Kunal Bindra (1611255) Social Entrepreneurship-II Reflection Paper 4

Paper: Building long-term sustainable social enterprises

Social entrepreneurship has emerged as a way to bring about a transformative societal
change. Set up with the aim of uplifting the marginalized sections of the society, an ideal
social venture requires is a good mix of government intervention and strong business
acumen. Any social enterprise is usually targeted towards a specific set of people / issues,
economically or otherwise disadvantaged who cannot prosper without help, and aims to
bring about a permanent change in the prevailing societal equilibrium and/or their economic
condition. Some examples of social enterprise organizations (with their purpose) discussed in
this paper are Aravind Eye Hospital (making sight affordable), Centre for Collective
Development (helping farmers across value chain), AME Foundation (promoting farming best
practices), DHAN Foundation (institution building and leadership development), Amul (dairy
farming, Indias biggest success story), Ninjacart (eliminating middlemen and enabling farm to
store transfer of agricultural produce)
Now since the motive of any social enterprise is to bring about a permanent change,
preferably large scale or scalable, they need to achieve a good mix between matching social
objectives and financial objectives. Going overboard with meeting social objectives and not
concentrating on minimum financial returns (& hence sustainability) is a very common
problem. For instance, in the case of AME Foundation, the organization is now entirely
focussed on the information dissemination process through its LEISA publication which
practically has no scope of revenue generation now or in the future. As the organization
scaled down, the focus drifted away from possibly-return generating activities like training
partner NGOs on farmer field school or sustainable agriculture practices. Further the
intervention in value chain was restricted to pre-harvest best practice sharing and
implementation to an extent. Possible closure in form of produce marketing support (key in
ensuring self-sustenance for the farmers) wasn’t pursued. In contrast, in case of DHAN
Foundation, the enterprise focus throughout was that of an enabler and it did so by making
people pursue activities like brick production units, marketing of agricultural produce etc. by
gathering people into collectives. Most of these activities ensured self-sustenance for the
villagers.
For-profit or not-for-profit is irrelevant since the only thing that needs to be seen is who the
profits are accruing to. As long as the profits are going back to the targeted impactees, it is
better for sustainability.
Having discussed the overarching framework, the paper ahead reflects upon key
requirements to build upon a sustainable social enterprise:

 Empowerment: The key to building sustainability is self-sustenance and key to self-

sustenance is empowerment of the oppressed. Organizations should focus on
equipping people to make decisions and run a business. Dependency should be
gradually reduced. Creation of communities serves that purpose since a group of
people, once trained have higher bargaining power and better equipped (in terms of
diverse skills) to run a business. Kurien’s journey from Man to Manager to Leader
Kunal Bindra (1611255) Social Entrepreneurship-II Reflection Paper 4

which made Amul the biggest success story is an example of this. Charity  Service 
Empowerment approach taken by many organizations is an example of this.
 Low cost technology – The target should be to replace an existing technology (method
of doing things) with a lower-cost one. For instance, Ninjacart through its technology
of managing run-time logistics effectively significantly reduced the cost of transporting
agricultural produce from farm to store and passed benefit to farmers.
 Extent of intervention in Value Chain – The area and extent of intervention in value
chain should be a thought out at a strategic level before forming the mission
statement. The broader the intervention (covering more linkages in value chain) the
greater the benefit will be. For instance, the role played by Centre for Collective
Development in groundnut value chain at Anantpur, spans across facilitation, training,
financing and marketing of produce, with key focus on leadership training and
creation of cooperatives at village level. The intervention in marketing and finance
ensures complete value is derived for beneficiaries.
 Retention of workforce – Just as empowerment of communities is key, it is not
possible if the workforce of the social enterprise is not itself sustainable. DHAN
Foundations approach of hiring young people as explorers and then growing them to
learners and finally team leads (Explore  Learn  Lead) helps keep employees
motivated when pay is not that high.
 Members as owners – The members should feel like the owners of the organization
rather than employees and after an initial hand-hold period, much of the changes
should come through them. Producer type organizations work best in terms of
achieving this objective.
 Innovation – Disruptive technologies if successful are more often than not key in
building sustainable enterprises. These mostly need to come from the founder. For
instance, Aravind Eye Hospital pioneered a new low-cost technology (different from
what was in place) for cataract surgery which helped them impact masses at lowest
cost.
 Adopting sustainable financing models – Adopting the right financial model is key to
sustainability as explained above. Cross-subsidy model used by Aravind Eye could be
adopted. Further, social venture funds or corporate CSR programs could be targeted
for sourcing capital. The capital sourcing should be from someone aligned to the
philosophy of the social enterprise.
 Testing before institutionalizing – This philosophy, similar to Agile technique for
Project Management, focusses on doing small improvements, testing them for
success and learning from them before scaling it up big.
 Standardization through focus – Since the key to sustainability is lower cost of
production, the best response to this is through standardization i.e. reducing variety
and focussing on specific product/service. Ninjacart’s focus in its business model is to
limit the SKUs its dealing in and continuously reduce its operational cost through
completely automating the process. Aravind Eye too kept its focus very narrow to
making sight affordable.
Kunal Bindra (1611255) Social Entrepreneurship-II Reflection Paper 4

 Nation Building – this is going beyond the scope of immediate activities of the
organization and focussing on the larger scaling up issues. For instance, in case of
Amul, Kurien founded IRMA to create a pool for future leadership.
The strategies described above cannot obviously be treated as mutually exclusive. In fact the
more number of elements an enterprise is able to incorporate, the higher are its chances of
qualifying as a socially sustainable organization. To close, I would like to quote the following:
‘There are a lot of businesses that aren’t social and there are a lot of socials that aren’t
businesses’. The dearth is therefore of socially responsible businesses and the requirement is
hence of balancing social impact (socially responsible) and sustainability (business) at the same
time.

References
1. Case Study: Groundnut Value Chain at Anantapur: Growing through cooperatives
2. Remembering Verghese Kurien
3. Making sight affordable (mitpress.mit.edu/innovations)