When Corporations and Social Enterprises Collaborate, they can Change the World

Corporations and social enterprises (SEs) both have value that they can offer each other in mutually beneficial ways. While collaborations like these are slowly gaining traction, a lack of understanding on both sides has continued to lead to obstacles.

There is often a lack of trust in the social enterprise model simply because there is the element of profit. Our historical binary model of philanthropy (impact) and profit are not structured to handle SEs who blur these lines. Even though SEs offer more innovative solutions and are partly financially sustainable. When it comes to procurement, corporates tend to discount SEs because they pitch the “impact” angle first. So they redirect the SEs to their CSR teams, who then run into the profit obstacle again. It’s a vicious catch 22. So when structures and policies have not caught up to the new emerging reality yet, there needs to be flexibility.

As for the SE, they often focus more on generating impact for their beneficiaries and forget about generating value for the corporates. SEs need to better balance both the “social” and the “enterprise” in equal parts, and pitch like an SE, not a charity. SEs should pitch both their business and impact offerings, i.e.: how they can save the corporate money or help them earn, or how they can be better for their supply chains. With this positioning, corporates can view them as partners that align with their ESG/social impact goals. SEs should also address the distrust around profits by being transparent with how the profits are distributed, and where/how it sits in the overall pie.

Ultimately, the most important thing is that both corporates and SEs need to be equal partners in the collaboration. There needs to be a common understanding that while the corporates can provide access to markets, networks and funding, SEs offer a pathway to addressing pressing societal challenges, social innovation and creating meaningful impact. Together, these collaborations can build stronger and resilient communities, and pedal towards a more sustainable future – reshaping the way business is done and changing the world in the process.