Sustainability
Download
1 / 17

Sustainability - PowerPoint PPT Presentation


  • 80 Views
  • Uploaded on

Sustainability. Part Five. Social Impact. Financial Viability. Double Bottom Line. Social Enterprises must balance their social and financial objectives. SE Earned Income Strategies. Fee-for-Service

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Sustainability' - bevis


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Sustainability

Sustainability

Part Five


Double bottom line

Social

Impact

Financial

Viability

Double Bottom Line

Social Enterprises must balance their social and financial objectives


Se earned income strategies
SE Earned Income Strategies

  • Fee-for-Service

    • Fees that paid directly by clients and beneficiaries such as tuition, housing, clinical services, interest on loans (microcredit).

    • Fees may also come from a third party who is paying for services for the client or beneficiary. The third party may include: a donor, public welfare from the state, or nonprofit insurance fund

  • Sales

    • social enterprises may sell products, for example handicrafts made by clients or fresh fruit grown by small holder farmers. Services rendered by clients such as janitorial or landscaping done by mentally disabled people.



Revenue model
Revenue model

  • What is the revenue model of your SE?

  • What is the social purpose of your enterprise?

    • What type of impact are you trying to achieve?

    • Who benefits and how?

  • What products or services are you selling?

    • Who are your customers?

  • How is your social enterprise positioned in the market and community?

  • Diagram your SE revenue model



Se financial management problems
SE Financial Management Problems

  • Low financial management acumen

  • Driven by donors (fund accounting)

  • Misallocation of expenses

  • Hidden assets / hidden subsidies

  • Do not give an accurate picture of financial performance

    • Overstates financial performance

    • Understates financial performance

  • Can drive managers to make the wrong decisions

    • Growth

    • Capital needs and requirements

    • Investment/divestment


Subsidies
Subsidies

  • Volunteer time

  • In-kind

    • Infrastructure, professional fees, products

  • Low performance (to industry standard)

  • Social program costs

  • Staff time spent on enterprise and allocated to other budgets

  • Overhead and back office

  • Embedded social costs

  • Grants – reflected in subsidize prices

  • R&D


True cost accounting

SKOLL CENTRE FOR SOCIAL ENTREPRENEURSHIP

“True” Cost Accounting

Quantifying Social Costs

Quantifying subsidies


Financial projections

SKOLL CENTRE FOR SOCIAL ENTREPRENEURSHIP

Financial Projections

$$$

Social Enterprise

BreakevenPoint

Private Business

Breakeven Point

Years

SE Revenue

SE Expense

Business Expense

Business revenue



Sustainability

  • A closer look:

  • socio-economic costs are social program costs covered by running a social enterprise; objective is NOT to make profit but cover more social costs through biz activities

  • Share expenses enable parent organization to leverage assets and have unrestricted income

  • Business expenses pure business cost, but also underwrite social objectives—i.e. wages to client workers

  • Social costs can be allocated separately and subsidized with grant funding.


Results
Results

  • Share costs converts restricted income into unrestricted income regardless of revenue

  • Sustainable program strategy

  • Shifts financial paradigm from 100% deficit to revenue generation/declining deficit

  • Marketing/grant raising vehicle for supplementary social costs

  • Increases financial rigor and business acumen

  • Leverages social programs and assets (trained clients)


External
External

Profit used to fund social program activities and/or parent organization

Breakeven Point

Time


Sustainability

Grants

Social Venture Capital Funds

PRI / Recoverable Grants

Forgivable Loans

More equity-like

Implications for Financial Management

Below-Market Debt

Venture Capital

Market-Rate Debt

SRI Funds

More debt-like

Exit

Develop idea & model

Early Growth

Proof of concept

Scale

Start-up, capacity building

Replication


Social investment choices

SKOLL CENTRE FOR SOCIAL ENTREPRENEURSHIP

Social Investment Choices

Client Productivity

Return on Investment?

$$$

$

Credit/Insurance Literacy Heath Housing

A Job Hard Skills Soft Skills