Co-ops and Social Enterprises

What is a Co-operative?

A cooperative (also co-operative or coöperative; often referred to as a co-op or coop) is defined by the International Co-operative Alliance's Statement on the Co-operative Identity as an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise[1]. It is a business organization owned and operated by a group of individuals for their mutual benefit.[2] A cooperative may also be defined as a business owned and controlled equally by the people who use its services or who work at it. Cooperative enterprises are the focus of study in the field of cooperative economics.

Social Enterprises:
Social enterprises are social mission driven organizations which trade in goods or services for a social purpose. Their aim to accomplish targets that are social and environmental as well as financial is often referred to as having a triple bottom line. Social enterprises are profit-making businesses set up to tackle a social or environmental need. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose is central to what they do.

Rather than maximising shareholder value, their main aim is to generate profit to further their social and environmental goals. Therefore some commentators describe them as 'not-for-profit' as their profits are not (at least primarily) distributed to financial investors. Others dislike the term as it suggests they have an unbusinesslike attitude. An ingenious solution to this quandary is to call them for 'more-than-profit' (a term used at the Social Enterprise Institute Conference, Herriot-Watt University, in 2003).[1]

It could be that the profit (or surplus) from the business is used to support social aims (whether or not related to the activity of the business, as in a charity shop), or that the business itself accomplishes the social aim through its operation, for instance by employing disadvantaged people (social firms) or lending to businesses that have difficulty in securing investment from mainstream lenders.

In Britain and North America, there is less emphasis on generating a surplus and more on the double bottom line nature of the enterprise. European usage tends to add the criterion of social rather than individual ownership.

Social enterprises are generally held to comprise the more businesslike end of the spectrum of organisations that make up the third sector or social economy. A commonly-cited rule of thumb is that their income is derived from the business trading rather than from subsidy or donations.

Social Firms:
A Social Firm is a business created for the employment of people who have a disability or are otherwise disadvantaged in the labour market. The commercial and production activities are undertaken in the context of a social mission, with profits going back into the company to further its goals. A significant number of the employees of Social Firms will be people with a disability or disadvantage, including psychiatric disabilities. The firms grew out of disillusionment with mainstream businesses, and the failure to recognise or enable everyone's potential. All workers are paid a market-rate wage or salary that is appropriate to the work. All employees are intended to have the same employment opportunities, rights and obligations.

For more information about Social Firms see the website of Social Firms UK, the UK's national support agency encouraging the development of Social Firms: Social Firms UK In recognition of the growing interest in Social Firm development in countries all over the world now, Social Firms UK launched the International Social Firms Alliance (ISFA) in March 2007. ISFA is an online area where people and organisations can meet virtually to discuss common interests and share good practice. For more information visit ISFA

Social Firms Australia (SoFA) is a not- for- profit organisation developing social firms in Australia. SoFA is committed to improving the quality of life as well as the social and economic integration of Australians living with a psychiatric disability. For more information visit Social Firms Australia

Social enterprise in the North American context

The Social Enterprise Alliance, based in the USA with a membership that is mainly from the USA and Canada, just (March 2006) broadened its definition of Social Enterprise to

An organization or venture that advances its social mission through entrepreneurial earned income strategies.

from the prior definition

Any earned-income business or strategy undertaken by a nonprofit to generate revenue in support of its charitable mission.

This definition change specifically encompasses for-profit entities with a social mission, since some social mission organizations are choosing to incorporate as for-profit corporations (and some nonprofits are creating for-profit subsidiaries). The focus here is on the enterprise being carried out by an organization, and generating revenue, but not necessarily a surplus. Many social enterprises in North America are considered successful if they break even, or even if they operate at a loss if the effectiveness in social mission is achieved. For example, a social enterprise that employs formerly homeless people at a slight loss might be a big success if the amount of the loss is much less than the amount of the social supports that would otherwise be provided in lieu of employment.

Leading North American examples of social enterprise include Greyston Bakery (produces ingredients for Ben & Jerry's ice cream) and Housing Works in New York, Rubicon Programs in California and Kidslink in Ontario.

Another leading organization in the social enterprise field is Community Wealth Ventures, which is the largest social enterprise consulting firm in the country.

Much of the field in North America was driven by thinking from REDF (formerly the Roberts Enterprise Development Fund). REDF, which pioneered Social Return on Investment Analysis in connection with funding numerous social enterprises in the San Francisco region, such as Rubicon Programs. Working Assets, the San Francisco-based company, created a model of social enterprise through its mobile, credit card and long distance services that automatically generate donations to progressive organizations when customers use its services. To date, Working Assets has raised over $50 million to organizations like Amnesty International, Doctors Without Borders and Planned Parenthood.

The Social Enterprise Reporter (http://sereporter.com/) covers news for and about nonprofit entrepreneurs in North America.

Another root of social enterprise came from People-Centered Economic Development which began with a white paper delivered to the Committee to re-elect the President in 1996 describing a profit-for-purpose business model for the (then) dawning information age. In this model, surplus is created to invest in social or community purpose, with the aim of leveraging both conventional and social purpose business by means of microfinance investment providing access to information through affordable broadband internet access. The model has been available free to use without copyright on the web since 1997[14].

It was first deployed in Russia to leverage the Tomsk Regional Initiative and Microfinance Bank 2001-2004, which became the template for the Russian Microfinance Center in 2002. P-CED incorporated as a UK based guarantee company in 2004 to continue advocacy work for social enterprise in Ukraine.

Social Enterprises in India

Dayodaya Ethical Group (DEG) is a co-operative organisation, works for the animal rights and provide education to the slum children. They have opend 63 gaushallas across the country and provide shelter to more than 30,000 old aged cows. They generate their revenue by selling milk, and through production of biogas.

The Madras Medical Mission (MMM) is a voluntary organization established by the members of the Syrian Christian community in Chennai, India inspired by the missionary zeal of Bishop Zachariah Mar Dionysius, Metropolitan of the Madras Diocese of the Orthodox Church of India. Strengthened by the devotion and commitment of the members of this Community at Chennai (erstwhile Madras city of Tamilnadu) who promoted the registered charitable society in 1982, it strives to participate in the healing ministry by seeking to foster an environment of caring, compassion and love that enables it to respond to patient needs in enviable ways.

From modest beginnings two decades ago, the synergy of proficient practitioners, prudential management and providential guidance has metamorphosed this ISO 9001:2000 certified Madras Medical Mission into an organization of excellence that promotes some of the finest super-specialty tertiary care medical institutions in India , with superlative infrastructure, leading edge technology and accomplished professionals.

The George Foundation (TGF) is a non-governmental organization established in 1995 by Dr. Abraham M. George in Bangalore, India. TGF's Baldev Farms funnels profits from the sale of crops to finance the foundation's other charitable projects (school for financially impoverished children, women's empowerment, basic medical care, and other relevant initiatives).

Pathway India is a non-profit children's organization established in 1975 by Dr. ADSN Prasad in Chennai, India. Children with mental and learning disabilities create a wide range of products from jewellery to bread and use the profits to better the lives of children to produce a sense of independence.

http://www.unltdindia.org/ Unltd is modeled on the lines of Unltd in the UK.

Social Investments.com: http://www.socialinvestments.com/catalyst_si/index.jsf

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