Most successful ventures solve a need. Dara Connolly’s social enterprise deals with three. ReCreate takes end-of-line and surplus stock from businesses and reuses it as children’s arts materials for schools and community groups. The schools save money, businesses cut down on waste and the environment benefits because there is less landfill. Underpinning all of this is the company’s central mission — fostering children’s creativity. “Everybody wins,” said Connolly.
According to a report last year by Forfas, Ireland’s enterprise policy advisory body, the social enterprise sector has the capacity to double employment, with the creation of an extra 25,000 jobs, by 2020.
It defines social enterprises as businesses set up to tackle social, economic or environmental issues. There are more than 1,400 in Ireland, employing 25,000 people, with a combined income of €1.4bn.
Darren Ryan, chief executive of Social Entrepreneurs Ireland (SEI), which funds and supports start-up and second-stage social enterprises, believes that the sector’s potential is even greater.
“There is growing recognition from Ireland’s political and policy leaders that social enterprise has the potential to contribute significantly to our economic recovery,” said Ryan. “A great deal of this increased interest has been driven by the job-creating potential of the sector. Recent figures suggest that if Ireland were to approach mean EU levels of social enterprise output, there could be at least 65,000 jobs in the Irish social enterprise sector over the coming years.”
During the recession, SEI saw an increase in projects set up to tackle unemployment, mental health and rural isolation. “We have also seen an increasing number of social entrepreneurs who are using new technologies to bring about social good,” said Ryan.
One measure of the sector’s strength is the number of applications received by SEI for its financial support, which can be worth up to €200,000 over two years. This year applications have been made in record numbers — “up not just in terms of quantity but quality too”, said Ryan. This is partly due to the term “social enterprise” becoming “a common and well understood name for something that has always existed”, he added. “We also see more and more people wanting to either set up a social enterprise or work in one, typically young people who are really talented and who are willing to take a drop in salary to work in this sector.”
Business students were taking modules in social entrepreneurship, but social and community courses were also including modules on entrepreneurship, said Ryan.
While most of the organisations supported by SEI are non-profit, increasingly it is seeing applications from start-ups that want to make a social impact — and a profit. Lisa Domican’s Grace App for Autism was supported by SEI. The app, a communication and learning tool for children with autism, has been downloaded from the iTunes store more than 30,000 times worldwide, selling at €29.99. A new version, which is available in six languages, has just been launched.
Its potential is enormous, but making ends meet is hard. A third of Domican’s revenues go to the iTunes store and she splits the rest with her app developer, who had worked for free.
Ryan said: “Domican’s aim is to make a social impact, but she also wants to make a profit so that she can scale and grow the business internationally in order to make as big a social impact as possible. The biggest challenge facing many social enterprises is getting support as early-stage entrepreneurs.”
As a remedy, SEI has set up the School for Social Entrepreneurs — the country’s first business incubator for social enterprises — at the Fumbally Exchange in Dublin city centre. Lynda Stopford, who heads the school, said that it had 27 participants “learning everything from how to manage money to corporate governance and measuring impact”.
She added: “Social enterprises don’t typically get the same access to support as so-called regular businesses. But social enterprises are businesses too, they employ people and they make an economic impact as well as a social one.” If anything, social entrepreneurs may need more help building sustainable businesses than regular entrepreneurs.
“No investor is going to swoop down in a helicopter and invest in their business, so it has to be self-sustaining,” said Stopford. “The kind of businesses we support are trading, have customers, have products and revenues, but the profits go back into the business.”
In the UK such companies have a recognised legal structure as community interest companies, or CICs. In Ireland no such structure exists and social enterprises fall between two stools as they are neither charities or “for profits”.
The DCU Ryan Academy for Entrepreneurship — a joint venture between Dublin City University and the Ryan family, who set up Ryanair — is also looking to nurture social enterprise though its Menter Iontach Nua programme, which offers an MSc in social enterprise. Its first class of 37 has just graduated.
Aifric O’Malley, who heads the programme, said: “The driver behind the course was the fact that many social entrepreneurs have the passion, but not the academic or business rigour to drive their project through to fruition.”
It covers elements such as HR, marketing, corporate governance and business plans. The course had more than 380 applicants.
“Social enterprise is seen as a valid career option,” said O’Malley. “The recession has had an impact among the younger generation coming through, that money isn’t everything. They are more socially and environmentally conscious than their parents’ generation.”
John Evoy, a former Wexford farmer who went back to college to train as a community development worker, said that if the government were serious about supporting social enterprises, there were practical steps it could take
Three years ago he set up the Irish Men’s Sheds Association, offering “a space where men can find friendship, meaning and purpose”.
There are now 215 Men’s Sheds in Ireland, and members put their experience and skills to good use in the community. An estimated 7,000 visit a shed — whose slogan is “Men don’t talk face to face but shoulder to shoulder” — every week.
“Particularly during the recession, lots of men needed some support and something positive in their life,” said Evoy. But social enterprises need support too. “Even just having a small state department that says, ‘We are open to ideas that have a social impact,’ which it could then seed-fund, would help.”
Changes in the VAT regime would also help. “As soon as a small business starts to trade, it can get its VAT back,” said Evoy. “An organisation like ours can’t.”
He said local authorities were helpful, but a blanket policy not to charge rates would be a huge help, as would an exemption on the universal social charge, on the basis that the businesses are already making a social contribution.