Last October 29, 2019, 57 individuals coming from 10 organizations attended Get Lit II, Engaging NGOs in Social Entrepreneurship (SE). The event was held at Commune Café, Poblacion, Makati. The objectives of the event were (1) to capacitate youth-focused NGOs on how to implement social entrepreneurship practices in their organization and (2) to build a network of NGOs with social enterprises. (See part 1 of this article here).
Catherine Scerri, Deputy Director of Bahay Tuluyan, another child-caring NGO in Metro-Manila which has been a pioneer to develop social enterprise programs as soon as 2011 in the Philippine NGO sector shared her insights during Get LIT II. Her presentation focused on the benefits and challenges of running a social enterprise within an NGO.
Among the benefits of Social Enterprise, she highlighted that it allows NGOs to adopt a shift in approach for the beneficiaries, from being dependent in the organization that shelters and supports them to being independent through income they can earn from the social enterprise. When the enterprise becomes profitable, it also allows the NGO to have a pool of unrestricted funding (unlike a Grant agreement that funds a single program or very specific aspects of a program). Therefore, Social Entrepreneuship in NGO serves a dual purpose (independence of the youth and financial sustainability of the organization).
However, these do not come without specific challenges. Because there is no specific law defining the status of social enterprise in the Philippines, the social enterprise is considered as a corporate profitable structure which implies corporate taxes that can be hard to honor if the enterprise is not profitable yet. And it takes time for a social enterprise to become profitable in an NGO. Hiring, training and upskilling staff and implementers is a must. Implementing ancillary services such as housing and education alongside the vocational training is also needed as the employed youth are marginalized and giving them a job is insufficient to integrate them to society. Finally, it is hard to reach profitability when the enterprise employs only marginalized youth on training. These youth are likely to leave the workplace, and the enterprise is continuously employing on-training youth, which makes it difficult to upgrade services and improve efficiency.
For all these reasons, it is important for Filipino social entrepreneurs to establish a strong network, team-up, share good practices and lobby together for the implementation of the legal recognition of Social Enterprise with associated privileges.