Governments and social impact
In an interview with the director of training, development cooperation and advocacy of the Philippines Social Enterprise Network’s (PhilSEN), Gomer Padong shares how governments have and can support more social enterprise developments.
Every business has an impact on society, be it negative or positive. Social enterprises are emerging to ensure positive social impact does happen by addressing specific social problems. However, despite the awareness of the need for such social initiatives, social enterprises still exist in isolated pockets. To encourage their development and network growth, governments are aiming to partner with them towards a more inclusive economic system.
Gomer Padong, a social enterprise advocate from the Philippines believes in the need to mainstream social enterprises towards reducing poverty, resilience and sustainability. From his experience in representing and leading social enterprise development networks, platforms and initiatives, Gomer finds that more people are becoming conscious about social problems and are taking active roles on how to address them.
It has been reported that most social enterprises in the Philippines operated in the sectors of agriculture, education and business development, and financial services and employment creation. These sectors are usually tied to missions of social enterprises whose objectives include generating employment, alleviating poverty, improving the local community and empowering marginalised groups.
‘Social enterprises are necessary in a way that when supported and scaled up, the impact also scales up and can become game-changers in sustainable development and local community building,’ Gomer says. ‘Social enterprises not only look at profits but focus on the social and environmental bottom-lines. The principles of doing good, doing well and doing right separates them from traditional businesses.’
Gomer, who’s also the director of training, development cooperation and advocacy at the Philippines Social Enterprise Network (PhilSEN), shares his thoughts on how governments can lead this positive impact on the economy.
How can governments encourage social enterprise developments?
By providing an enabling environment for social enterprises to flourish, governments have to play a developmental role in this process. In the Philippines, we are asking the government to:
a. Institutionalise the national poverty reduction through social entrepreneurship which can be a flagship programme to progressively improve the position of a significant number of poor and marginalised. This can also promote sustainable programmes that develop inclusive value chains in economic subsectors where the poor and marginalised are concentrated.
b. Provide priority support and incentives for social enterprises such as accessible non-collateralised loans guaranteed by a pool of funds and comprehensive insurance system to reduce vulnerability to natural hazards and calamities. This includes provision of resources for comprehensive capacity development, proactive market development programmes that promote principles of fair trade. This also includes research and development programmes involving economic subsectors, mainstreaming of social entrepreneurship in the education system, preferential treatment in government procurement of funds such as coverage of their performance bonds and cash incentives equivalent to at least 25 per cent of the minimum wage for social enterprises employing persons with disabilities.
What are examples of government strategies and policies that have helped develop social enterprises?
We can see some of the best practices of strategies and policies in South Korea, they are far more advanced in this arena. Vietnam and Thailand have advanced in this field too.
In Vietnam, social and developmental problems have paved the way for local social enterprises to garner support. In 2014, Vietnam amended its Enterprise Law to provide a legal definition to social enterprises with the promise of encouraging, developing and supporting these organisations. According to legislation, social enterprises are eligible for certification and special financial support.
In the case of Thailand, it initiated a five-year social enterprise master plan in 2010 and pioneered the social enterprise policy in the ASEAN region. In 2009, its government expressed support for social enterprise development by creating a National Social Enterprise Board through the Prime Minister’s decree on social enterprise promotion. In 2010, they set up the Thai Social Enterprise Office with a USD3.5 million budget and a corresponding five-year national social enterprise promotion plan. They launched a USD1.2 million social enterprise fund in 2012 and initiated a social enterprise promotion act and released a THB60 million social enterprise loan programme, in 2015.
Thailand’s cabinet also approved the Social Enterprise Taxation Royal Decree, which would further intensify their social enterprise development efforts. The new decree calls for a social enterprise governing body, a social enterprise support fund and a social enterprise legal form and certification process.
Additional measures to support the decree include promoting social entrepreneurship in the education system through tuition fee waivers and scholarships, a social innovation research funding programme, a social enterprise startup grant and loan programme, a sustainable procurement system for public and private organisations and tax incentives for social enterprises and social investors.
Half-way into Thailand’s five-year plan in 2012, there were an estimated 116,000 social enterprises in the early stage of development. There was also an increase in private sector-led social enterprises as a separate entity.
What are some successful social enterprise and government partnerships?
One that I can think of is the case of the national cooperative of persons with disabilities and how they were able to participate in the procurement of school chairs and educational toys for the Ministry of Education in the Philippines. Through this partnership, members and cooperatives of persons with disabilities were empowered by the provision of capacity building and economic empowerment because they were already earning money and not seen as unproductive.
How can social enterprises maintain their social mission?
While social enterprises primarily have that social mission, some, if not most, go on what I call mission-drifts. This is really a challenge since even traditional businesses are quite challenged by keeping up with their finances, imagine how much more challenging it would be if you are managing triple or multiple bottom-lines that include social and environmental challenges.
One way to help is for a sector or organisation to develop benchmarks to measure this. In 2010, the Philippine Social Enterprise Network developed a tool called Social Enterprise Quality Index. It’s a self-rated assessment guide for members to use on a periodic basis to measure their activity in relation to the triple bottom-lines. The results are reference points during their monitoring and will effectively inform their planning processes.
How do you train people in social enterprise development and advocacy?
First, to know the issues surrounding social enterprise development and build narratives around those cases to support the advocacy work. It will be best to know grassroots stories and communicate them effectively to multiple audiences.
Second, to build champions in politics and people in government. Make them understand what social enterprises are and how they can help in multiple avenues. If you can have them visit social enterprises and interact with practitioners, it will really help them to understand.
Third, to network with like-minded people and organisations, and in the social enterprise community as well as advocacy spaces. The sharing of experiences and strategies on how to carry out campaigns and advocacy points is beneficial.
Lastly, connect with other advocacies like sectoral advocacies of civil society and non-government organisations, farmers, fisherfolk, migrants, persons with disabilities, women, children, youth, indigenous peoples and others. It’s only through cross-fertilisation of the different advocacy areas and points can we achieve the scale and impact that we want in this field.
Social enterprise is an ingredient for inclusive growth, in that it reduces poverty. For Gomer, social enterprises are successful if their primary stakeholders, who are the reasons for the social enterprises to exist, are empowered and moved out of poverty, living a dignified life and contributing positively to society. Advocates of social enterprise are one of the vital living tools of inclusive growth and a resilient future.