Ask James Caan – Guest Writer – Issue 61
I’m pleased to welcome the next of my guest writers for the column – Jonathan Jenkins – Director of Ventures at UnLtd.
Jonathan has answered a question from an aspiring business man with great social investment plans:
‘I am 19 years old, and have always known I want to go into business. But rather than just make money I want to make sure I give something back by investing in projects around my area. Can you offer me any advice on how to get into this when I am successful businessman?’
JJ: If I was to simply answer the question as it stands, I suppose I would be suggesting that once you have built your business, you should be looking to philanthropy advisers (such as New Philanthropy Capital) and wealth managers (such as Coutts Bank and UBS) who are providing increasing access to these sort of opportunities. Or maybe some of the existing organisations to whom you could offer your services to help mentor (Princes Trust, Young Enterprise, School for Social Entrepreneurs, Social Firms, UnLtd Connect).
However, my immediate and very strong reaction to your question was – why wait to you are successful? Why not build a successful social business and have the best of both worlds?
Whilst many successful business people have made the decision later in life to look at philanthropy – Microsoft’s Bill and Melinda Gates are a prime example – a growing breed of entrepreneurs are embedding positive social impact in the DNA of their very organisation from the start. You might not be aware of the social enterprise/social venture sector but it is growing, and fast, and many are seeing it now as their career of choice from day one. Look at The Big Issue, The Body Shop, Divine Chocolate, Fifteen Restaurants – all run as sustainable businesses but with core social missions at their heart.
In fact, there are an estimated 200,000 people a year looking to start a “social venture” – that is, one that has a social impact at its very core. It could be set up as a charity, or a social enterprise, or just as a traditional private company – in fact, the legal structure is irrelevant to many, however the intentions of the entrepreneur are key.
For me, if you run out of cash, no matter how core your social values, your social impact will be zero. It’s for you to decide how “social” your venture is. You might simply commit to employ or train long term unemployed, ex-offenders, those with physical or learning disabilities whilst operating another purely commercial business. Or you might simply look to source all your supply chain from local, ethical producers, or provide goods or services to disadvantaged communities.
Finding funding for any start is never easy, however there are a number of specialist supporters of early stage social entrepreneurs, notably UnLtd who provide financial and non-financial support to over 1,000 people every year.
There is a growing band of social investors who recognise and demand a social return as well as a financial return. In the UK alone, there are established social investors such as Big Issue Invest, Bridges, Venturesome, Key Fund, Charity Bank, Triodos Bank, Bright Ideas Trust and The Social Investment Business – all of whom manage funds specifically looking for investment opportunities in social ventures.
So in conclusion, now is the time to set up a social venture. There is clear demand from society, increasing unemployment, the economy is teeting on the brink of recession and government has no ability to do much other than reduce funding available. A perfect storm of rising discontent, but a perfect backdrop for a new generation of entrepreneurs to create a social value focussed economy.