Good profits

Monika Jabłońska

Companies involved in social business bring profit and aim to make positive social changes

by Kamila Wajszczuk

Social business is a term made popular by 2006 Nobel Peace Prize laureate Mohammed Yunnus. A company involved in this kind of activity remains a business and generates revenue. At the same time, it serves a social goal, such as supporting the poor, nourishing children or empowering the underprivileged.

In Poland, social businesses are usually based around NGOs and act in connection with them. Many have been formed thanks to the ideas and perseverance of individuals. Their activity ranges from cleaning services and car repair to selling designer jewelry and home furnishings. Is this already a boom?

Image : shutterstock

Image : shutterstock

“I cannot say that social business is in now, we have been working on the issue for about ten years,” said Magdalena Klaus who manages a support program for social enterprises at the Foundation for Social and Economic Initiatives (FISE). Agata Stafiej-Bartosik, country director for Poland at global NGO Ashoka, agrees and stresses that many innovators in Poland have been doing business with profits going to socially important causes for a considerable time. “Ashoka always supported that,” she said.

“The situation is changing. People are beginning to realize that profits can be reinvested,” Stafiej-Bartosik said, pointing to EU funds as one of the major factors. “It is also becoming more common for NGOs to start thinking about a stable source of income in order not to be dependent on authorities’ policies and the whims of donors,” she added. EU funding may not be enough, though. “At first, there was a trend for establishing new businesses, only then did Poles start thinking of the necessary infrastructure,” Klaus said. “Funds from the EU triggered the creation of many social cooperatives, but they often ceased to operate when the funding stopped.”

Changing the job market in Biłgoraj

Funds from the EU were used only at the very launch of Biłgorajskie Przedsiębiorstwo Społeczne (BPS), which operates in the city of Biłgoraj in southeastern Poland, a region known for high unemployment. In 2007, with the help of NGOs, the city’s authorities established a social enterprise that helps battle the problem.
The concept of creating a business unit came after many training sessions, visits to other places and discussions, said Mariusz Wołoszyn, management board member at BPS. “At first, it was supposed to be a social cooperative, but it then became a limited liability company and it turned out to be a good choice.”

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The company has two main goals. One of them is employing people who would normally have problems with finding a job. The other is providing services, as any other company would, Wołoszyn said. These now range from office cleaning services to car washing and taking care of city lawns.The company operates without external financing, the proceeds come from customers. “Just like any other enterprise, we have to find new customers, new orders. We operate on the open market,” Wołoszyn said. “We look for tenders and any other types of orders, also from other businesses.”

Not long ago, BPS obtained several large orders through a tender organized by the city of Biłgoraj. There is no rule as to the clients, though. It has also started working for companies building roads in the region. This required training the firm’s employees, but that was not much of an issue, as BPS is flexible.

Being Together for a better cause
The story of the “Being Together” (Być Razem) Foundation, which runs a social enterprise in Cieszyn in southwestern Poland, goes back 18 years. “At first, we were an association directing its activity to people in Cieszyn who did not cope with their lives in one way or another,” said Mariusz Andrukiewicz, president of the board at the foundation. “The ‘Being Together’ association initially organized a network of homes for the underprivileged in the city, mostly in ruined buildings that needed to be refurbished.”

“CSR should be more about regular businesses forming partnerships with social ones and not just about charitable donations.

“At some point, we came up with the idea to give the people we were taking care of some kind of employment. They usually had problems with getting employed for various reasons. That is how we decided to start a social enterprise,” Andrukiewicz said. The idea came to life about 10 years ago and was followed by the establishment of a foundation. The group of activists then found a former factory building and refurbished it with the help of EU funds.

“Currently, each of our divisions performs differently in terms of business. The laundry is self-financed. The carpentry workshop is also doing well, though it depends on the specific moment,” Andrukiewicz explained. “In the case of the catering business, we are now relaunching it after an unsuccessful attempt to manage it through a social cooperative.” The “Being Together” social business now manages to finance about 85 percent of its activity on the market. The remaining 15 percent comes from a subsidized project. “Our aim is to be 100-percent market-financed, though I do have second thoughts about that,” Andrukiewicz said. “Wisely-applied subsidies may be a good way of supporting social business.” One of the things that makes the Cieszyn-based business unique is the WellDone® brand of designer goods made in its carpentry workshop (see pictures). They have recently formed a partnership with furniture producer and retailer Vox Meble, which started selling the products in its stores.

It is becoming more common for NGOs to start thinking of a stable source of income in order not to be dependent on authorities’ policies and the whims of donors.

Caring for those who care
“Being Together” has yet another goal – to teach others about social business and corporate social responsibility. “In our view, CSR should be more about regular businesses forming partnerships with social ones and not just about charitable donations,” Andrukiewicz said. “What social enterprises need the most is real cooperation with an ‘older brother’ business.”

48-50_SocialBusiness-3Stafiej-Bartosik also feels the need for such cooperation. “An interesting example of social business is co-creation, when social entrepreneurs join forces with a company to reach a common goal. However, this is still very rare in Poland,” she said. Both she and Klaus agree that social entrepreneurs themselves also need to brush up their skills. “Polish social entrepreneurs usually have good ideas, but they lack business-related skills. They have problems in areas such as customer service. We are now at a point where it is not direct financial support that is necessary for social business to grow, but knowledge and skills,” Stafiej-Bartosik said.

“Polish social enterprises are now becoming more professional, they know they must do so in order to stay on the market,” Klaus said. This can be a challenge sometimes, as they often employ people who would otherwise remain outside the job market. Nevertheless, with regular business partnerships and wise support from the authorities, they should be able to grow.

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