Defining Social Enterprise by BCYF

Š Benita & Catalino Yap Foundation 2017 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher.

Published by SACT Press For the Benita & Catalino Yap Foundation Mabalacat City, Pampanga Philippines 2010

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TABLE OF CONTENTS

Definition

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Notes

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Participants

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Works Cited

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What is Social Enterprise?

A Social Enterprise is an organization that is engaged in business to help society.

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This definition has 5 parts: 6

(1) A social enterprise has a business case.

No matter what the social objective is, it is not a social 7 enterprise if it does not have a viable business model.

When it does have a business case, the social objective is integrated in the cost of doing business does not 7 have a viable business model. When it does have a business case, the social objective is integrated in the cost of doing business.

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(2) A social enterprise complies with government regulations.

As a good corporate citizen, social enterprises are in good compliance of the regulations and policies which it is mandated to operate within.

(3) They identify a social objective either before or during the course of their business.9 In the latter case, they need to transform their business to integrate their social objective in the cost of doing business.

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(4) They pursue a social objective beyond what is required of them and they employ measurability practices to track their progress in addressing the social problem.

In addressing the social objective, social enterprises do not simply implement band-aid solutions. They design their enterprise such that the social impact will significantly address, and if possible, eliminate the problem at hand. In order to do this, they are able to measure and track progress of both financial and social impact.

(5) CSR principles are applied In a social enterprise, CSR principles are assumed— good corporate citizenship, sustainable practice and operations, and a culture of social responsibility in the organization and the entire value chain.

Social Enterprises are committed to enhance human value for everyone (from the founders, board, manage10 ment and staff) in the organization.

Social enterprises do not just address social objectives, they also build an internal culture where their own people’s value and dignity are enhanced by the work that they do and are not just involved in the planning and implementation of CSR –based projects.

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Notes 1. This definition was adopted by the Benita & Catalino Yap Foundation (CDY Foundation Inc.) in February 2015.

2. With the use of the word “enterprise”, this implies that social enterprises should also be measured against their contribution to the market economy (Dana, 2011). In this frame, social enterprises will still need to be assessed under business and commercial standards such as regulatory compliance, good governance, income tax contribution, etc (Defourny & Nyssens, 2012). On the other hand, with the use of the word “social”, social enterprises should also be assessed with the perspective of social development— how have social / environmental conditions improved because of the social enterprise’s operation (Dees J. G., 2001)This leads to an insight that the social objective of a social enterprise must be integrated in its business and commercial operation – not as an after-profit endeavor, but rather as part of its cost of business (Tokarski, Ernst, & Volkmann, 2012) 3. In October 30, 2014, a Roundtable discussion was conducted by the Benita & Catalino Yap Foundation at the Ateneo Graduate School of Business, Rockwell Center, Makati City, that gathered key social enterprise organizations in the Philippines. BCYF is mindful that there are various kinds of organizations that thought leaders in social entrepreneurship classify as social enterprises (Drayton, 2006). These include cooperatives, fair-trade organizations, non-profits, CSR initiatives of companies, social business, poverty-oriented organizations, etc (Yunus, 2007). But for the purpose of this definition, BCYF focuses on enterprises operating as businesses (Benita and Catalino Yap Foundation, 2014)

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4. With the use of the word “enterprise”, this implies that social enterprises should also be measured against their contribution to the market economy (Dana, 2011). In this frame, social enterprises will still need to be assessed under business and commercial standards such as regulatory compliance, good governance, income tax contribution, etc (Defourny & Nyssens, 2012). On the other hand, with the use of the word “social”, social enterprises should also be assessed with the perspective of social development—how have social / environmental conditions improved because of the social enterprise’s operation (Dees J. G., 2001)? This leads to an insight that the social objective of a social enterprise must be integrated in its business and commercial operation – not as an after-profit endeavor, but rather as part of its cost of business (Tokarski, Ernst, & Volkmann, 2012).

5. The assumptions upon which an enterprise is built and operated on must be relevant to reality. This is the essence of a business case. According to Peter Drucker's Theory of Business, the assumptions on environment, mission and core competencies must fit reality. They must also be compatible with each other. The assumptions must be known and understood throughout the organization - where they develop the discipline to operate based on the theory. the theory of business must also be tested constantly (Drucker, Theory of Business, 1994).

6. Business Models can be traced upon the concept of ecosystem—a system of interconnected and interdependent activities that determines the way the company “does business” with its customers, partners and vendors (Zott, Amit, & Massa, 2010).

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7. As organizations operating through business, social enterprises are expected to actualize the principles of corporate social responsibility (CSR 1.0), corporate sustainability and responsibility or transformative CSR (CSR 2.0), anchored on ethical conduct, charity and philanthropy (Visser, 2011).

8. The decision to become a social enterprise happens over time. During the second BCYF social enterprise roundtable discussion, cases were shared where organizations who started out as traditional foundations, or corporations, gradually realized the need to be more sustainable through enterprising means, and be more effective in delivering social impact (Benita and Catalino Yap Foundation, 2015).

9. Social entrepreneurs should be able to apply the discipline of business to ensure that their social solutions can be replicated and scaled (Elkington & Hartigan, 2008).

10. In the third Social Enterprise Roundtable of BCYF, it was emphasized that the following are primary components to a social enterprise: 1. It improves the lives of people in the value chain 2. It has a business case 3. It has a measurable social objective 4. It has a commitment to compliance and measurability (Benita and Catalino Yap Foundation, 2015).

11. For BCYF, individuals working in social enterprises (from founders, board, management, to staff) must personally imbibe the values that the organization stands for. The culture of the social enterprise must also be such that the human dignity of each individual working in it is enhanced.

Thus social enterprises are expected to commit to the principle of CSR 3.0 or Personal Social Responsibility (Benita & Catalino Yap Foundation, 2015).

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ROUNDTABLE CONFERENCES ON DEFINING SOCIAL ENTERPRISE

Participating Organizations: Small Enterprise Research Development Foundation | Foundation for Sustainable Society Inc. | Ashoka Philippines | LGT Venture Philanthropy | Go Negosyo | Philippine Social Enterprise Network | Central Colleges of the Philippines | Pushpin Movement | ASEAN Entrepreneur Foundation | Jeepneed | SEDPI Development Finance Corporation | DTI Bureau of Micro, Small, Medium Enterprise Development | Watson Institute Philippines | APEC Schools of Ayala | Global Shapers Philippines | BPI Foundation | IDEASpace Foundation | PUP San Juan | Cooperative Development Authority | Coffee for Peace | Office of Senator Bam Aquino | British Council Philippines | University of Melbourne | Pamantasang Lungsod ng Maynila | Small Business Corporation | PwC Philippines | Virlanie Foundation | Gawad Kalinga Enchanted Farm

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Works Cited Alter, K. (2007). Social Enterprise Typology. Virtue Ventures LLC. Benita & Catalino Yap Foundation. (2014). The BCYF Social Development Model. Pasig City: Benita & Catalino Yap Foundation.

Benita & Catalino Yap Foundation. (2015). Introduction to CSR 3.0.

Mabalacat: SACT Press.

Benita and Catalino Yap Foundation. (2014). Defining Social Enterprise Part 1. IPS Social Enterprise Roundtables. Mabalacat: SACT Press.

Benita and Catalino Yap Foundation. (2015). Defining Social Enterprise Part 2. IPS Social Enterprise Roundtables. Mabalacat: SACT Press.

Benita and Catalino Yap Foundation. (2015). Defining Social Enterprise Part 3. IPS Social Enterprise Roundtables. Mabalacat: SACT Press.

Bornstein, D. (2007). How to Change the World:Social Entrepreneurs and the Power of New Ideas. USA: Oxford University Press.

Dacanay, D. M. (2012). Getting a Handle on Social Entrepreneurship.

Makati: Institute for Social Entrepreneurship in Asia.

Dana, L.-P. (. (2011). Defining Entrepreneurship. In World Encyclopedia of Entrepreneurship (p. 45). UK: Edward Elgar Publishing Inc. Dees, J. E. (New York). Enterprising nonprofits: A toolkit for social entrepreneurs. 2001: Wiley and Sons Inc. Dees, J. G. (2001). The Meaning of Social Entrepreneurship. Kansas: Kauffman Foundation.

Defourny, J., & Nyssens, M. (2012). The EMES approach to Social Enterprise in a Comparative Perspective. Belgium: EMES. Drayton, B. (2006). Everyone a Changemaker. Innovations Journal MIT Press.

Drucker, P. (1985). Innovation and Entrepreneurship. New York: Harper Row. Drucker, P. (1994, September). Theory of Business. Retrieved March 3, 2015, from Harvard Business Review: https:// hbr.org/1994/09/the-theory-of-the-business Elkington, J., & Hartigan, P. (2008). The Power of Unreasonable People: How Social Entrepreneurs Create Markets that Change the World. Massachusetts: Harvard Business School.

European Venture Philanthropy Association. (2015). EVPA. Retrieved from EVPA: http://evpa.eu.com/

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Grossman, A., Appleby, S., & Reimers, C. (2013). Venture Philanthropy: Its Evolution and Its Future. Boston: Harvard Business School.

Huybrechts, B., & Defourny, J. (2008). Are fair trade organisations necessarily social enterprises? Social Enterprise Journal, 186-201.

International Cooperative Alliance. (2015). ICA. Retrieved 2015, from ICA: http://ica.coop/ Jayasooria, D. (2011). Developments in the Solidarity Economy in Asia.

Malaysia: JJ Resources.

Ledgerwood, J. (2013). The New Microfinance Handbook: A Financial Market System Perspective. Washington DC: World Bank.

Lee, M., & Batillana, J. (2013). How the Zebra Got Its Stripes: Imprinting of Individuals and Hybrid Social Ventures. Boston: Harvard Business Review.

Martin, R. L., & Osberg, S. (2007). Social Entrepreneurship: The Case for Definition. Stanford Social Innovation Review.

Porter, M. E., & Kramer, M. R. (2011). Creating Shared Value. Harvard Business Review.

Prahalad, C. K. (2009). Fortune at the Bottom of the Pyramid:Eradicating Poverty through Profits. New Jersey: Pearson Education Inc. .

Tokarski, K. O., Ernst, K., & Volkmann, C. K. (2012). Social Entrepreneurship and Social Business: An Introduction and Discussion with Case Studies. Fachmedien Wiesbaden: Springer Gabler.

Visser, W. (2011). Age of Responsibility: CSR 2.0 and the New DNA of Business. London: Wiley.

Volkmann, C. K., Tokarski, K. O., & Ernst, K. (2012). Social Entrepreneurship and Social Business. Heidelberg: Springer Gabler.

Wexler, R. (2009). Effective Social Enterprise - A Menu of Legal Structures. San Francisco: Tax Analysts.

Yunus, M. (2007). Creating a World Without Poverty: Social Business and the Future of Capitalism. Philadelphia: PublicAffairs.

Zott, C., Amit, R., & Massa, L. (2010). The Business Model: Theoretical Roots, Recent Developments and Future Research. Madrid: IESE Business School.

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The Benita & Catalino Yap Foundation , established in 1993 has a Vision to help the Philippines develop on a manner which respects the individual’s dignity and contribution by coming up wit innovative social solutions.

Our mission is to contribute to the development of the country by focusing on the youth and their dreams, which can be achieved through CSR 3.0-based Social Entrepreneurship.

The Institute for Social Enterprise & Development is the BCYF department that implements the Social Enterprise Program to identify, assist, train, convert and develop social entrepreneurs.

www.bcyfoundation.org

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