In our previous article, we highlighted the need for “non-profit brands” to be renamed “cause-related brands” because they do actually need to make a “profit” in order to sustain investment in their cause.
With the business community becoming increasingly sensitised to the social and ecological cost of global business, a new animal which seeks to “do good and do well” has come to the fore – This is the Social Enterprise.
The social enterprise is the sexier cousin of the non-profit organisation. It is an enterprise that is focused on building the social or common good, through the mechanism of business. In some cases, the business model involves the hiring of the “beneficiaries” of the cause. In other instances, the end goal of the enterprise is social good and the business generates revenue for this cause.
In the latter instance, the differences between the social enterprise and the non-profit organisation becomes blurred.
However the key role of the brand in either instance is the same: Stakeholder engagement with the cause, financial sustainability through enterprise generating revenue; and donor engagement.
For a social enterprise, the business model will hopefully drive revenue, but the brand has to highlight the cause such that it is able to overcome the indifference in the marketplace.
Most social enterprises think that just by having a worthy cause, donors and customers will come. However, the reality is that the real challenge for social enterprises is to overcome consumer indifference to the issues – by answering these questions:
“How does this affect me and why should I bother?”
“Why should I spend time and money on this?”
FOR COMPETITIVE ADVANTAGE
As more and more social enterprises are formed in the marketplace, there will be increased competition for the “social dollar” and consumer share of wallet. And whilst consumers may be more aware of social issues today, it does not necessarily translate into their willingness to spend on social enterprises.
The social enterprise brand has to be as experiential and as robust as the best commercial brands, if it is to compete for the consumer’s share of wallet.
Additionally, if the social enterprise is to have any competitive advantage, it has to start with having the best and right people running it. It thus also has to compete in talent acquisition and retention, if it is to be financially sustainable.
The brand then acts as the filter which attracts and sifts out the people who fit best and are most capable for the job; and those that don’t fit the bill.
AS AN ORGANISING PRINCIPLE
Having the brand act as an “organising principle” within a social enterprise, is not just good in bringing focus to business and marketing decisions, it also helps in building a strong enterprise culture, and sharpening its outreach messaging.
Just as the brand is most effective in commercial organisations when it acts as an organising principle, so too is this true for social enterprises. The need to “sell the dream or vision” is never greater nor more pressing for these companies, and investment in the brand to secure revenue and customer loyalty becomes imperative.
FINANCIAL SUSTAINABILITY
So why then do social enterprises continue to rely on fund-raising and volunteerism for financial sustainability? Why are they not looking for better alternatives including more robust business models, attracting the best talent, and investment in better branding?
I ask these questions because sustainability for social enterprises is not just about fund raising – it is also about on-going revenue generation.
As Atul Tandon, previously the Senior Vice-President of Donor Engagement at World Vision says: “So long you keep looking at the donor as simply a cash machine, which is what the word fundraiser denotes to me, you are going to run into all the problems …. And there’s only incremental advance that can be made to improving techniques.”
The first step for the social enterprise therefore is to start with a brand development process which would bring in the initial revenue streams and enable them to pilot the business model.
It is for this reason that we have recently formed the Activiste Impact! to influence positive change for the brands that need it most – cause-related brands are branded activists who desire to make an impact in their chosen fields.
Some social enterprises are unaware of the influence branding can have; whilst others realise its potential but have insufficient means to make the transformation. Contact kim@activistebrands.com if you’re interested in finding out more about this.
