Developing an Eco-social Enterprise Session 3 Thursday, 13 May, 2021 Tim Crabtree, Wessex Community Assets & Plymouth University Lujza: Urban food access Adam: Affordable housing in an urban environment Michael: Teaching about waste and recycling with practical use through a new bins Martina: Zero waste shop and waste management Silvia: A space where to support inclusive, diverse cultural and artistic activities and where to promote and support alternative, sustainable economical models Denisa: Waste management and recycling research platform Eva: Reuse and recycle coffee cups Shiran: Urban green roof or community garden with different agricultural systems (e.g. hydrophonic), with composting system, community weekly lectures and "pay as you can" market Katarina: social farming (employment opportunities for people with disabilities) Sabina: project which unite fair jobs with affordable housing Jana: ethical fashion brand that offers well-paid job opportunities in rural area in Western Ukraine; giving part of the profit to support the community Filip: sustainable brewery with opportunities for handicap workers Blanka: Zero Waste Shop Danijel: Independent ecological information service Framework Outcomes Need/baseline Activities Outputs Outcomes Health & well-being Community development Economic development Environmental sustainability Inputs Operations Outputs Customers The Business Canvas - simplified Resources CustomersValue proposition Activities Inputs Operations Outputs Customers The Business Canvas The Business Canvas Inputs Operations Outputs Customers Customers Who are the customers that you will provide products and services to. Are there different types of customer? Outputs For your eco-social enterprise, what are the outputs (products or services) that you will deliver to customers Operations What will your eco-social enterprise do to produce the products/services? Inputs What inputs will you need? In other words, what inputs will be transformed during the operations processes? From local food to local wood: the evolution of woodland social enterprise Over the last 20 years, the local food sector has become more established and influential. A range of strategies have been developed which are potentially relevant to the woodland sector: • Direct links between producers and consumers, e.g. Farmers’ Markets and Veg Box schemes. • Adding value rather than selling primary produce to wholesalers. • Building local enterprise networks and clusters. • Secondary structures to promote innovation, enable local processing, access finance or support joint marketing. Primary Production Basic Processing Value Added Processing Distribution Retail/Food Service Consumption Community owned shops Veg box schemes Farmers’ Markets Country Markets Pick your own Wholefood Distributors Community gardens City Farms CSA’s Care Farms Farm shops Organic farms Local farms Community orchards Community bakeries Local flour mills Woodland systems Inputs: Forests People Equipment Operations Outputs Energy Housing Food Health & care Recreation & culture Education & skills Primary Production Basic Processing Value Added Processing Distribution& Retail Consumption Self-supply woodfuel coops Community supported forestry Community owned woodlands Community managed woodlands Volunteer programmes Care farming Forest school “Tree stations” / processing “platforms” Machinery rings Woodland owner / contractor co- operatives Processing hubs for food from woodlands Greenwood & Coppice products Secondary marketing cooperativesVocational training Community owned shops selling woodland products Biomass ESCO’s Environmental enhancement & biodiversity Community development Local economic development Outcomes Woodhub@Eggardon Woodhub@Eggardon Cultivation, processing & manufacture timber and woody fibres (hemp and flax) Into Construction materials Skills training woodland mgt, sustainable construction, green woodworking, furniture making Workspace for building contractors, carpenters & designer-makers Tim Ingold “Learning is understanding in practice: exploring the inter-relationships between perception, creativity and skill.” Outputs: goods & services or “value proposition” Customers The Business Canvas In the break out rooms: how will you build a customer-base and develop the relationships? How will you test your ideas and get feedback? Operations Inputs Labour What will your enterprise require? • Staff? • Volunteers? • Trainees/apprentices? • People disadvantaged in the labour market? • Board members? Land & Natural Resources • What natural resources will you require? • Land • Water • Sunlight • Etc Physical capital What is required? • Buildings • Equipment • ICT • etc Reception, kitchen, toilets WorkshopWorkshop WorkshopWorkshopWorkshop Shared workshop With machinery Training space Data What information do you need to collect? Do you need to access platforms or create your own? Woodhub Platform: linking suppliers and fabricators On-line platform Manufacturers Designer- makers Sub- contractors Craftspersons Supply of construction components, fittings & furniture Suppliers Financial capital Dorset Community Energy • Funding was secured from the Big Lottery to set up a new co-operative, Dorset Community Energy • Initial target 6 community owned solar PV projects on schools and community buildings in Bridport, Dorchester and surrounding parishes Partners Milldown Primary School, Blandford 49kW 55 • Who will provide this? • Grants? • Loans? • Equity? • What rights do they get? Financial capital Three types of finance Investment in People Investment in Physical Capital Investment in Land & Natural Resources Increased Financial Capital Investment: grants Operations Products & services Investment: loans Investment: equity working capital 3 types of finance •Grants – do not require a financial return. They support social or environmental returns. •Loans (or debt finance) require interest payments and the repayment of the amount borrowed. •Equity is investment in exchange for a stake in the organisation, in the form of shares. Shareholders can receive dividends or interest payments. Key principle 1: Different types of finance might be appropriate at different stages of development Key principle 2: rights to control • Grants do not confer any rights, beyond the contractual obligations that a grant may entail. • Loans carry with them an obligation to repay, but no other rights • Equity can carry voting rights, income rights and/or a claim on the assets of the organisation. • Equity has therefore proved to be problematic for organisations in the social economy (including charities, social enterprises and co-operatives ) Key principle 2: rights to control Rights to vote at general meeting Rights to net surplus Rights to the net value of the assets Democratic rights Property rights Income rights Key principle 3: equity can be important in the early stages of development • Loans are marked on the organisation’s balance sheet as a liability and they usually require security e.g. a building or demonstrable income streams. They need to be paid back from earnings. • Unlike a loan, equity is treated as an asset on the organisation’s balance sheet. Immediate repayment or dividends/interest are not expected. Community share issues using a Community Benefit Society (IPS) • Wessex Community Assets developed a set of model rules for raising share capital at low cost • This means members of a community can invest directly in community projects and services • It is cheap to set up and acceptable to independent financial advisors Wessex Community Assets a secondary structure helping communities raise local finance through share issues and loans £152,775 raised £105,000 raised In the breakout room: How will you finance your eco-social enterprise? What combination of grants, loans and equity do you anticipate? In any system, identifying the purpose or goal is critical “A system isn’t just any old collection of things. A system is an interconnected set of elements that is coherently organised in a way that achieves something………… a system must consist of three kinds of things: elements, interconnections, and a function or purpose.” Operations Inputs Waste OutputsCore purpose According to Meadows “the least obvious part of the system, its function or purpose, is often the most crucial determinant of the system’s behaviour.” Local Food Links’ intention or purpose “Creating affordable, user-led food services which support health & well-being, stronger communities and a better environment” Activities SMART activities which achieve the outcomes Outcomes The difference the organisation hopes to make Purpose Marjorie Kelly There are many changes needed to get us to a new economy – political, cultural, technological. We’ll need changes in regulation, changes in personal values system. But I would suggest there’s a critical element we aren’t talking about enough, and that is ownership design. As one colleague put it, “Ownership is the original system condition.” Ownership is how wealth is created, and it determines who gets that wealth; it determines who controls the economy. The form of the organisation • What will be the RULES of the organisation – the constitution or governing document which sets out the legal structure • E.g. • Foundation • Company • Co-operative • Who will be in MEMBERSHIP? Key stakeholders and their motivations • Paid workers • Volunteers • Service users (inc. volunteers) • Commissioners, e.g. local government • Suppliers Consumer aspirations Producer aspirations Trusteeship aspirations Investor aspirations Stakeholders may have divergent aspirations What do stakeholders have in common? What rights will the members have? Potential stakeholder Membership: Yes or no? Voting rights? Income rights? Property rights? Consumer Worker Supplier Investor In the break-out room: What different members do you intend for your enterprise? What rights will they have? Module assignment This will be focused on the eco-social enterprise that you have chosen, and will comprise four elements: • A 200 to 300 word description of the proposed social enterprise. • A completed business canvas. • A completed theory of change. • A brief description of how your enterprise sits within, and collaborates with, a wider ecology of social economy organisations.