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Why Social Enterprises will scale up faster than NGOs and Non-Profits?

Why Social Enterprises will scale up faster than NGOs and Non-Profits?

The world is going through some drastic changes with businesses now focusing more towards a sustainable world. Industrialisation not only brought developments that changed the functioning of the world but it also resulted in a world where pollution, inequality, wars and many more such issues are at its peak. Governments keep trying to put in efforts but a helping hand from outside is always appreciated for the noble cause. 

NGO (Non-Government Organisation) is a voluntary group of organisations or individuals, without government affiliation, formed to provide services for communities through analysis and  expertise. It has been one such entity that has striven to work for the betterment of the society but it has always lacked the growth mentality. The work and effort put in by NGOs are seldom noticed and is forgotten even before the effects fully take place. 

Non-profits on the other hand are 501(c)3 tax-exempt charitable organizations and they work for the social cause without any profit in its mind. Their goal is to tackle the issues at hand and all the profits made, if any, are to be reinvested to boost the goals of the Non-profits. It can be turned into a business but the its growth is not as significant as normal businesses. Also, they had to rely mostly on the grants or donations to keep the operations running as it does not have any sustainable way of earning and surviving on its own. 

Social Enterprise (SE) on the other hand is one concept which not only provides a solution to the burning issues of the society but it also focuses on finding a sustainable way of growth and making money from it. It looks to create a proper business-like model that works for the betterment of the society by working out the problems and long-lasting solutions which can be provided by them and in turn make profit out of it. 

Which will scale and how? 
The biggest question in starting any of the above organisation is the scaling. As discussed before, NGOs and Non-profits do work for the social cause but lacks in the areas of developing a full-fledged business. Non-profits can turn out to be a business but then again it has a dependency over financial support. 

Sustainability of social projects is critical; hence services have to be carefully looked at and delivered in a way that adds value to society while generating income for the organisation. Social entrepreneurs should adopt the basic rule that if the service or product is not sellable then it is probably not valuable. SEs should be scalable at other locations and their interventions should be measurable in terms of impact in people’s lives. There are two ways to scale a Social Enterprise, Horizontal scaling (Going wide) and Vertical scaling (Going deep). A hybrid version  of both can also be used but let us just focus on these two first. 

Horizontal Scaling 
This approach tries to approach multiple geographic markets and often different types of customers. Often a standardised product is used which makes it easier to measure the impact. This approach works well if one is looking to produce a vaccine to improve child mortality rate worldwide. 

Vertical Scaling 
In this the focus almost remains on one community, often in one area, and trying to dig deep with a larger portfolio of products. In this approach the social enterprise tries to act as a catalyst through trust, co-creation, and community organizing. The long-term purpose of such organizations is to eventually withdraw from the place, when it is able to solve its own problems. 

For a Social Enterprise to be successful it should have a ‘problem-based approach’ where it should address current challenges to project a better future. For example, a career guidance organisation with special emphasis on mathematics, engineering and technology to rural learners, who would otherwise not have access to such critical information. These kinds of projects are easily scalable and measured to determine impact and the service is critical as middle class families could pay for such information. The only trick is to determine how to be innovative in this project in order for it to be sustainable. 

There are situations where NGOs and Non-profits can turn themselves into Social Enterprises if it deems necessary to have a much bigger impact and bring in a substantial change in the society. In the end, the only obstacle for each of the above discussed organisation is the long-term sustainability that has to be dealt with in the early stages or it will not be able to thrive for long in the current competitive world.


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