Institute for Social Entrepreneurship in Asia

Marie Lisa Dacanay President, Institute for Social Entrepreneurship in Asia Philippine Social Enterprise Forum Asian Development Bank, February 28, 2012

Disclaimer: The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their use. Terminology used may not necessarily be consistent with ADB official terms.

Poverty remains to be one, if not the gravest social problem of the 21st century. We need to focus on nurturing a vibrant social enterprise sector as an effective force in poverty reduction and sustainable development.

Nurturing Social Enterprises for Poverty Reduction

SEs as Vehicles for Poverty Reduction
◦ Key insights from PhD dissertation & earlier research on SE & the Poor  Social Enterprises with the Poor as Primary Stakeholders (SEPPS)

Agenda for Nurturing SE for Poverty Reduction
◦ Developed thru an ISEA Action Research supported by Oikocredit and FSSI ◦ Validated and adopted by 50+ participants from SEs, SE networks and SE resource institutions  Coalition for Poverty Reduction through Social Entrepreneurship (PRESENT Coalition, Feb 2012)

Social Enterprises as Vehicles for Poverty Reduction
Concept of SEPPS Different Ways that SEPPS Engage the Poor Developing SEPPS in Strategic Economic Subsectors  A Broader Agenda for Change as Key Success Factor for SEPPS

‘Poverty as deprivation of basic capabilities’ (Sen,1999; 2009) not just low income
Sharpen Concept of SE  focus on type of SE evolving as major player in poverty reduction  Social Enterprises with the Poor as Primary Stakeholders (SEPPS)

Social Enterprises with the Poor as Primary Stakeholders (SEPPS)
wealth creating organizations engaged in production of goods and services; varied asset size and legal forms principal objective: poverty reduction/alleviation; financial sustainability as supportive objective directly engage poor as workers, clients, suppliers; some collectively owned by poor

Social Enterprises with the Poor as Primary Stakeholders (SEPPS)
responses to failure of market and state institutions to serve the needs of the poor provide the poor a combination of transactional and transformational services positively contribute to creation of economic and social value, much of which is not recognized by mainstream market economy use a combination of principles as actors in economic development: market , redistribution, reciprocity

Orientation towards poor

Poor as passive beneficiary

Poor as transactional partner Pro-active workers, suppliers, clients Partners in social enterprise and value chain management

Poor as transformational partner Empowered workers, suppliers , clients ,owners Organized partners in poverty reduction community, sector, societal change Significant outcomes in overcoming capability deprivation & income poverty

Nature of roles and capabilities developed among poor

Passive workers, suppliers or clients

Impact on poor

Limited to negative

Increased incomes, access to services  social inclusion

Developing SEPPS in Strategic Economic Subsectors

Single social enterprise interventions  limited in terms of impact and sustainability Importance of interventions at the level of economic subsectors  network of related actors and enterprises performing various functions in competing value chains; may be identified by major raw material source, finished product or final service provided

Developing SEPPS in Strategic Economic Subsectors

Strategic Economic Subsectors
◦ have a potential for growth ◦ large numbers of the poor are players or could become players

Examples of strategic economic subsectors where SEPPS are already playing key roles:
coco coir, muscovado sugar, organic rice, essential oils, bamboo, educational toys , school chairs, brewed coffee

◦ SEPPS are responses to state and market failures in providing for the needs of the poor  to succeed, SEPPS need to have a clear agenda for change specially vis a vis mainstream markets and state institutions ( e.g. fair trade principles
when corporations buy raw materials; special provision in GAA for government to procure from PWD cooperatives)

Agenda for Nurturing SE for Poverty Reduction
Magna Carta for SEs Elements of a National Poverty Reduction thru Social Entrepreneurship Program

Agenda for Nurturing SE for Poverty Reduction: Magna Carta for SEs (PRESENT Coalition)

Major role for government in providing a policy environment to nurture SEPPS as major partner in poverty reduction
◦ Magna Carta for SEs: support and incentives for SEPPS and social investors  SE as legal brand to recognize economic & social value they contribute as major partners in poverty reduction
 financial and program support  preferential rights in government procurement  tax exemptions/incentives

Agenda for Nurturing SE for Poverty Reduction: Elements of a National PRESENT Program
◦ Development of strategic economic subsectors ◦ National SE Development Support Program convergence of initiatives to ensure poor (thru SEPPS) benefit the most from subsector growth and development ◦ Strategic HRD  integration of SE content & courses in schools at all levels

Agenda for Nurturing SE for Poverty Reduction: Elements of a National PRESENT Program

National SE Development Support Program: Key Elements
• Capacity Building & Sustainability Program  supported by SE Development Fund  R&D  capacity building, subsector dev’t, appropriate
technology, innovations in delivery of social services

 Market Development for SE Products and Services  Credit Fund & Guarantee Fund Pool  SE credit
windows in all banks, financing of performance bonds

 Standards Development, Accreditation and M&E System (quasi government)

Concluding Remarks: Nurturing SEs for Poverty Reduction

To scale up impact on poor, SEs, support institutions and impact investors
◦ need to make provisions for engaging the poor as transactional and transformational partners ◦ need to go beyond single SE interventions and plan strategically at the level of economic subsectors ◦ need to work together for a broader agenda for change

Convergence of initiatives with government playing strategic role in developing vibrant SE sector
◦ Magna Carta for SEs ◦ Poverty Reduction through Social Entrepreneurship Program (PRESENT)

THANK YOU!
www.isea-group.net ldacanay@isea-group.net

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