Monday 25 October 2021
We all know a social enterprise is complex. Applying a business model to benefit the community brings with it a raft of challenges. And, one of the biggest challenges for social enterprises is accessing the capital needed to start, operate and grow (Castellas et al., 2017). Traditional commercial enterprises may seek angel investors and financiers – who engage with the hope of a solid financial return. Charitable not-for-profits look to donations and grants from those keen to see a social return. For both, the corresponding story to funders is relatively straightforward. But, what story should a social enterprise tell to attract financial support?
The answer is … ‘It depends.’
The research suggests that the social enterprises that are most successful in attracting capital are adept at tailoring their story in response to the interests of their funders (Roundy 2014). No surprises there I hear you say! But the trick is, social enterprise funders (and other stakeholders) do not all want to hear the same story. Some are more interested in the business model; others want to focus on the social impact and some are keen to understand the social enterprise’s origin story including the founders’ own journeys (Roundy 2014).
Here at the Swinburne Social Startup Studio we have seen first- hand the importance of tailoring the social enterprise story to reflect and engage with the interests and passions of your audience. A well-crafted story, one that reflects and engages with the interests and passions of an audience, will always gain more traction than a “one size fits all” narrative. Forget about copying and pasting to the masses, and instead, take the time to look at your social enterprise through the eyes of your potential future investor or funder.
The lesson from both the research and our own experience in the Studio is that while various aspects of the social enterprise’s narrative – the social issue and the impact achieved, the business model and the origin story – go hand-in-hand they can also be dialed up or down depending on who you want to engage. Think of it is as a set of building blocks that you can mix and match to form nuanced, yet targeted stories.
“Tailoring the social enterprise story is tricky; it requires the social entrepreneur to be both both empathetic and analytical. They need to understand the needs and interests of each potential funder and then communicate to them why and how their social enterprise is a good fit. The good news is that social entrepreneurs are great at empathy and analysis – it’s the basis of the whole social enterprise model.”
– Libby Ward-Christie, Swinburne Social Startup Studio Founder and Director
To help, the Social Startup Studio has developed a range of tools to guide thinking about various stakeholders – including funders and financiers – and their interests. These tools are available (free!) as part of the Social Enterprise Fundamentals which includes a suite of “how to” videos, a workbook which includes a Stakeholder Analysis Tool, and links to other resources. For social enterprises needing ongoing support to identify and access the capital needed to support their early years, the Studio’s Aviate Program provides bespoke support to assess how much capital is needed and how to access it.
References
Castellas, E., Barraket, J., Hiruy, K., and Suchowerska, R. (2017) Map for Impact: The Victorian Social Enterprise Mapping Project. Hawthorn: Centre for Social Impact Swinburne.
Roundy, P. (2014) The stories of social entrepreneurs: Narrative discourse and social venture resource acquisition. Marketing and Entrepreneurships, University of Tennessee at Chatoonga, Tennesse, Unite States, 16(2), pp. 200-218.
