Lin Yanqin, Today Online 1 Dec 07;
THEY'RE businesses with a social purpose, but good intentions, it seems, can only carry a social enterprise (SE) so far.
Without the knowhow and resources to run a business, some SEs — enterprises with a social aim of helping those in need — have found themselves struggling to deliver. Some might even ultimately be forced to shut down, to the loss of its beneficiaries.
That is why more needs to be done to boost a sector with a "generally poor entrepreneurial environment and a culture of letting the Government take the lead", said a report commissioned by the Ministry of Community Development, Youth and Sports (MCYS).
The report looks at the state of Singapore's fledging SE sector and offers a slew of recommendations for change — such as ways to match SEs with business expertise and available funds, and introducing school courses to teach business skills in a non-profit sector.
What poses a challenge now is perception, said the report. For instance, consumers sometimes regard SE products as inferior and expect them to be lower-priced, putting SEs at a pricing disadvantage, said the report. This makes it difficult for SEs to attract employees and customers.
Meanwhile, some organisations — private and non-profit — think of SEs as being "more like a charity" and "entitled to support and subsidies".
In contrast with countries like the United States that have a stronger SE sector, local SEs typically have their roots in non-profit groups rather than the private sector. With staff from social service rather than business backgrounds, the firms lack the management capabilities to keep going.
Financial instability is also an issue. While 42 of the 94 SEs surveyed for the report were profitable in the current financial year — 31 had earned income as a primary source of income — SEs also rely on donations. This puts them at the mercy of changing donor sentiments and limited fundraising capabilities, said the report.
It added: "Most social enterprises are not able to plan strategically but have a tendency to think short-term and fight fires as they arise."
And the SEs' small scale means they cannot afford IT or audit support services, for instance, and have to rely on staff with limited knowhow or volunteers who come and go.
As for support and seed-funding, the report noted that government efforts in Singapore focus mainly on social services for the needy. Those SEs championing causes like the arts, sports and health, on the other hand, get less support.
In addition, with no central repository where SEs can identify and assess what is available to them, they may have difficulty accessing the funds available from companies such as M1, DHL and Standard Chartered Bank.
While the report recommends measures to correct such shortfalls, some social entrepreneurs point out that the right strategy helps.
Said Mr Anderson Tan, who runs Fued Cafe, a cybercafe that reaches out to help youths at risk: "To survive, a social enterprise needs to fulfil its commercial objectives first, and keep its social objectives at the back of the mind without losing sight of it. Once you have achieved commercial viability, you can leverage on your social objectives because it becomes an edge over pure-profit businesses."
"There are lots of cybercafes but ours is the only one that really engages youths" and this differentiating factor keeps the cafe in business.
