In the final instalment of the blog series on social enterprise and development, Emilie Hobbs and Clara Marquardt speak with Paula Melendez, president of Beyond Profit, a student run social enterprise organisation, which has recently received the Social Enterprise Society of the Year Award from the National Association for College and University Entrepreneurs (NACUE). Paula shares her knowledge and compellingly argues that we should pay keen attention to the merits of—and developments in—social enterprise. The interview offers an insider’s perspective on the challenges of expanding social entrepreneurship and on future trends.
Social enterprise is a term we increasingly come across, in business, charities, amongst students and in wider society. On first encountering the term, for many it may conjure a vague concept of ‘good’ business. For Paula Melendez, the president of Beyond Profit, the University of Cambridge’s student social enterprise society, meeting people who are confused about the term is an everyday occurrence. “The interest in social enterprise is growing [in Cambridge]”. But while “a lot of people have heard the term and think it’s the new catchphrase…many don’t actually know what it is”.
This gap in public knowledge is in many ways an opportunity. There is a curiosity around the topic, which those in social enterprise are eager to encourage: “When people find out about social enterprise, that’s actually the exciting part … [they think], ‘Oh wow, this is what I want to do, this combines the environmental focus and the social focus with the business edge’”.
“I am passionate about social enterprise because…”
Paula acknowledges that as an emerging concept, a concrete definition of social enterprise is yet to materialise, but “it’s been increasingly defined in the past few years because legal structures to set up social enterprises have started to be put in place”.
Paula Melendez is a second year history student at Kings College, Cambridge University and the current president of Beyond Profit.
As a standard definition, she points to socialenterprise.org, the main social enterprise umbrella in the UK, which states that a social enterprise “is basically a business with a social or environmental purpose…. As a student society, that’s the definition we use to get the attention of students.
“But we also try to show that there’s a whole range of activities that can be considered as in the realm of social enterprise…all the way from a company with a big department in corporate social responsibility, to something like The Big Issue”. This range is one of the key advantages of social enterprise: “you have to rein people in with something specific … but the great thing about it is actually that it’s such a wide field”.
The conceptualisation of social enterprise may be relatively new to us, but the practice is not. As Paula says, “the great thing about social enterprise is that it can be quite an intuitive thing, and that’s why it has potential for a lot of people…you can make it as big or as small as you want”. The practice of social enterprise is spread across the world and world history: “you can see examples of social enterprise everywhere, even though it’s been very much conceptualised within the Western world”.
Paula feels the benefits and sustainability of social enterprise are clearly highlighted in contrast to charities: “one of the problems of charities is that they don’t necessarily have to be efficient. They rely on fundraising and often have a wide scope in choosing what to do with it. That’s why I think social enterprises are very likely to thrive – if you’re running a business it is in your interest to be efficient … [if] you’re doing things in an efficient, sustainable manner, then your impact is not just going to dry up”.
Beyond Profit’s role in fostering social entrepreneurship
Beyond Profit is part of a growing trend of similar student groups and organisations across the UK. Simon Denny, social enterprise development director at Northampton University, says: “The growing opportunities for the social enterprise sector demand a response from universities which is being met… Nearly all UK universities have initiatives that provide educational and practical opportunities to get involved in social enterprise.”[1]
Examples of university support for student social enterprise movements include Student Hubs (‘connecting students with causes’), the Social Enterprise Network of universities run by the University of Plymouth, and Northampton University’s £1bn University Challenge, which challenges UK universities to spend at least £1 billion of the £7 billion they currently spend on procuring goods and services annually on social enterprise suppliers.
Beyond Profit recently received the Social Enterprise Society of the Year Award from the National Association for College and University Entrepreneurs (NACUE). This means that Beyond Profit’s work is being recognized at a national level.
Beyond Profit is relatively new, set up by Alex Handy three years ago, with “the idea to have a society that would raise awareness of and promote social enterprise to under graduate students, post graduate students, the University and beyond—a society that would show that ‘social enterprises have the possibility of doing good while making money’ – this is the motto of Beyond Profit.”
In its three-year history it has offered two streams; a careers stream (“social enterprise in different areas – microfinance, education, international development, sustainable development”, involving four events a year with invited panels and speakers) and an enterprise stream. The enterprise stream this year ran ‘Meet the Social Entrepreneur’ events (talks by well-established social entrepreneurs, including Tom Rippin from On Purpose, and Cliff Prior, founder of UnLtd) and ‘Be the Social Entrepreneur’ events (talks by younger social entrepreneurs who have just set up their initiatives and to whom students can relate).
On top of this, the society offers an annual lecture, in the past featuring John Bird from The Big Issue, and Sir Terry Leahy, the CEO of Tesco.
Looking at Beyond Profit now, Paula suggests that “we have a lot of potential for growth, and we’re definitely here to stay”.
What makes a social entrepreneur?
A recurrent theme within social enterprise discourse relates to the nature of social entrepreneurs. Are there certain characteristics and motivations which distinguish social entrepreneurs and enable them to combine for-profit skills and a social orientation in one person?
According to a 2004 survey[2], social entrepreneurs tend to be “older, employed, and on higher incomes than mainstream entrepreneurs”. However, they are also to be found in “disadvantaged groups such as those on low incomes or unemployed”. In fact, females and ethnic minorities are more likely to be social entrepreneurs than mainstream entrepreneurs.
The survey results may raise more questions than they answer. Alternative views of social entrepreneurs are more definitive regarding their characteristics: social entrepreneurs are simply “extraordinarily innovative, deploying models that seem to derive results out of thin air”[3]. This characterisation resonates with the ‘hero’genre in social entrepreneurship, i.e. social entrepreneurs are heroes ‘kicking down barriers and driving social change’.
Finally, there is a view which argues that most social enterprises are not the outcome of a single charismatic individual, but of ideas generated and propagated by groups and networks – the focus on the individual entrepreneur is misplaced. The commercial entrepreneur literature initially focused on the ‘hero’ entrepreneur. Subsequently it has shifted towards the procedural aspect of enterprise, because research failed to confirm the existence of distinguishing characteristics between entrepreneurs and non-entrepreneurs. Will the social enterprise literature mirror this shift?
Based on her experience of working with budding social entrepreneurs, Paula thinks that their characteristics are as diverse as their fields of operation: “you can be a social entrepreneur in many different careers…always looking to achieve a social benefit even though you haven’t [necessarily] set up your own social enterprise”.
“But there is one characteristic that all social entrepreneurs have in common – they are very, very passionate”. Where others see problems they see opportunities. More important than a dedication to a specific area, such as education, is the “commitment to making a difference. They are looking for an outlet to catalyse their passion and drive – social enterprise can be that outlet”.
Furthermore, even for those driven by the social outcomes, “social entrepreneurs have to be very conscious of the business aspect”, which Paula maintains is critical to success.
Beyond Profit’s well-received Think Tank programme helped Cambridge students to offer ‘consultancy services’ and their own ideas to establish social enterprises such as Healthy Planet. Does this suggest that certain characteristics of university students give them a unique perspective on social enterprise?
Paula identifies being “passionate, opinionated and self-confident” as a set of characteristics which are “special to students in general, and special to students in Cambridge. Even more than being students…it is about the generation that we are in. We are much more cosmopolitan and therefore aware of things going on outside of our backyard” – an awareness which is central to social entrepreneurship.
Barriers and challenges in expanding the pool of social entrepreneurs
In the past “if you weren’t an English teacher, a doctor, a policy maker, an economist or a dam builder, careers [in doing good] seemed somewhat limited”[4]. But with the rise of social enterprise (and other options) even financial investors, by investing in social enterprises or starting not-for-profit consultancies, can increasingly ‘do good’.
Against this background, is the conception of ‘doing good’ increasingly seen as an option open to every individual? Or, does the conundrum of ‘doing business’ vs. ‘doing good’ continue to constrain the expansion of social entrepreneurship?
Paula sees the perceived conflict between ‘altruistic’ and ‘profit’ motives as remaining a challenge. “We are still clearly falling short of having socially orientated students understand the social and environmental benefits of enterprises even if they are making money…I think that’s where the challenge lies – showing people that these two things can work together”.
This barrier may be most pronounced for humanities students, who Paula sees as often being “put off” by the business aspect of social enterprise. The result is a bias in favour of business students, in whose departments 75% of social enterprise courses reside. Only 1% of courses reside in social service departments[5].
“Enterprise in Cambridge is under-exploited from the humanities perspective. Most of the enterprise societies attract engineers, scientists, maybe a few economists, but very few art students”. Humanities students continue to see Oxfam, Unicef and the WHO as the “holy grail of doing good”. While Paula stresses that this is in itself an admirable goal, she suggests that in many cases students simply “don’t know about other possibilities”, such as social enterprise.
Beyond Profit as an organisation is committed to expanding the pool of entrepreneurs – its committee itself a mix of ages and experiences. But how do they overcome the barriers? Paula highlights the Careers Stream and joint events with other student societies (such as a recent event with the Cambridge Education Society) as effective ways of capturing a broader range of people.
Transforming theory and interest into practice
Herron et al.[6] explain that “the set of behavioural events that leads persons to become entrepreneurs presumably takes place over long portions of their lifetime”. How then can Beyond Profit encourage entrepreneurship amongst students in their short time at university and ensure that students actually transform the theory of social enterprise into practice?
Paula, who herself is in the early stages of setting up a social enterprise, hopes that students might set up enterprises within their time at Cambridge. But she acknowledges that “Cambridge is a very academic place – it would be extremely unlikely that you would be told about social enterprise in your lectures…It’s something that people have to take a personal interest in to discover what it is”. Although she stresses the importance of Beyond Profit’s primary aims of striving to raise awareness and continuing to build interest in social enterprise, she also sees their potential to be a “platform of support for actual social entrepreneurs”.
Paul Graham, a successful Silicon Valley entrepreneur, wrote in a recent essay that “entrepreneurship is something you learn best by doing …the examples of the most successful founders make that clear”.[7] In line with this, Beyond Profit’s 2013 Think Tank fellowship will offer term long consultancy practices, where groups of students will come up with concrete and substantial reports which could potentially be developed into policy recommendations.
Beyond Profit also runs a Business Course, equipping interested people with practical skills through a series of 8 lectures culminating in a business plan competition. In the future, Paula envisions collaboration with other organisations and placements within existing social enterprises, to encourage students to put theory into practice.
Global trends and the future of social enterprise
The future of social enterprise “depends on whether you look at it from a local or a global perspective…Social enterprises that are locally based can be very beneficial very quickly, and they can be relatively easy to run and set up. So far, many existing social enterprises are of a small to medium size, reflecting the large majority of small to medium commercial businesses”. In terms of impact however Paula however recognises that “global social enterprises have a big potential”.
Funding restrictions create difficulties “for people who want to set up an international social enterprise from the UK … because most funding is for projects that are going to benefit people in the UK”. But enterprises may well expand after initially operating in the UK, and “people are taking increasing notice, not just of multi-national companies, but also of international organisations”. The result is an increasing focus on “encouraging people to come up with new models in different places”.
Paula’s personal take on the future of social enterprise is that “it’s an increasingly viable concept because of the kind of economy that we’re in. If you’re a charity, you’re depending on fundraising, it’s something that can dry up easily… and it directly affects your possibility of having an impact whatever your cause is”.
The comparative sustainability of social enterprise is built into its very definition, and it is this which Paula finds most attractive about the concept: “the fact that you can continue to produce funds and maximise the benefits for your cause, whether social or environmental, in a sustainable way”.
As donors and funders of charities increasingly demand sustainability from organisations proposing to tackle social and environmental issues, it’s “less and less the case that charities are actually sustainable”. In their place, “social enterprise has huge potential”.
It is clearly palpable in her discussion and enthusiasm that Paula has “found something to be passionate about.”
By Emilie Hobbs and Clara Marquardt
This is the final article in the Social Enterprise & Development blog series by Clara Marquardt and Emilie Hobbs. Other articles in the series include:
Social enterprise in development, or for development?
New Blog Series: Social enterprise – innovation, development and a new way forward
[1] “Social enterprise should be made central to higher education strategy” (Denny, 2012)
[2] GEM survey (GEMUK ,2004)[3] “Is there an alternative to the Big Society?” (Schwartz, 2011).
[4] Ken Banks (2012) (The founder of FrontlineSMS)[5] “Social entrepreneurship education: Is it achieving the desired aims?” (Brock et al, 2010)[6]“A structural model of the effects of entrepreneurial characteristics on venture performance” (Herron et al, 1993)
