The Road Ahead for Social Enterprise
Te Puoho Katene (Ākina board), Shay Wright (Te Whare Hukahuka) and Louise Aitken (Ākina) with the Minister for the Community and Voluntary Sector Hon Priyanca Radhakrishnan and Matthew Luxon (CENT). A pohutukawa sapling from a Northland social enterprise was gifted to the Minister to represent the handing over of the recommendations to the Government.
With the wrap-up of the Government funded programme, The Impact Initiative, Ākina CEO Louise Aitken takes a look at what’s been achieved over three years, and what the programme recommendations could mean for social enterprise in Aotearoa.
We all want a country where people live in connected, resilient communities, with access to meaningful work. A country where doing business doesn’t come at a cost to the environment – and where more businesses actively work to make Aotearoa a healthier, happier and more inclusive place than it was before. What should our economy’s ultimate purpose be, if not to improve people’s lives and improve our environment?
New Zealand is facing some pretty complex challenges. A housing crisis, recovery from a pandemic, the climate emergency. Tackling these challenges will take many solutions, and not just from the government.
One powerful solution is through social enterprise – businesses that exist to make a positive difference in their communities and across the country.
The Impact Initiative programme was set up in 2017 to uncover the best ways for the Government to support the development of social enterprises, and to help create the conditions for social enterprises to thrive.
The official name of the programme is The Social Enterprise Sector Development Programme, but social enterprise is a term we hold lightly. The term refers to remarkable businesses that use trade to create positive social or environmental outcomes - or impact - but in reality they use lots of different terms to describe themselves.
They might call themselves community enterprises, or impact enterprises, or simply consider themselves businesses with a mission. They are Pacific enterprises and Māori enterprises or Pakihi Whai Kaupapa: business that follows purpose. They respond to genuine need, and they are often run by the communities they exist to serve. We talk about a social enterprise sector, but social enterprises are actually part of sectors across our economy – they’re in agriculture, hospitality, tourism, technology and innovation, health and waste.
There is no official definition for social enterprise in New Zealand – and where definitions have been used overseas they have been found to be too restrictive. What we’re really interested in, is the impact that is created. That’s what makes them stand apart.
It’s hard to quantify the exact number of social enterprises in New Zealand, but we know there are thousands, large and small. We know they are creating positive outcomes in areas that are also Government priority areas. We know that they are improving the physical health and nutrition for whānau like BBM in Manukau. They are improving mental health for young people like Your Corps in Dunedin or CoLiberate in Wellington.
They’re improving our environment through waste diversion and reuse like Mahurangi Wastebusters at Snells Beach and Wellsford, or All Heart NZ in Albany, Wellington and, soon, Christchurch. We know social enterprises are increasing community wellbeing by offering meaningful employment to people with disabilities like Will & Able in Papatoetoe or through jobs for people recently out of prison like Pathway in Christchurch.
We know social enterprises exemplify the best of kiwi business. We also know it’s not easy to run a social enterprise in New Zealand. Of course, it’s not easy to run any business, but The Impact Initiative has shown that the unique value of social enterprise means they face unique barriers to success. They face barriers to accessing support to start and grow, barriers to accessing capital to scale, and barriers to accessing market opportunities that drive their ability to create positive impact.
When your primary purpose is using enterprise to make a difference in the world, what company structure do you use? Where do you find advice, or funding, or investment that takes your unique purpose into account? When you describe your business as a social or impact enterprise to a bank, or to a lawyer or a potential shareholder, and you get a puzzled look in return – you know the hurdles between you and success are higher than they should be.
The Impact Initiative has uncovered some really powerful ways for the Government to make targeted changes that will not only benefit social and impact enterprises but will create flow-on effects that would benefit all New Zealanders.
Over the three years of the programme there has been countless hours of research, testing, delivering, reporting, connection and conversation. You can check out this summary of programme activity to get a sense of everything we’ve been up to, but here are a few highlights from the last three years;
The Fwd social procurement platform launched, and has now certified the impact of over 100 social enterprise suppliers. Fwd has brought together a buyer group of well known companies worth over $60bn in procurement spend, to encourage big corporates to buy positive outcomes through their supply chains.
The Impact Investment Readiness Grants Programme has been supported to give out over $500,000 worth of professional services to social enterprises which has resulted in millions of dollars total investment unlocked – twenty times the amount of funding – for innovative businesses like Grounded, LearnCoach, Zincovery and many others.
We’ve undertaken research into the history of the social enterprise sector, company structures, and our impact investment market.
We collaborated with 15 social enterprises working in Government priority areas, to develop impact models and tell the story of their impact, which is detailed in the landmark report The Business of Impact.
We’ve created 25 tools tailored to social enterprise and growing impact, to help those looking to start new enterprises or improve how their enterprise runs.
There have been case studies and kitchen table talks, and an Aotearoa social enterprise forum, alongside New Zealand representation at world forums in Scotland, Ethiopia and online. There has been an evolving round-table of engaged impact sector leaders, from Māori, Pacific and the community sectors, each advocating for their communities and shaping the outcomes of this programme.
With support from across the sector, and across government, we’ve worked to improve awareness and understanding, reduce barriers, and map the way ahead. Together, we’ve achieved a lot, but there’s still more to do. That’s why this month we’ve delivered fifteen connected recommendations to the Government in our final report for The Impact Initiative – A Roadmap for Impact.
The recommendations are bigger than social enterprise – they’re about impact; measuring and growing the impact Government can generate, as well as unlocking the impact of social enterprises. Some of the recommendations are focussed on the levers the Government can pull to generate wellbeing outcomes; levers like buying for impact through social procurement or impact investment. The other recommendations detail targeted action the Government can take to continue to improve the conditions for running a social enterprise in New Zealand.
So, let’s imagine those recommendations have been implemented. How would they continue to enable social enterprises to thrive?
For a start, if you’re wondering about the best way to set up a new social enterprise – there would be official guidance available on how to use existing company structures to deliver your impact.
As you set up and grow your business you could access additional relevant tools and resources that are focussed on measuring and managing your impact.
When you need advice along the way, there would be tailored and relevant support available from a local intermediary.
If you’re needing support to access investment a government-funded impact investment readiness programme would help you unlock the extra support you need to get ready to scale your business and grow your impact.
As your enterprise scales, the growing impact investment market is ready to meet you. That’s because government backed co-investment funds have helped accelerate the growth of the market, so there’s more available capital specifically for businesses that create wellbeing outcomes.
To ensure increased visibility of businesses that exist to create positive impact, there is a sector leadership group that will advocate on your behalf with decision makers, and share insights between government and the impact sector.
There would be some changes within government too, with hugely positive flow-on effects for impact businesses and their communities.
It would be clear that the government recognises the unique value of social enterprises, with a dedicated home for social enterprise within a key government agency, which would hold responsibility for consulting with the sector and progressing the recommendations.
Changing the way government procures goods and services will have led the way in making social procurement the norm, so that social enterprises have more opportunities to take on contracts that will boost their business and grow their impact.
Government’s capability to measure its own impact is increased – with established standards for how to measure and report on impact, which in turn would make it easier for social enterprises to demonstrate their unique value to government and shareholders.
Of course, the better question is, if these recommendations were implemented how would Aotearoa New Zealand be different?
Ultimately, social enterprises value what we all value. Governments of any colour can be a powerful force for positive change - especially given this Government’s commitment to improving the wellbeing of New Zealanders. The successes of social enterprises and of government are felt in communities across the country.
As Kiwis we’re welcoming, we’re practical, and we look out for each other. We’re proud of our beautiful country.
The social enterprise way of doing business is a very Kiwi way to do business. It’s inclusive and purposeful and generous. It looks to leave Aotearoa in a better place than when the work began. Implementing the recommendations would pave the way for an Aotearoa where creating positive social and environmental outcomes is just a normal and understood part of how we do business.
This is an Aotearoa where the Government collaborates with businesses and communities, and together they deliver a range of innovative solutions that result in healthier people, who are in meaningful work and part of productive and resilient communities in a regenerating natural environment.
Our challenge now is to take the next step. It’s up to the Government to take the programme recommendations from here. There’s lots of great work already underway, within government and in the wider sector that will help continue this journey – but what we really need now is a strong and public commitment to supporting New Zealand’s social and impact enterprises.
The Impact Initiative is laying down the challenge. These best of Kiwi businesses are ready to grow. Inequality, climate change and a country recovering from Covid-19 all demand bold action. With a flourishing social enterprise sector, and a government equipped to measure and grow impact, the Aotearoa we’re all working so hard to build could be closer than we think.