, the highland clearances occurred in the 18th and 19th century. It was when the Duke of Southerland decided that the people of Southerland needed to be cleared of their land. And there was a mass exodus.

People had to leave and go to the lowlands, go to England which is not part of Scotland for the record, no more than America is part of Canada. Okay, I’m touchy a bit.

They went to lowlands. They went to England. They went to Australia. They went to USA, and in no small number came to Canada. So who knows, if you’re Canadian you may be a product of the clearances. But they were horrific. People were cleared from their homes to make way for sheep.

It was all about a business plan that was more profitable but didn’t give consideration to the people. People’s lives were brutally destroyed. Our present is somewhat different. However there’s still an exodus continuing from the highlands.

People, bright young minds, leave the highlands because they’re attracted by the bright city lights, the attraction that city life brings. And as a result it’s more challenging in rural areas. The bright minds who are the people we want to employ are gone.

I’ll tell you a very quick run through New Start Highland. We do a range of things. We provide house and support for people that have been homeless and have taken up accommodation. It’s all about equipping them to have the skills to live a sustainable life style.

We provide the furniture. We recycle about a thousand tons of furniture every year – sell some, give some away to people that can’t afford any. We have a retail chain that turns over probably about a million a year. We’ve got shops, we’ve got an online part of that. We provide employment training for the hardest to reach people.

We work with people who have criminal backgrounds, who have addiction backgrounds, who have been long term unemployed. One guy recently, 20 years unemployed, believed he was unemployable and after going through our training program was one of 90 people to apply for a mainstream job, went through a three-stage interview, and got the job. That’s just normal.

We’re all about changing lives. We recycle bikes. It’s good that people can get fed and afford to buy a cheaper bike. It’s good for our environment as well. We have a painting and decorating service. It’s kind of obvious about this. We have a landscaping business and that’s pretty obvious too.

We have a removal business and a storage business. And as I mentioned earlier we have online retail. And we’re just about to embark on a business finance initiative.

We do all of this. We do all of this in a value-centric way. We believe it’s really important to realize the potential of every person we encounter, whether they be the chief executive, a chairman, a trainee, a customer, a human being. There’s a list of other values.

Environment’s important to us. The other stuff’s important but I don’t want to waste your time in telling you about our values. Relationships, they’re crucial in a rural setting. I’ll tell you more about that later.

But all of these lovely values that we operate within, it’s crucial that we have a sustainable business model in the middle. You can be as nice as you like. You can be as social as you’d like. If your engine isn’t healthy, you’re not gonna be there tomorrow.

At the heart of the sustainable business model is our purpose to transform highland lives. Having a sustainable business model’s great, but we need to make sure our focus is not taken away from our core purpose.

Now this picture is one of the few ones that aren’t from the highlands of Scotland. But as a chief executive of our social enterprise in a rural setting, that’s what life feels like some days. But some of our challenges are the available workforce. A lot of the bright young minds are attracted away to other parts of the country.

We have a limited market size, hence the reason we do so many things. There’s a limit to how many people in our market. It’s difficult to achieve scalability within a rural setting. Distance, okay, Scotland’s wee compared to Canada, but in a rural setting distance’s still a challenge.

Last but not least is infrastructure. There is less investment in infrastructure. I live in the capital of the highlands, but we have a killer road and it is a killer road, one of the worst killing roads in Scotland is the main road to our city from the South.

Solutions, much more important. I believe quality is utterly crucial. I think that the key to doing business well, to doing social enterprise well in any setting is do the highest quality you can, and because of this we want to be the best we can. We compete against mainstream businesses. We’re currently the best environmental company in the North of Scotland.

I have the privilege of being the director of the year for the whole of the North of Scotland. I’m competing with some huge businesses. There’s businesses that have a billion turnover and we’ve managed to beat them as director. We’ve managed to come second for the UK, director of the year for the public and third sector. I’m currently Scotland’s social entrepreneur of the year.

The first thing I do when I get back to London when I’m ravished with jetlag, ravished it probably the wrong word to use, I go to be a finalist in the UK entrepreneur of the year. I’ve only got three people to beat and I’m there.

Quality’s important. Let’s not think because we do it in a rural setting we can be anything less than brilliant. Anyway, that’s enough about quality. You may guess it’s a little bit of a passion. We need to do it brilliantly well.

Relationships are fundamental. In a rural setting if you blow up one relationship, you don’t blow up one. People in rural settings talk to each other, we gossip, and then we talk some more. Relationships are crucial. We have brilliant relationships with Scottish government, with local government, with every stakeholder, with our community, with our staff, with our volunteers, with our trainees, with everyone.

We value relationships and they are a solution. If you’re the chief exec, have a good relationship with your board. It’s crucial. Have a sustainable business. No point having a brilliant idea if the idea isn’t gonna be there tomorrow. We have a duty to the people in rural settings that our business will be there tomorrow.

It might mean we need to put our ego aside and work with someone else to deliver it but we have a duty. We need to lead listening. It’s a solution: listen to your people, listen to the community, listen to what’s coming on the horizon, listen to politicians, lead your company, be dynamic leaders, but lead listening. Don’t think you know all.

Be evolutionary. Don’t look to stand still. Constantly evolve. We are so different to what we were 12 years ago. Continually be an evolutionary company and don’t settle for being evolutionary, be revolutionary. If you’re a social entrepreneur I believe you should want to change the world. That’s my ambition. I can change the world one person at a time. Each of us should share that passion.

More solutions. I’m solution-focused. My daughter picked the pictures. I think she’s great. Solution cannot seem obvious all the time. Sometimes they can seem like a really stormy sea. We’ve embarked on a graduate program. Young people are going south. We’re taking them back. Every graduate that comes to work with us, I give them a target. I say, “At the end of your program if you hit this, I will employ you.” Every graduate we have taken back, we have either employed or we have supported to get into a better job somewhere else.

I believe diversification’s important. You’ll see a bit of the list of things we do in a rural setting. You can’t settle for just one or two things. You have to go abroad if you want to have a sustainable business.

I think energy’s important. I’ve been getting some counselling to help me, no, rubbish. Energy’s important. You need to be dynamic. You need to be alive. You need to be someone that people can believe in. You need to be willing to push the ball up a hill because it’s hard work.

If you’re a social entrepreneur, you need to be willing to push the ball up the hill. It’s hard work. It’s hard work beginning. It’s hard work continuing. And it’s great. Find some way that you can tap into an energy source. I could give you a whole lecture for an hour on it. If you’re interested, come and talk to me. I may bore you but I will talk to you about it.

Integrity is crucial. In a rural setting people have to be able to trust you. Your people need to know that you’re the same ED or chief exec today, tomorrow, and forever. Have integrity with your stakeholders.

If you do something that you think a stakeholder isn’t going to find out about, have the bottle to just go and tell them, “We’ve got this wrong, but this is how we’re going to fix it.” Integrity is crucial.

Professionalism. Be a shining light. Be someone. As a social entrepreneur, the private sector, the public sector, look at you and say, “I would like to be a bit more like you. How is it that you deliver such a strong business? How do you deliver such incredible change?” But do it in a professional manner.

Last but not least for this slide, have a focus on your customers. Your customers are your kings, whether they’re buying from your shops, whether they’re people you’re training, whoever they are. If you’re painting, if you’re decorating their houses, your customers are king.

We say to our customers, “We promise you 100% satisfaction.” We’re getting very close to the last slide. Not quite, but we’re getting close. As a social entrepreneur delivering a social enterprise in a rural setting, we have a duty of care to the community. We are a key business in our community.

I had a local government leader come and visit me recently. And he said, “James, do you know you are the most important business in the area you operate?” And I argued with him, I didn’t realize we were. But we are a key business.

People in the community depend on us. One in ten of the highland population have used our services. That’s a lot of people. Yeah, tenth of the population have used our services. We have a duty to be there tomorrow. We have a duty to ensure that they can rely on us tomorrow.

As I touched on earlier, rural communities really depend on social enterprises. Because it’s not viable often for the private sector to deliver. Sometimes it’s too difficult for the public sector to deliver. But rural communities connect and rely on social enterprises.

Unlike the highland clearances, unlike having a really strong financial business plan that doesn’t take, or doesn’t give due consideration to the needs of the community, when we’re business planning we need to consider the people. We may not come up with the most financially attractive model in the end of our planning. It will still be profitable, okay? It will be profitable. But the people come first. We exist to make people’s lives better. We exist to transform highland lives. We need to bear in mind when we’re business planning that we give due consideration to the needs of our communities.

In summary, operate a sustainable business, be robust, be strong, deliver quality. Social enterprise isn’t an excuse to be less than brilliant. Social enterprise in my opinion should be the best, the highest quality model of business our world sees. Be willing to diversify. But when you diversify bear in mind what your skillset is. Bear in mind what your social purpose is and diversify in a way that you stay true to what you’ve been called to do. You stay true to your mission but be willing to diversify.

Enterprise is just the engine. I talk about strong business, but it is just the engine. Don’t let the money bit drive you. The money’s the engine to enable you to transform your community. And forgive me if I hammer this point home: give due consideration to the impact on others. And it’s easy when you’re successful to almost take your eye off that one because people are saying, “You’re brilliant. You’re big. You’re the biggest company in the area.” It’s easy to take your eye off that ball.

But give due consideration to the impact on others.

This PowerPoint was created by my 14-year old daughter, Natalie. That’s why her name’s up there. She does all my PowerPoints. Be aware when you’re in a rural setting of the gifts and the skills that are around you, that you may not see naturally.

Michael Craig: All right. What to share? That’s a good question. I’m not as funny as a Scotsman, not as eloquent as Italian, but I’m Canadian. Before I go on I have three questions for you, three very important things in my life.

Has anyone heard of Basix before? If so, put up your hand. Okay. Has anyone heard of Acumen before? Okay, that’s a little bit more. Has anyone heard of Maple Leafs before?

Well, I had the fortunate opportunity for the last two evenings for the first time in I’m not sure how many years of watching not only the Leafs, but watching the Leafs win two games in a row. So uh I’m gonna take that applause for myself and my team.

I have been on many plains over many years. One of the joys of working with Basix over the past years has been working with the rural farmers. And let me share a story about one of the farmer meetings I was at. It was in a rural region of Krishi. In a small cramped room there was nine men and one woman.

The local language was Oriya, a language I’m not familiar with. As a result, I was just able to witness non-verbals in the meeting; didn’t really know exactly what was going on. That’s what happened a lot during my time in India. I didn’t really know what was going on. I just kind of was there and going along with it, hopefully making it better.

One thing I noticed about the woman in the back of the room, who is Manasi Patri, who you see there, she was very quiet, a little reserved. As the meeting was going on I was thinking, “Hmm, we’re not gonna get her as a customer. She just doesn’t seem to be interested.”

But just as chai was about to be served Manasi stands up and first quietly, but then in a demanding fashion in the local language starts questioning our agriculture extension service work. I’m thinking, “Okay, this is good.” And not only that, but a few men stand up and tell her you know, “Be quiet,” or something like that. She points at them, stares at them, and they sit right back down.

In India this is amazing. I’m excited. So Manasi comes up to us after the meeting and says, “I want you to come see my cows,” in the local language, and then also says, “I want you to talk to you more about your services.”

So we did what Manasi wanted and we went to her home which is just down the way. As we’re walking to her one room house, walking behind, I see the cleanest lean to cow shed I’d ever seen. And trust me, I’ve seen a lot of cow sheds.

This wasn’t what amazed me though. What amazed me was Manasi’s ingenuity. Manasi had rigged up a ceiling fan that was oscillating on high keeping her cows cool. Manasi recognized the importance that keeping her cows cool and comfortable had on the quality and quantity of her milk. She also recognized through being quiet and listening in that meeting and then demanding and questioning that we could help her.

She was looking for assistance, but assistance in terms of a product that she was willing to pay for and she was willing to partner with. At Basix Krishi that’s what we were there for. We were there for those rural customers who were looking for a little bit of assistance. Not a handout, they want to work with someone to make their lives better.

Before I go on and talk more about our work with uh Basix Krishi, I should probably take a step back and talk about Acumen because I’m also associated with Acumen. Now what is Acumen? I saw a lot of this side of the room had known about Acumen and this side of the room not as much. So I’m going to talk to this side of the room a little bit more.

Acumen is a firm that invests in companies, ideas, and leaders. As simple as that. In terms of companies, we’ve invested in almost 80 companies and approximately eighty million dollars over the past 12 years. What does that equal out to? Approximately one million dollar average for the finance people in the room.

But it’s not just about the investments. It’s about the impact. Currently it’s around 100 million lives impacted through following opportunities and 58,000 jobs created and supported. Acumen’s not just an investment company. It invests in leaders and ideas. In terms of leaders, I have the opportunity to be a part of the Global Fellows program and that’s why I have been in Basix Krishi for the past year.

There’s ten of us per year who go through the program and work in the portfolio companies that Acumen has invested in. We also have a Regional Fellows program. And for both of the Fellows programs I’m happy to talk to people more about it afterwards, but we’re gonna talk about Basix a bit more.

We also have Chapters. I believe there’s one in Calgary. Is there anyone here in the room who’s part of the Plus Acumen Chapter in Calgary? No. If not, check it out. Acumen’s offering online leadership courses, really just courses on impact investing. And so please do check that out.

But enough about Acumen and more about the three amigos that I wanna talk about today. They are Charles, Mehmood, and Vijay. These are three individuals who I have been impacted by. I’ve really seen what they’ve been doing in the rural communities and I wanna share their stories with you today.

First, before I go on all three of these, when I look at them and I take a step back, I think, “Okay. What are the similarities in their situations?” We talked about a formula, what’s the best way of going about this? Can we take the developed world and developing world and kind of come up with a great formula?

I can tell you that I have part of the formula, but I don’t have the whole answer. And I hope some of your questions might get us to some more answers afterwards. But I believe it’s driven entrepreneurs and open, willing, and probably demanding community, and also government institutions are required.

The first of my three amigos, Vijay Mahajan. Now Vijay is a man who knows a little bit about rural economic formulas. And he’s lectured me on this a number of times. Vijay is a serial social entrepreneur. At one point he was head of a microfinance fund in India with a 400 million dollar portfolio. He is a thought leader in rural development as the chairman of CGAP. And he’s really an economist at heart.

I’ve had many late night discussions with Vijay. And it always turns back to economics in terms of social development. His passion of creating rural solutions is through his BASIX Social Enterprise Group, which has been going on for about 17 years now. And right now there’s more than ten organizations underneath the BASIX Social Enterprise Group, mainly work in India but also doing some work in East Africa and other parts of South Asia.

What do we do? Well, there is some finance activators. There’s agriculture extension workers which I’ll talk about in a second. There’s rural banks, skill training centers, dairy producer farmer group managers, and much, much more. The one number that Vijay always hammers back into my head is that we’re currently working with over one million farmers globally.

A large organization doing many different things. But what I wanna talk to you more about is our agriculture extension services business which is the business that I was working and helping manage this year. Now when I first found out what I was doing or where I was gonna go to work, my mother was quite confused.     What is agriculture extension services? Well, I explained it to her this way, and let me explain it to you that way as well. When your grandparents, your parents or elderly relatives get sick but aren’t sick enough to go to the hospital generally here in Canada a visiting nurse will come see you, whether it be once a week, once a month, or whenever necessary.

Well, at BASIX Krishi we do that, but for cows, goats, sheep, duck, chickens, and crops. My mother’s a visiting nurse in Canada. She gets that. I’m not sure if you guys get that. Okay, enough. Working alongside Vijay I’ve come to four realizations and I wanna share those with you today.

Number one, finance-only solutions aren’t solutions for the rural area. Number two, at a minimum you need to pair an activity with a revenue-generating opportunity to make it sustainable. Number three, adding the market infrastructure or market linkages to this problem allows for growth and scale, allowing it to replicate. And number four, government, especially in India, sometimes are negative in short term, over the long term always a great partner at the table.

Moving from Vijay down to Uganda with Charles. One thing that I love about Charles is he always smiles a lot. He’s not smiling enough in this picture but as you can imagine normally he’s got a bigger smile on, even if it’s 2:00 am and one of his field reps is calling him about some seed that we’re into negotiations for.

Now Charles comes from a Northern Ugandan community close to Gulu, where the organization, the Gulu Agriculture Development Company that he works in, is operating. And to paint the picture for those of you who are not aware of the past history in Northern Uganda and Uganda specifically, it’s really recovering from 25 years of civil war. That’s 25 years when people didn’t have factory jobs, 25 years when the agriculture land wasn’t really being used. It was only being used as a war area.

So it not only lacked the actual people working, it lacks the infrastructure to allow farmers once they’ve gone back to the land to actually bring the product to market.

This is a story about ‘sometimes the government needs to get a little push’. And in the case of GADC, the government in 2009 asked Bruce Robertson who is a serial entrepreneur and a cotton ginner to help set up this cotton ginnery in Gulu, Uganda. There was one there back in 1963.

He hired Charles to set this up. And Charles inherited a factory that was from the 1960s. It was bullet-ridden. There were no employees. There was nothing there. Four years on they now have 550 employees. They’re working with over 40,000 farmers. They are now not just into cotton, but they have organic cotton. They have sesame. They have chilies. And this year they’re coming out with sunflower.

Creating a lot of opportunities for all the small other farmers around the Gulu region which previously didn’t have a market that exists.

For GADC it was a little bit of the government but you had a strong entrepreneur, but you also had that community that really demanded the services. And you had some employees who’re really passionate about the space and passionate about the area that they were working in.

Tthat was the kind of formula that I saw there. Finally an individual that’s different than Vijay or Charles in the fact that he’s not working for an organization or not working through a larger organization. Mehmood Khan is doing it on his own. Now let me tell you a story about how I met Mehmood Khan.

We were in a small car by India standards. And after walking around Calgary over the last few days that’s like a tiny tiny car by Calgary standards. We were going down to see a farmer group who was interested in our services. Mehmood was going down as well because he was doing work in the area, owns land, and is actually a farmer in the area.

I was in the middle seat. There was a large BASIX employee here on my right. And there was Mehmood Khan who you see in the pictures there sitting to my left. My head was kind of like this and I definitely had welts afterwards because I hit the ceiling so many times, the roof of the car.

But I wasn’t paying attention to the discomfort. I was paying attention to what he was saying. Now Mehmood Khan, 35 years, Unilever experience around the globe. When he retired he said, “My career wasn’t enough. I need to do more.” Mehmood comes from the rural area, just outside of Delhi, known as Mewat. And his family has been there since the 1400s.

It’s an area that just as James was mentioning, you know, there’s people that go from north to the south. Mewat is where people are born and they leave to go to Delhi. And he was really passionate. This area was just being left behind.

Through associations with family, he inherited some land and then purchased some more. He has about 88 acres of land right now. What he’s trying to do is build a sustainable farm on it. He has eight families working there and he’s trying to create the facilitation necessary to actually make this work. Once it’s profitable he’ll do it on another 88 acres of land.

What does that mean? It means that his cows, their manure is picked up, put into a decomposer and they actually use the gas to heat the homes and to light the homes. They’re using that as fertilizer. The milk and dairy products are being sold in local markets. He also realized that not everyone was cut out for farming.

For many of the women and some of the men he realized that he had to have a small factory on the land as well. When I was there they were creating uniforms for the local police and security guards. Now it’s not sustainable yet. It’s in year three. He’s still putting capital into the project. But Mehmood believes that by year five it’s gonna be a break-even project and he’s getting ready to move to the next one.

In conclusion, what does this all mean? Well, through these three amigos that have impacted my life I’ve realized these three things and then we can discuss about what more you need to add to the formula to really be getting somewhere. In each rural location, it’s a different equation. It’s a different equation for the experiences I’ve had. It’s different equations for Elena’s experience. It’s different for James’.               It’s different for Vijay. It’s different for Charles, and it’s different for Mehmood. But there’s one thing that I think they all have in common and it’s these three factors are connected.

Now some of you may have been coming here, looking for answers. Apologies for those of you that were, but there’s no clear answers. There’s no clear formula. Hopefully you’re leaving with better questions and even better questions for the next 30 minutes of our Q&A.

Question: I have this idea that the hospital could be a local economic engine a rural agricultural community. I’m interested to know what public procurement policy, if any, and how that might influence the social enterprises and specifically to James, I’m wondering what percentage of your avenues would be earned revenues as opposed to government revenues?

James:  Seventy-five to eighty percent is earned. In that I include contracts that are contracts with a local authority or local government.

Question: And would that be employment type contracts?

James:  No, no, no. I don’t touch our government’s employment contracts. Not because I love our Scottish government but because they come from the UK government, I love you dearly but you need to improve your employment contracts.

The UK government is where they control employment contracts for the whole of the UK. They are a disaster. In my opinion they don’t focus on the people who are farthest from being job ready. And they are the people I want to work with.

You asked a question about procurement? Our Scottish government is working very hard. We’ve got the senior civil servant for the third sector with us in a party. They’re working really hard on ensuring that social enterprise is fully considered in the policy for procurement. That’s an ongoing piece of work, the Scottish government recognizes that social enterprise brings incredible added value so not only can you get the quality at the same price, but we bring a whole range of other benefits.

Question: So their RSP process will consider a triple bottom line type approach?

James: Yes, absolutely. A hundred percent.

Question: Yeah. It’d be nice to see that in Canada. Yeah.

Question: We’re urban but because we’re an agricultural producer coop I feel like some of the discussions here are quite relevant. We’ve been hearing a lot about scalability and how to measure our large impacts with all these massive numbers in the billions and millions of dollars. We’re talking about a small agricultural coop. I feel like in a rural context with limited population and limited growth capacity, we still are making huge impact. How do you qualify that and quantify that for investors and measure your success in a way that doesn’t take away from your key demographic that you’re serving?

Elena: Thanks for the question. I don’t personally like numbers. When people talk about scalabilities, scale impact, I’m personally very skeptical. We decided to be very flexible and not to make any statement in terms how big or what is the scale we expect our enterprises to reach and how many people we like to reach. What really matters to us is the business model that can be very disruptive in each sector and really change the life of the people. It doesn’t matter whether it’s ten or ten thousand people. But we are very aware that not many other investors think the same way we do.

Michael: I feel like I can repeat the first three or four words, of your comment which was, “I don’t really care about metrics either. I care about impact.” Unfortunately that’s in the nature of the sector and especially in a rural culture where they’re looking for, “What do you mean by impact?”

It can’t just be stories. It needs to be numbers as well. As advice for your organization, I’d really try to get down to what kind of numbers do people want from you? Who are your donors or who are the people that are coming to you and asking for them? And try to do it as efficient as possible.

Don’t go out there and create a whole plan and say, “Okay, we’re gonna do this much and this much. And then we measure this. We’re gonna do this. We’re gonna do this.” That’s great. But if you don’t need to do it, don’t do it.

Acumen right now is going through a process of rationalizing what they really need to measure. Then try and figure the best way they can measure that, integrating it into the organizations and integrate it into the kind of value-add that they’re offering to the organizations.

When I’m talking to our impact staff, that’s something that we constantly debate. It’s like, “is this actually value-add to the business?” Will we get more customers because of this? Will we get more investors because of this? Will we create more marketing campaigns because of this?

When your people are asking you for the metrics, ask them back, “Why do you want that metrics?” It might give you some more insights.

James:  I’d very much ask an investor what is it they want and work with each investor or stakeholder to give them the information they require.

I would keep it simple. I’m as simple as possible.

Question: I agree that relationships are a key factor in the success of the social enterprise. We see that in our rural area. On the other hand it’s a very fragile key of success. And my questions to all of you is how can we ensure that those relationships are viable and can survive despite the changes among the stakeholders or among the leaders who are in charge of the social business?

James:  I think relationships are utterly crucial in everything we do. I know there’s two parties in a relationship, but you take responsibility to make them as good as you possibly can.

What we do, we’ll have local government that will do things that really do my head in. And what we will do is we will have grown up conversations one to one with them and we will behave in a professional respectful way throughout that. We will fight as hard as we can to get what we believe is right for the people we serve.

We will make sure that we’re not just after something that we want. And if we don’t get what we want we will agree to differ and continue to work really constructively with them instead of being petty and taking offense.

I think those would be the key things. The other part is to ensure that what we’re doing with the key stakeholders fit in with their strategic objectives. And that’s almost that preventative part that if our strategic objective and theirs and we think that we are marrying the two of them, we’re doing what they want.

It’s easy so long as we behave in that courteous professional and competent way and deliver phenomenal outcomes, it’s really easy to keep the relationship together.

Michael: Because the relationships are probably gonna go over a long period of time and they’re gonna be not just, you know, for the first five years but for generations, I think as one party in the relationship I like to keep in mind the principle of charity.

Has anyone heard of the principle of charity before? No. It literally is in every action that you see the other party coming to you, you take it in the best quality. I’ve been on lots of planes I like to think about it as the person in front of you in a plane who’s taking forever, right? You just wanna get your seat, sit down, and I will fall asleep because it’s a long flight or maybe read a book. But in that instance just think that maybe that person is having to carry all their luggage from moving from one place to the other and that’s why it’s taking them long. Maybe they’ve had a hip replacement. There’s so much that could be going on in that person’s mind, in their life, and even in that organization’s mind, in that organization’s life that always approach when you feel like there’s a tough point in a way, you know, of empathy and love and just that principle of charity is what I like to kind of go back to.

Elena: In the many social enterprises and social entrepreneurs I met, the most successful ones were the ones who were able to spend a long time with their stakeholders, customers, and people. They’re the ones who had the ability to listen to the others and really to spend time with them.

Of course a relationship is also a very intangible asset. You need really to nurture it.

Question: Because these relationships are so determined of the success or a failure, like in my organization I’d say that as the executive director I’m having a lot of relationships with a lot of stakeholders. And the board of directors is a bit worried the day that I’m leaving, how do we transfer these relationships into a succession plan?

James: We maintain relationships by not everything being the EDO or CEO, it’s a team. You know, for example, while I’ve been here the most important government minister for social enterprise visited my work. I’ve invested in my leadership team on my board that they have relationships there as well, so it’s not all about me. I’m just a mouthpiece. Then the challenges can be security because it means you make yourself disposable, but I think we owe it to our organization and to the people we serve.

Elena: Once I met a really beautiful person who really inspired me a lot because they said that once you want to achieve something really very ambitious you don’t need to take credit yourself but it’s your organization. It’s very much what James said.

Really make your people believe that it’s their credit also. You are really a team. You really must institutionalize what you do.

Question: We’re about to embark on a three-year national project in remote communities across all Canada to basically give them the skills to increase their human and capital development. It’s a bottom up policy, not top down. It’s really giving communities the skills to address skills challenges on their own, with some assistance of course.

The similar challenge that many communities face is youth migrating and leaving communities. I was really interested to hear more about your graduate program and what you do to attract youth, to keep them.

James:  We work with our local enterprise development agency and they partly fund each placement,  summer placements are 50% or over 70%. We’ve built relationships with universities and with quite a wide network so we can get out to a lot of good people who are going to be graduating.

That’s how we attract them. Once we get someone in and we look to make every job really attractive and fun and sparky. If I look at a graduate placement rule and I don’t think, “I’d like to do that,” then we look at it again and get a place that we think, “Woo.” You know, it’s almost a delight to get to do so, so we want to make it a really exciting job.

We as a leadership team invest in each young person. As a chief executive I probably give a disproportionate amount of my time because I see the value not only to us but to the young person and the value I talked about in realizing potential. Even if they don’t stay with us, if they go and work somewhere else in their community, that investment is worthwhile.

It’s a heavy heavy investment, but the reward when we get beautiful, brilliant young people coming to work with us, coming and bringing a level of challenge, of a new learning that I’ve forgotten I never knew, it’s so worthwhile. But it’s not a cheap quick fix. It’s about really investing in them, valuing them, and stretching to give them a challenging job.

Question: I just wanna say thank you so much to the three of you. I have been to thousands of events and conferences on this topic of social impact and measurement versus investing etcetera etcetera in the intention. The three of you really articulated it beautifully. I just wish we could highlight you all over the world, how you’re as a primary focus really on the actual measurement.

You really care. I got from your conversation about who those people are on the ground. And our organization’s very similar. And when I get these questions from randoms who say, “What’s the return on my investment?” Well, our model is pay it forward because each donation gets recycled and so on and so forth.

I’m just really appreciative of what you said. And does it mean then that people who funded your organizations are looking for a financial return or are they like-minded and that they actually care about the outcome of those individuals?

Michael: Just let me put on my Acumen hat on for that one. Acumen is a 501(c)(3) in the US so as a result the majority of our donors are not looking for a return. But Acumen does focus on trying to give them the best experience possible to try to get them to donate again and be a continued partner.

But I would say that they also have a fund that is for capital markets and for credit investors. So, yes, they are looking for a return. But they’re going into that knowing that it’s tough work. It’s not success. We’re trying things out that really haven’t been tried before.

In terms of trying to be long term partners they’re pretty particular about the individuals that they’re working with. Doesn’t necessarily answer your question, but that’s Acumen’s standpoint.

James:  Most of our investors don’t invest in our training and life change. They invest in our income generation site so that then the investment gets from Scottish government, for example, supports us to generate more income to enable us to deliver these services. They’re not looking for a return specifically. We do have one grant funder that supports some of the training activity, but again, they’re not looking for a return.

Elena: Our supporters are not looking for financial return, but we do look for some financial floor. Having decided to target the early stages of social enterprises, we do believe that what the financial rewards would be in the range of a single digit.

It’s not the financial return that is leading our investment decision.

James:  What the Scottish government gets back from us, we work with people who may have a history of offending, a history of homelessness, a history of long term unemployment who are costing society a lot of money. What they get back is people’s lives change and some are going from being a drain in society to being a contributor to society. And that is one of the things that Scottish government, it’s one of the reasons they want to invest.

So yes, they get paid back by huge savings.

Question: My startup’s in a town of 55,000 people in Northern BC. I came here because key challenges such as distance, size, and market, lack of infrastructure and services, we got all that in Northern Canada. We still have people in dial-up and we don’t get cell service between major towns on a major highway.

It’s been great. We have a lot of businesses, like James, in my community that have really been giving me access to key decision makers to do my market research. We don’t have really a problem of youth migration. Actually youth are coming to us because the cities are unaffordable. But there’s not a lot of opportunity for them.

Now that we have a model that can work, we got a technology that everyone’s saying, “Wow. This is really good stuff.” They’re now convincing us to go to the city and move our operations down there because this market is bigger. The vision of what we created will greatly help the rural community, but to make the business model succeed they want us to go down and to rapidly deploy and maybe have that scalability, that impact, to go to the bigger places.

I’m struggling with this right now because half my team is in a big city, half my team is up where I am. I’m just trapped in this world and I don’t know what to do. What would you do if you were in my shoes? You’ve got a young company ready to go and change the world, we think it’s financial technology. I was with the greedy people too. Don’t worry, a lot of us are moving. The younger ones are.

Michael: First of all, I’m inspired by you. Inspired by just the way you were talking about your business  without getting into the details, just kind of the passion that you have for it and the passion that you have for rural communities and probably your moral compass which focuses you on that.

Number one, don’t lose that. But as soon as you said “some of your staff is going in the city and some of it is here”, I’m thinking of some of the work that we were doing in India. And it was “How can I get some revenue from one area of the business and still run other business that might be below break-even?”

Is it possible? Maybe not today, but over the longer term, to have some of it actually be in the city and scaling? Really your mission is to have the impact and have the greatest impact in those rural communities. And one of the things at Acumen, you know, is that we’re always investing in entrepreneurs. We take a board seat because we don’t want that entrepreneur to move away from their initial passion. It’s so tempting once you get a solar light that works, to just go sell it to anyone who wants it and to raise the price. But actually the reason you created that solar light was because people didn’t have access to power in rural communities.

So never forget your passion. And I think if that’s your kind of core belief then you’ll make the right decision.

Elena: You should go where you think you can make a really big difference. Thinking about a business model, I have no idea whether you have explored the possibility to do franchising and really leveraging on that specific business model.

James: What’s your mission? And that’s not for you to answer it to me, but to yourself. Where do you need to be to deliver your mission? I’d give an example of a friend’s company. You see that in itself, it’s a little company, it’s a billion pound turnover company.  They’re in an industry that would demand them to be in the oil capital of Scotland. This is a for-profit company. Their commitment is, yeah, they want to make loads of money, but they want to make a difference to the community they’re from.

They have their offices around the world, but they have said, “Our headquarters remain in the highlands because we believe in the highlands.” It really comes down to you, what you want, your vision, and how you think you can best realize that.

Ethel Côté: I’m inspired by the questions and answers and inspired by each other. Tell us the last thing we should remember when we leave the room, where we’ve been social enterprisers in the room.

James: I’m using some of my time for a silence cuz it’s precious. Some of the things that would strike me as important: relationships, stick to your mission statement of transforming your community. Stay true to that. Don’t create a business plan that’s gonna slaughter your community if you become big.

But bear in mind, yes, you want to be successful. Yes, you want to be the best. But you have a duty of care to your community. And be everything you can be. Do everything you can do. If you can do things to give yourself more energy, if you can do things to be sharper, if you can do things to be brighter, do it. And commit it all to transforming this world cuz you can do that.

Elena: I don’t know what you can bring home but I know what I can bring home from this session. I’ve been very inspired by my co-panelists and by you. And to think that in our work we should keep on being inspired and inspiring people.

Michael: I think leaving this room after the last hour and a half I’ve got a bit of a tingly feeling. I want that to continue and the reason why there is because there was so much sharing that went on, whether it was the questions and sharing some of the businesses that you’re working in and some of the ideas that you have, or it was the presentations of my fellow panelists, or the lovely introductions.

I challenge everyone to continue sharing. I challenge each one of you to talk to two people after this meeting, after this time, and over the next day and a half, and share your story. Share what you’re doing. Cuz I think that’s what these conferences are about. So that’s what I’m gonna take out, is that sharing is caring and sharing is key.

Ethel Côté:  Yes we are really building ourselves and we’re building our communities. And we’re not doing alone. Through your three presentations, I think that the key word, you didn’t mention it, but I think it was embedded in the energy you brought forward in this group, it’s the real sense of solidarity. Yes, caring, yes, sharing, yes, learning. But stay connected in the right way to do the right thing at the right time altogether. The world is very small. We can talk about globalization, but we can talk about global solidarity. Thank you very much and enjoy the forum.

More About SEWF

sewfThe Trico Charitable Foundation was honoured to host SEWF 2013. It made history in a number of ways – it was a first for Canada and attracted a record number of speakers and attendees (1,000 individuals from more than 30 countries and over 100 speakers from 20 countries) – but we are most proud of the quality of the discussions on Skills Building, Social Finance, Indigenous Social Enterprise, Collaboration, Policy and Research, and Social Innovation.

A special  thanks to Photos With Finesse by Suzan McEvoy for the pictures, BizBOXTV for producing the videos, and Employment and Social Development Canada for helping to make this post-event coverage possible.

We would also like to thank the following partners for making SEWF 2013 possible:

Organizing Partners:

Lead Sponsors:

Presenting Partners:

Supporting Partners:

Friends of SEWF:

Media Partners:

Each year SEWF gives a different host country an incredible opportunity to celebrate and nurture its own social enterprise movement. The inaugural SEWF met in Edinburgh, Scotland. Since then it has been to Melbourne, Australia; San Francisco, U.S.A; Johannesburg, Africa; and Rio de Janeiro, Brazil. Learn more about SEWF’s history here.

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