ON a long train ride inside a dark tunnel, it’s best to have entrepreneurs as fellow passengers: they always hope to see the light at the end.
Hope is what many implementers of social enterprises latch on as the lockdown measures against the Covid-19 pandemic have brought the economy on a downhill journey.
The economic and health crises has impinged on attempts to make development more inclusive; a slogan harped on since nations upheld the Millenium Development Goals (MDG).
Three years ago, Marife M. Ballesteros and Gilberto M. Llanto of the Philippine Institute on Development Studies (PIDS) have noted a resurgence of social enterprises, which some pundits also call as “capitalists with a heart.”
Three years, hence, Ashoka Philippines Country Director Abigail Mapúa-Cabanilla echoed the importance of social enterprises as the country still seeks solutions to address social inequalities that were further brought to fore by the crises.
“We remain to have the highest inequality rate in the Asean [Association of Southeast Asian Nations] region with 22 million Filipinos living below the poverty line,” Mapúa-Cabanilla told the BusinessMirror.
She also noted that the country dropped three places on the World Economic Forum’s Global Gender Gap Report for 2017 and grappled with a record-high inflation rate of 6.7 percent, “even more magnified by the Covid-19 pandemic.”
More active
BALLESTEROS and Llanto wrote in their PIDS paper in 2017 that “unlike traditional enterprises, social enterprises engage in for-profit activities with more active and deliberate action towards raising the quality of life of the vulnerable and marginalized communities.”
These companies also aim to profit but their business must have a social impact. According to Mapua, social enterprises also have a big opportunity to address development gaps and achieve the strategic vision set out by the National Economic and Development Authority (Neda) in line with the Sustainable Development Goals (SDGs).
In a study conducted by the British Council five years ago, the Philippines had 164,473 social enterprises, which constitute 17 percent of the 987,974 companies registered with the Securities and Exchange Commission (SESC).
Last year, the Asian Development Bank noted that social enterprises remain limited in size and scale, thus limiting its impact and profitability, due to critical gaps in the ecosystem infrastructure in the country like access to capital, innovative financial mechanisms to unlock additional capital, ecosystem knowledge of social enterprises and data on social enterprise impact.
This echoes Ballesteros’s and Llantos’s view that the policy environment in the country is yet unresponsive to the growth of social enterprises.”
Enough room
MAYBRIDGE Financial Chairman Joey A. Bermudez, social enterprises are not a new phenomenon in the Philippines. In fact, Bermudez said he had seen, several decades ago, numerous organizations striving to deliver social good in a commercially sustainable fashion.
Nevertheless, Bermudez emphasized that social enterprises are not a homogeneous lot. He noted a wide diversity among social enterprises in terms of organizational structure, business model, operating paradigm and governance.
“However, one can rightly say that social enterprise is a much tougher undertaking than ordinary commercial undertakings,” Bermudez told the BusinessMirror.
To develop and be sustainable, social enterprises need to be given enough room to grow and develop. Moreover, social entrepreneurs should also enjoy equal opportunities to prove they can be capable themselves in a level playing field.
Bermudez also pointed out that regulations should not serve as stumbling blocks in their development.
“The last thing they need is a Magna Carta for Social Enterprises. Invariably, whenever regulation is passed to deliver a benefit to any particular sector, that benefit is far outweighed by intrusive regulation.
“Probably the only regulation that social enterprises need is one that protects them from abuse of market power by the dominant players in the supply chain,” he added.
Restaurants, responses
COURAGE Asia President and Founder Adolf Aran Jr. told the BusinessMirror that social entrepreneurs are necessary as the Philippines is constantly challenged by crises, both man-made and natural causes.
“When the [enhanced community quarantine was imposed] last March, the economic impact on the MSMEs [micro, small and medium enterprises] was hard [and] deep; and it pushed them into a life-or-death situation.”
Courage Asia is a management consulting firm, created to help businesses, particularly those in the food and beverages (F&B) and hospitality industry, in the areas of communication, operations, training and general management.
Beyond profit, Courage Asia immediately responds to the community or communities within its industry, Aran said. He added that social entrepreneurs put together material resources and manpower and even its talent to reach out to affected areas.
The barrage of crises that struck the Philippines had made social enterprises realize that it must not solely rely on government assistance, according to Aran.
“We saw campaigns with grassroots activities, ranging from ‘Sky Hydrants’ for waterless areas, soup kitchens manned by chefs and cooks and other ‘lightning’ projects spearheaded by social entrepreneurs,” Aran said. “More than the relief donations, a lot of efforts are being poured into rehabilitation and rebuilding, for these affected areas, particularly by those communities affected by typhoons Rolly and Ulysses.”
Reeling from crisis
ARAN admitted the industry currently faces a lot of uncertainties.
He fears these uncertainties would result in a lot of closures from the small-scale and medium-scale business sector, ranging from street stalls and kiosks, independent fast-casual and even fine-dining restaurants, whose clientele will start downgrading or shifting their preferences to other dining options.
“Now, you are faced with a market that’s discouraged to dine in the restaurants [and are,] instead being asked to do mostly takeout and delivery,” Aran added. “The timeline of when dine-in will go back to ‘normal’ is still a big question mark.”
To address these issues, a consortium of restaurants called upon its members to introduce schemes on how to manage the expense-cutting measures and revenue-generating activities.
Aran also revealed that some single-unit establishments were helping each other on supplier issues, and how the “big brothers” (global multinational food chains) were providing best practices on the execution of the safety protocols, especially those who were able to immediately execute the government-mandated policies and procedures.
He said entrepreneurs reached out to its community “in the same mode that entrepreneurs strike when there’s an opportunity to create more business and when the need arises to help their fellow entrepreneurs.”
“Beyond profit, when there’s a chance to serve, its immediate community or communities within its industry, social entrepreneurs put together material resources and manpower and even its talent to reach out to affected areas,” Aran said.
Years ahead
NOTWITHSTANDING the lockdown, Aran noted that restaurant operators have found out that takeout and delivery will be the preferred direction of the industry.
“If government policies extend beyond the ‘ber’ months,” Aran said traditional players, dominated by fast food and fast casual players, will now be joined by caterers (displaced by cancelled functions and gatherings) and by new neighborhood players.
“It’s survival of the fittest, not just by all types of players, but by all delivery service providers,” he added. “Beyond GrabFood and LalaFood and Food Panda, there are new challenges that were created by opportunities borne by the crises.”
Aran said the barrage of crisis that hit the country has shown that they cannot simply rely on government and individual support.
Together with business partners, Courage Asia developed an automated online ordering system called “restobots,” which allowed their clients to install, set up this system, with zero-cost on the part of client.
“Times like these, you need to understand that the business environment needs to have enough opportunities to survive and, eventually, to thrive.”
Aran said social enterprises have realized the importance of going digital in the time of pandemic. He pointed out that digitalization is the safest, fastest and most cost efficient way, as prompted by the pandemic.
“Imagine a business implementing an online ordering system using its web site or Facebook Messenger, partnering with online payment systems, collaborating with logistics delivery providers: contactless, cashless and measurable results,” Aran explained.
Since necessity is the mother of invention, Courage Asia observed that digitalization is now enabled by technology, social media and improved Internet connectivity.
Coastal areas
FOR Que Rica co-founders Rica and Carlo Buenaflor, the way to empower people in Bicol is one boat at a time.
Through its “Fleet of Hope” program, she said Que Rica is implementing a livelihood rehabilitation and recovery program for the local fishing communities in coastal areas in Bicol.
Que Rica, in partnership with Hayag PH, has already raised over P400,000 in relief operations and has distributed relief goods to 1,100 of families in the past couple of days.
The female Buenaflor is now pushing the envelope as Que Rica plans to go beyond relief response, and is calling on civic-minded individuals and organizations to work together towards building back livelihoods and the ways of life, by sponsoring motorized fishing boats.
She said Que Rica is looking for ways to help these communities recover and start rehabilitating their sources of income.
“We are more than happy to paint your brand assets on the pledged boats,” she said.
Mrs. Buenaflor said they are aware that recovery for the fishermen takes a longer time and it would be a huge challenge for them to bounce back. Having a major part in the country’s supply chain, she pointed out it is high time ro help them in their time of need.
“Even before the typhoons and the pandemic, our fishermen have spent more time at sea, have gone farther out, and have caught less. Many cannot even afford to eat what they catch. And now, because of the consecutive typhoons, they don’t have boats to fish at all,” she added
Helping fishermen
IN 2006, Que Rica donated 30 bangkas to the coastal communities in Bicol. This year, Que Rica is calling on individuals and organizations to help fund motorized fishing boats to our fishermen and their families.
In their ongoing relief operations, Mrs. Buenaflor noticed that while distributing seedlings to farmers to restart their livelihoods, they found out that it takes one year for an abaca grower and up to two years for coconut farmers to be able to harvest what they have replanted.
Speed is the essence for a community to recover after a disaster.
“We decided to focus our livelihood recovery initiative on fishermen, because for them to start feeding their families again, all they need is a boat,” she told the BusinessMirror.
“One motorized boat is typically shared by two to three families; so the sense of community and the impact in their livelihoods become a more cooperative effort,” she said. “We’re hoping Hayag helps them jumpstart economic recovery.”
The goal is to launch a hundred boats by the end of the year, Mrs Buenaflor said.
Relying on strength
FOR Mapúa-Cabanilla, the tack is to leverage on the strength of social enterprises to bring about systemic change in national development.
She pointed to one of the programs of Ashoka that seeks to broaden the work and scale of inclusive economies in Asean. She added that the program supported this year about 40 Filipino women social entrepreneurs working on diverse challenge areas and offering a diversity of venture solutions, including the building of their skills, leadership and network.
Mapua said the program will continue next year to continue supporting social enterprises to deliver greater inclusion, equality and sustainability in national development.
The Arlington, Virginia-headquartered Ashoka is the first and largest network of leading social innovators in the world. Founded in 1980, Ashoka pioneered and helped establish the field of social entrepreneurship.
Right now, over 3,500 Ashoka Fellows in 93 countries are working in all fields: from health and human rights to education and the environment.
Mapua-Cabanilla said Ashoka is bent on championing the work of installing and activating an “everyone is a changemaker” mindset in each person. She said this is the goal of every country no matter what stage of development a country is in.
Individuals within groups
AN “everyone is a changemaker” (EACH) mindset is crucial in making sure all citizens are included in the conversation and plays an active role in creative problem-solving and developing solutions with the intention of driving meaningful systemic change as opposed to band-aid and short-sighted solutions, Ashoka said. An “EACH” mindset empowers every citizen to improve or create better systems for themselves and for others, the organization added.
“Socioeconomic development can only be truly sustainable if many players in the systems are able to act and intervene in various aspects to push for development,” Mapua-Cabanilla said. “Furthermore, an ‘EACH’ mindset manifests not only in social entrepreneurship work and business but can very well be present with individuals within organizations and institutions.”
Furthermore, Ashoka aims to form collaborative networks and spaces that convene innovators who are already tackling socioeconomic issues directly. By bringing them together, Ashoka expects intelligent and practical visionaries will harness their talents and energies to allow their changemaking initiatives to grow, and collaborate with one another and strive to help solutions that transform society’s systems scale in terms of impact.
Scaling empowerment
ASHOKA believes socioeconomic development can only be truly sustainable if many players in the system are able to act and intervene in various aspects to push for inclusive national development, according to Mapua. In short, Ashoka needs co-leaders and cross-sector partners who will share this heavy lifting work with them, according to Mapua-Cabanilla.
“Media, in its many flavors and platforms, is a powerful tool in driving everyone a changemaker mindset and surfacing real and tangible changemaker stories with felt impact,” Mapua-Cabanilla said.
In line with Ashoka’s global vision of “everyone a changemaker,” Ashoka Philippines wants to focus on the goal of scaling the empowerment of every Filipino, she explained.
First, we plan to co-create inclusive economies, such as our “Women Together for a Better Normal” program, Mapua-Cabanilla said.
Second, Ashoka is co-leading a collaborative network called “BRITE,” or the “Barangay Resilience and Innovation through Empowerment” network. According to Mapua-Cabanilla, this network aims to build the capacity of community leaders to identify problems and design solutions in response to Covid-19 for their respective communities.
By equipping and empowering community leaders and their local government units (LGUs) with necessary tools and co-creating evidence-based and innovative-driven solutions with them, the BRITE network can develop greater potential for deeper and wider-reaching impact for its capabilities in developing solutions that are community-led, community-specific and community-centric.
Transforming system
FURTHERMORE, Ashoka is co-leading and is interested in developing a group of around 30 youth-serving organizations, Mapua-Cabanilla said. She explained this provides an avenue for leaders to discuss and collaborate towards the goal of ensuring that every young Filipino can be a problem-solver for the common good.
Finally, the Ashoka fellowship program is a vital cog to its goals. It has recognized and supported close to 4,000 leading social entrepreneurs from over 90 countries who have practical solutions that transform society’s systems to address complex problems.
Mapua said an Ashoka Fellow receives highly-personalized support and their life-long membership to a global-peer network, which grants them increased visibility and exclusive opportunities through programs, events, platforms and partnerships that accelerate their impact.
“We have been doing this since 2013 in the Philippines and our search will continue for years to come,” Mapua said.
Mothers as entrepreneurs
ACCORDING to Bermudez, social enterprises like “Iskaparate” should be given all-out support because they fill important gaps that are left wide open by an under-resourced public sector and an irresponsible private sector.
The women entrepreneurs in Iskaparate are poor entrepreneurial mothers who try to fight poverty through honest and honorable capitalism.
Although they are in a position to invoke social inequity as an excuse sliding into mendicancy or even engaging in criminal activities, Bermudez commends the mothers, called “Nanay,” as they opted to roll with the punches and fight.
“For their courage and entrepreneurial tenacity, they deserve the support of everyone,” Bermudez said.
Through Iskaparate, the Nanays will have an online platform (www.iskaparate.com) “where they can showcase their products, tell their stories and provide their contact details.”
Moreover, the platform will transform into a full-fledged e-commerce storefront supported by digital marketing.
“By rejecting mendicancy as an option, the entrepreneurial poor are proving themselves worthy of the same adulation that our healthcare workers have gotten,” Bermudez said. “They present to us a new face of capitalism, a refreshing brand of honest and socially-responsible entrepreneurship.”
He added that some businessmen “can teach them a thing or two about savvy and ‘future think’ but these Nanays can teach us a thing or two about survival and courage.”
“They do not have a solid balance sheet but that’s only because accountants have not found a way to value entrepreneurial tenacity.”
A fighting chance
TO empower the mothers, Iskaparate provides them an opportunity to be discovered by a wider market. It digitally promotes the businesses of the Nanays. Moreover, the mothers are trained to be responsible digital citizens.
“It provides the ‘Nanay’ a platform for online settlement and order-taking. It gives the underestimated ‘Nanay’ a rightful presence in the global supply chain,” Bermudez said.
There are now 33 entrepreneurial mothers in the site but Iskaparate hopes to recruit thousands within the next 12 months.
Bermudez said these women will level up in time. But first, they should be given a fighting chance, he added.
He is urging experienced businessmen to mentor the women and help them connect to the right people and transform them to become digital entrepreneurs.
He said Maybridge is also inviting businessmen to fund towards recruiting more mothers to the platform.
“Thousands of ‘Nanays’ are asking to be included in the platform. We will onboard all who hurdle our criteria but the pace at which we can do so will depend a lot on the support of the sponsor community,” Bermudez said.
Sui generis
ACCORDING to Bermudez, being misunderstood is the biggest challenge facing social enterprises.
As a sector, they are sui generis, he noted. Since the majority has a vague understanding of the dynamics of social enterprises, they find it extremely challenging to get the support they need, Bermudez added.
“When social enterprises seek external capital, they are subjected to the rigorous yardsticks applied to regular commercial enterprises. Social good is Greek to accountants and rating agencies,” Bermudez underscored.
Further, social enterprises face herculean challenges to compete in the open market with commercial enterprises that are driven by pure financial returns. Bermudez likened this scenario to running a race and being required to take a longer route than the other participants.
Entrepreneurs seek to sustain spirit of social enterprise amid crises
