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31 May. 2016 | Comments (0)
In my forthcoming working paper on the changing face of corporate philanthropy in Asia I’m exploring how giving by businesses is influenced by new models of philanthropy and the rise of social entrepreneurship. In previous posts, I’ve given examples of how corporate venture capital funds are investing in early stage enterprises that generate social value profitably; how skills-based volunteering is helping to strengthen the strategy and operations of nonprofits; and the potential for giving circles to engage employees with charities in their community. In this final post, I’ll illustrate how two Asian listed companies have fully embraced the growth of social enterprise through a range of innovative activities that support individual enterprises and their ecosystem.
DBS Bank (Singapore)
The Development Bank of Singapore (DBS), as it was known when it launched in 1968, has been an important institution in the nation building of the island state. Today, DBS is one of the largest banks in Southeast Asia with operations in 18 markets. The bank’s corporate foundation was established in 2014 to celebrate Singapore’s 50th anniversary of independence, but DBS’s interest in social enterprise goes back seven years earlier.
Singapore has a long tradition of charitable organizations, but in 2007 social enterprises were few and far between as the sector was just beginning to take shape. That year, a handful of senior DBS executives attended a social enterprise forum and realized that these innovative, socially-motivated businesses were not so different from the small- to medium-sized enterprise (SME) sector that the bank had served for decades. A year later, DBS launched its “Social Enterprise Banking Package,” the country’s first banking service customized for the needs of social enterprises, with substantive fee waivers and discounts.
The bank’s new strategy would support social enterprise in three areas:
- Increase awareness of social enterprises and the social entrepreneurship sector
- Support social enterprises through seed funding, mentorship and volunteerism
- Integrate the support of social enterprises into the bank’s culture and operations through special banking packages.
DBS developed partnerships with leading academic institutions, including in China and India, to deepen its understanding of social enterprise in emerging markets, and rolled out its specialized banking products to new countries.
The DBS Foundation launched in 2014 with an initial fund of US$36 million. Its inaugural Head, Patsian Low, described the foundation’s formation as “a natural progression” of the bank’s support for social enterprises, which started with providing banking products, evolved into to a corporate social responsibility (CSR) strategy to build the social enterprise ecosystem, and culminated in the launch of a foundation that supports social enterprises through the three stages of their lifecycle—start up, growth, and scale.
In partnership with the National University of Singapore, the DBS Foundation runs a regional “Social Venture Challenge” to identify promising enterprises across eight countries, including newly democratic Myanmar, where social enterprise can contribute to the nation’s human development. The foundation offers social enterprise grants of up to US$72,000 for “prototype” and later-stage business development, coupled to mentoring by staff from the bank’s business units.
Reflecting on what DBS has learned over four years of helping foster and build social enterprises, Low says the key lesson has been about “patience.” She says “the kind of work we are doing now is about nurturing the whole ecosystem. It requires us to patiently collect data, analyze and reflect on what about the process makes for the creation of successful social enterprises.”
Hong Kong Broadband Network
Hong Kong Broadband Network (HKBN) has grown rapidly since its establishment in 1999 to become the island’s largest supplier of high speed fiber optic residential broadband. The company was bought out in 2012 by CVC Capital Partners and 63 of its managers before going public in 2015. Co-owner Ivy Lau, who leads on the firm’s social engagement, explains that the company initially had diverse charitable and volunteering programs but “when we heard about social enterprise it was a light-bulb moment—we knew this is where we should focus our resources in corporate social investment.” Since 2014, the company has focused strategically on social enterprise in Hong Kong through the MOVE program (marketing social mission, outsourcing business activities, skills-based volunteering, and ethical consumption).
HKBN’s outsourcing of businesses customer service support phone lines to iEnterprise and in-house catering to Hong Kong Joyking Enterprise marked a move from a sponsorship model towards a business-based relationship with social enterprises.
iEnterprise is a work integration social enterprise that provides employment opportunities for people with disabilities. It provides its phone operators very flexible working hours to cater to their unique needs. Unlike the majority of Hong Kong’s social enterprises, iEnterprise is privately owned and does not seek Government subsidy or public donations. Its contract with HKBN to provide telephone customer services enabled iEnterprise to reach breakeven quickly and turn a profit after six months. It benefitted from hidden subsidies provided by HKBN, such as telephone skills training from company volunteers. HKBN is adamant that contracting to a social enterprise has not compromised the quality of customer service.
The positive experience of outsourcing some of its customer helplines encouraged HKBN to move its staff catering requirements to Hong Kong Joyking Enterprise, which employs hearing-impaired, semi-retired and long-term unemployed people. The staff restaurant sources the majority of supplies responsibly and works with HKBN on “ethical consumption.”
HKBN seeks multiple opportunities for supporting social enterprises, either directly through outsourcing and volunteer engagement, or indirectly by promoting the concept of social enterprise among its customers. Rather than send customers who renew their telecom contracts an “incentive gift,” the company distributes coupons that can be redeemed for goods or services of selected social enterprises. This helps raise awareness of the island’s social enterprise sector among the company’s 700,000 customers and 8,000 business partners.
Companies like HKBN and DBS Bank, which remain close to their entrepreneurial roots, have an instinctive affinity with young but ambitious social enterprises. Both companies have gone beyond traditional corporate philanthropy to support individual enterprises and the social enterprise sector, using their resources imaginatively to design products, outsource business functions, influence public perceptions and leverage employee talent to support the social enterprise ecosystem.