Strategy & social enterprise glossary

We’ve designed this glossary to help social enterprises and non-profit organizations in South Africa think clearly about their strategies and business models.

Strategic clarity involves clear thinking, and clear thinking requires clarity of language. Many of us also rely too much on jargon, which clutters our minds and encourages lazy and fuzzy thinking.

Here is some of the terminology that I regularly use in my consulting practice and lectures, and my short descriptions of what each term means in simple English.

Unique opportunities for social enterprises with a for-profit legal form

A social entrepreneur recently called me for some advice.

He had started a “social enterprise” with a for-profit legal form – a private company (“PTY”).

He had managed to secure the South African licence to sell a very promising product that serves the people at the “bottom-of-the-pyramid”.

He then approached some local foundations and corporate social investment (CSI) departments for funding. They said that he had to first create a non-profit company (NPC) and then use this vehicle to submit a funding proposal. In other words, these donors were suggesting that he create a hybrid social enterprise.

We had a short and productive discussion about where the best opportunities for his business were to be found. I explained that creating a hybrid model in this instance is most probably a bad idea.

Since I have this type of conversation quite regularly with social entrepreneurs, I decided to share and elaborate upon the six opportunities we discussed.

Ten confusions about legal forms that will get in your way

This one-page Strategy Brief clears up 10 common confusions about legal forms for social enterprises in South Africa. These make it difficult for social enterprises and non-profit organizations to unlock the potential in their legal forms.

Seven myths about income generation that undermine strategic clarity

Non-profit organizations that wish to design Sustainability Strategies may be sabotaged by these 7 myths. This Strategy Brief will help your organization to overcome these myths and preconceptions, and earn the income needed fulfill its mission.

Choosing the right legal form for your social enterprise: insights from a strategy consultant

Many social entrepreneurs are starting out on their journey to change the world, and considering registering an organization. However, there is a drastic shortage of practical information on the type of legal form they should choose for their social enterprise.

This article from February 2016 aims to clear up some of this confusion.

It discusses the pros and cons of the various legal forms available to social enterprises in South Africa. It shows how much opportunity there is and helps to dispel some misconceptions. It encourages social entrepreneurs to launch a brand and immerse themselves in their work. The best legal form for their social enterprise will emerge; in cannot always be determined upfront.

Setting up a hybrid social enterprise with a mix of legal forms

An increasing number of social enterprises are choosing to use a hybrid of legal forms. We see businesses wanting to register non-profit organizations, and non-profit organizations wanting to setup businesses. Social enterprises with hybrid models are incredibly fashionable. It can even be argued that they have become the norm.

However, there is a very poor understanding of the legal, tax and other implications of establishing a hybrid social enterprise. Furthermore, the majority of social enterprises seem to be choosing hybrid models when they don’t need to, and in the process are creating complicated bureaucratic and ethical problems for themselves.

This e-book was released in September 2014, and has since been presented to multiple audiences such as the NPO Collaboration Dialogue and Community Chest.

BEE-ing Out of The Box

Read my letter to Business Day in April 2008 in response to the interesting and seemingly counterintuitive business deal was recently concluded between Ikamva Labantu, a Cape Town-based non-profit organization (NPO) that builds crèches and shelters and supports foster mothers, and ITEC Holdings, a supplier of office automation.

It discusses the important precedent of this deal, and reflects on the various parties will be able to derive a strategic benefit. I expect we will see many more such deals in the future as the B-BBEE codes become more embedded in the way we do business.

In pursuit of strategic clarity

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