Bessi Graham: Social enterprise is not a silver bullet for NFPs

Gali Blacher May 19, 2016

3 min read

Bessi Graham’s passion for impact investing and social enterprises is the driving force behind The Difference Incubator (TDi).

Graham believes that doing good while making money is possible and aims to encourage social enterprises to do just that.

With a career in impact investing and a want to do good in the world, Graham put her two passions together to lead the social incubator.

Third Sector spoke to the CEO to find out more about TDi and the good and bad sides of social enterprises.

TS: How and why did you become involved in TDi?

BG: I have been involved from the beginning. Around 16 years ago I worked for an ethical investment advisory company in Sydney and they were the advisors for donkey wheel. I had time off to be home with kids and wanted to get stuck into a bigger and meatier project. I met up with one of the trustees at the donkey wheel foundation and I spoke to her about my training in capacity building programs. She said they had just hired a new CEO and she introduced me to their CEO (Paul Steel). We hit it off and shortly after that we both co-founded TDi.

TS: Your first pilot was ‘Two Feet’ … could you explain more?

BG: Two Feet was the first pilot project that we ran but over time it has morphed into an accelerator program. It goes for six months and it is done in a cohort and in those six months we cover all the things you need to know to build a suitable business and to be able to build investment. We found there was a need for a earlier stage program. Two Feet is helping to build awareness and understanding in new organisations.

TS: What do you want to see from social enterprises?

BG: The angle for us wanting to [assist in this space is to see organisations moving away from grant reliance and towards more sustainable business models]. There are so many NFPs in the charitable space that are relying on a shrinking pool of money from government funding and philanthropic causes. What we want to see is an attempt for social enterprises to explore angles that they could commercialise and start to develop an organisation that at its heart is the social mission. It is about the business creating that great thing for the world but doing that through a commercial model that can work towards sustainability.

TS: What makes a bad social enterprise?

BG: I think there can be unhelpful social enterprise models. In many aspects one of the most unhelpful things that can happen under the umbrella term social enterprise is to just focus on what is done with profit. The focus on profit is limiting and unhelpful. If you think the only way you can do good is with your profit, then you aren’t making a bigger enough impact on the world. I want to see an organisation that has an integrated business model. We want to see a social enterprise – that even if it just broke even – still has a positive impact on the world. The most unhelpful thing we see in social enterprises is when they obsess about the profit.

It is hard enough to run a business let alone a social enterprise- where you are trying to have an environmental impact as well as run a sustainable business. If the NFP sector thinks there is this silver bullet coming in and magically generating all this excess income- that is setting up an unrealistic expectation.

TS: What is the biggest success story you have seen through the programs that you run?

BG: The honest answer is we are still in an early stage in this market in Australia. What we don’t yet have are decades of track records. My sense of where the market is at is that in the next 12-18 months we are going to start seeing a shift and see more and more examples of investable social enterprises. Social enterprises that show success are those that tackle problems from a different angle. There are a number of groups that are looking at things with a new perspective. Those are the types of organisations we would like to support.

TS: What are your hopes for the future of TdI?

BG: Our ultimate goal is to prove that you can do good and make money. I think the next few years are going to see a really positive shift for [social enterprises].

Gali Blacher

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