Krzysztof Cibor
28 May 2014

Is it possible to learn social entrepreneurship?

How strong is social economy sector in Croatia, are grants always less viable solutions than loans and how to teach social economy to entrepreneurs - Andreja Rosandić from NESsT, international organization supporting social enterprises answers the questions of Anna Jankowska.

First of all I’d like to ask you about your experiences and your work with social enterprises in Croatia.  What is specific about social enterprises in Croatia? In Poland for example main industries represented by social enterprises are social services, agriculture, food, daycare-centers for children, handcrafts etc. Is it similar in Croatia?

To be honest, you are lucky in Poland, if you know what industries social enterprises cover. In Croatia we don’t have any database on social entrepreneurs existing. Recently, the government launched the “strategy for enabling environment for social entrepreneurship development” which is supposed to tackle with this issue. We do have one organization which is trying to gather all of this information, but basically, at the moment, they have around 40 social enterprises in this database which is not relevant.

We don’t have any law that regulates social enterprises. Actually all the NGOs i.e. associations, foundations, cooperatives can become social entrepreneurs. NESsT supports also the idea of companies being social entrepreneurs. I’m not aware of many examples of that in Croatia, although we do have them. Nevertheless there is no enabling environment for entrepreneur or regular business company to become a social enterprise. From my experience working there for last three years with NESsT, we had social enterprises in tourism industry, as you said - agriculture, we only had one - recently launched - regarding food. We have educational activities, a lot of consulting work by NGOs trainers, handcrafts, especially done by people with disabilities, but also artistic handcrafts sold during the summer season on the coast. And then social enterprises either employ people with disabilities or they help them with other activities. But nobody knows actually how many of them do we have.

And what are the main marginalized groups? Are these mainly disabled people or maybe single mothers?

In most cases these are people with disabilities. We have also marginalized people in sense of not being employed and under the age of 40-50, excluded from the labor market for a longer period of time i.e. longer than 5 or 6 years. So these are the two main groups of beneficiaries or employees of social enterprises. I don’t know any youth at risk organizations, but they do exist.

Social business, social cooperatives become more and more popular among young generation in Poland. It is nowadays regarded as an opportunity to solve the youth employment crisis. Is social entrepreneurship popular among young people in Croatia?

There are more and more social cooperatives. There is law on social cooperatives. I didn’t pay any statistic attention whether they are started by young people. But yes, there are a lot of them and most of them are dealing with food, agriculture production and handcraft.

I believe there are two main criteria which led to development of social entrepreneurship in general. One of them was sustainability of non-profit sector in general. Majority of donors tend to now cover the countries which are in war areas. Majority of these donations became unstable, unsustainable. The organizations had to think differently and then they started first selling some product, then selling some services, because at one point of time it happened that NGOs sector was so much educated and trained from various donors that they were able to provide this type of services into companies. And that’s I think one criteria which started to switch mindsets. The second one was when realizing that this is also a potential to find a job.  And these two main things made it even more trendy, realizing how many people are actually employed within social enterprise sector.

What are your feelings after the first day of workshops provided by NESsT in Poland for budding social entrepreneurs? I mean, what is your perspective on polish future NESst entrepreneurs, do you have any recommendations for them, any observations after the discussion?

Well, any recommendations… I usually did them directly (laugh). In general these are very good ideas, some of them are in a very initial stage, so they will have to think more entrepreneurial rather than NGO. But in general that is usually the case. People tend to think it’s going to be much easier, but then they realize they need a lot of work to put in the development of the business idea and it is not always easy. Majority of them, I would say, are not prepared for the risks associated. If you apply for a grant the risk is: you will get it or not. If you get the grant - you will do the work, if you don’t - you probably won’t or you will decrease the amount of work. But here, if you invest certain amount of money then it is much bigger risk and that is something they will really have to take into consideration… This is also an advice to be aware of that and to be ready to take the risk.

Sometimes you can hear critical voices on donations from people who support loans arguing that people act more responsibly, rationally and more carefully while investing this money. Do you think loans could be more effective? What do you think about this kind of approach?

I believe grants are necessary and they are effective, if we are talking about startup of non-profit organization. For sure granting for starting a business for non-profits who are dealing with the social problems and this longer term approach to help them is much more convenient for them. Later on, in the later stages, I agree, investment In the way of loans might be more appropriate to teach them to become a real entrepreneur. It is not realistic that as an entrepreneur you will get granting for 10-15 years, but at this initial stage I believe grant is more appropriate and helps them to reach the faze where they will be investment-ready for the loan or other kind of financial support.

We heard today from one of workshop participants: “I don’t consider myself to be a very enterprising person with very strong management skills. How should I learn it during this two-day workshop?!” Do you think everybody can become an entrepreneur?

On one hand, being entrepreneur includes also recognizing a good team member. Some tasks you can lean on other persons it will be done. To manage the team is something totally different. Many people, when they switch to this entrepreneurial part, they are just lost. But on the other hand - yes, it can be learned, there are various courses where you can literally learn, how to deal with other people, how to divide tasks. So it can be learned, but it is also very important to know who your team members are. To be aware of the strengths, of weaknesses, and be aware that if you don’t have something, maybe some other team member has. That also means being a good leader, recognizing the strengths of other people and incorporating those into your business idea. So entrepreneurial thinking also means to recognize the abilities of others and to include them.

Is there any crucial feature necessary to become a successful social entrepreneur? E.g. strong leadership, building a good team, management skills? Some people say: “It’s all about passion”. Or is it maybe a combination of various elements?

I would say, passion really combines everything, because you really need to have passion to be persistent finalizing the task. I wouldn’t say that some elements are more important comparing to others. All of these areas that you mentioned are quite important so you will have to learn to a good manager, to be a good leader, fundraiser as well or have a good team. Combination of everything is important for the success. You really have to believe in what you are saying, so first you recognize the need and transfer it to kind of possibilities. Then you are passionate about it, you believe it is possible, but then you definitely must learn some of the skills. I agree, it’s not only the passion, but it’s very important.

Interview by Anna Jankowska

Andreja Rosandić is the regional Sustainability Manager, responsible for financial sustainability of the CEE region. Until 2013 she held the position of Enterprise Development Manager and was responsible for overseeing and managing planning, implementation, and evaluation of NESsT’s Portfolio in Croatia.