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.

How does your personality determine the best legal form for your social enterprise?

This presentation explores how a social entrepreneur’s personality (and preferred business model) strongly influences the type of legal structure that best suits their social enterprise. It contains the types of challenges that social entrepreneurs bring to my consulting practice. It includes 14 personality questions that entrepreneurs need to answer in order to make the best choice for themselves.

This presentation was first given at the Pathways to Funding Do-ference on 28 September 2017. This event was organized by the Bertha Centre for Social Innovation and Entrepreneurship at the University of Cape Town.

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.

Social enterprises in South Africa: don’t let legal forms get in the way

Social enterprises are rapidly emerging in South Africa. However, many social entrepreneurs find themselves confused about which legal form to adopt and the flexibility of their current legal form. Too often, entrepreneurs receive bad advice and create unnecessary complexity for themselves.

This presentation clears up 10 common confusions about legal forms for social enterprises in South Africa. It also shares six income tactics that social enterprises can pursue, regardless of their legal form.

This presentation was first given on 16 September 2016 at the Pathways to Funding Do-ference by the Bertha Centre for Social Innovation and Entrepreneurship. It is based upon the many requests I receive each week for clarity on this topic.

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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