Social Enterprise: A Global Comparison

6: Zimbabwe and Zambia

absolom masendeke & alex mugova Zimbabwe and Zambia 6the concept of social enterprise Nongovernmental organizations (ngos) have become universally recognized in African societies as key development actors. For ngos, social enterprise is a core strategy for social and economic development , and this is often evident in their mission statements. Some ngos work in partnership with government, the private sector, and other donors in order to realize their social enterprise objectives. ngos also act as intermediaries in delivering microfinance packages targeted to the poor, mainly because of their experience working with communities. When working in this capacity, ngos are known as social enterprises. Recently, ngos operating in some countries in southern Africa, especially Zimbabwe , have experienced serious funding challenges that make it di≈cult for them to sustain their activities. As a result of this resource squeeze, there is now a trend toward cost recovery and commercialization of some services in local and international ngos, and these activities make them social enterprises. Returns from commercialized services are used to support and expand activities of the organization. The quest for organizational viability and sustainability has been one of the prime motivations behind this phenomenon. Examples of social enterprises in southern Africa are varied. They include: ≤ Enterprises set up by ngos to generate income meant to sustain their activities ≤ Organizations set up to provide goods and services to the poor on a commercial basis ≤ Cooperatives set up by members to pool resources and skills and to provide goods and services for sale masendeke and mugova, Zimbabwe and Zambia 115 ≤ Associations set up by members to facilitate working together and speaking with a collective voice and to facilitate access to inputs and services that enhance the viability of the members’ businesses Individual perspectives on social enterprises are varied. Some view social enterprises as self-empowerment mechanisms. Some look at social enterprises as a coping strategy for enhancing economic survival at the individual and household levels. For some, especially those in societies molded around cooperative approaches/models of development, social enterprises refer to collective enterprises. This view of social enterprises often leads to cooperative and group-based initiatives for the attainment of social and economic objectives. Some people define social enterprises as social gifts. These people normally adopt attitudes that undermine their ability to benefit from social enterprises. Viability and long-term sustainability are keys to the success of individually run social enterprises. Social enterprises in Africa exhibit seven key features, but not every social enterprise has all these characteristics. They are: ≤ Delivery of goods and services to the public for a fee ≤ Viability and sustainability considerations ≤ Financial sponsorship ≤ Community empowerment ≤ Partnerships ≤ Social accountability ≤ Social and economic value creation These common characteristics provide a good basis for conceptualizing the social enterprise phenomenon in Africa. While many definitions of social enterprises have been brought forward, the one by Kim Alter (2007) best applies to the African context: A social enterprise is any nonprofitowned revenue-generating venture created for the purpose of contributing to a social cause while operating with the discipline, innovation, and determination of a for-profit business. Care needs to be taken to avoid confusing social enterprises with public social services and utilities. The key distinction is that social enterprises seek to generate revenues for further investment in charitable activities, whereas public utilities and social services are not driven by this motive. Social enterprises should also not be confused with ngos. Many social 116 social enterprise enterprises are created by ngos, but not all ngos create social enterprises. ngos create social enterprises when they are driven by the need to create additional income to sustain their operations and/or to expand the charitable services they provide to communities with whom they work. When one looks at the common features identified above, one may see very little separating social enterprises from business enterprises. Kim Alter (2007) acknowledges this dilemma and singles out purpose as the key factor distinguishing the two. According to Alter, profit is the primary purpose of socially responsible businesses and corporations practicing social responsibility, whereas social impact is the primary purpose of social enterprises and nonprofits with income-generating activities. Hence, the common features between social enterprises and business enterprises may be due to the fact that nonprofits, although founded on the basis of social value creation, need external or self-generated funds for financial sustainability. On the other hand, although for...