Tuesday, June 3, 2014

State of Social Enterprise in Singapore

I went for a talk on ACSEP Social Entrepreneurship (SE) Series: Landscape of Social Enterprises in Singapore by Asia Centre for Social Entrepreneurship and Philanthropy (ACSEP)

There was some insight on the state of social enterpreneurship in Singapore.

The seminar will address current issues surrounding social enterprise, focusing on: —

  • Core principles underpinning a social enterprise — 
  • Public perception of the social enterprise model — 
  • Challenges and opportunities facing the sector

With some comparisons with the UK, South Korea, the SE in Singapore does not seem to do as well as other developed countries.

There was some talk about the ambiguity of definition of Social Enterprises, and how some organizations identified themselves as social enterprises but there were only about 150-300 SEs in Singapore compared to 1000+ in South Korea where the government started the SE initiatives later but seems to have more SEs in the country.

There was a little focus to talk about how NTUC is one of the largest social enterprise, but during the Q&A, many people questioned why NTUC is considered a social enterprise.

There seems to be very little support from the government on social entrepreneurship. Back in 2008, there was a lot of talk on Social Entrepreneurship, much funding and training provided. However, even with NTUC and various other companies like Grab Taxi identifying themselves as Social Enterprises, there is 150-300 of them in Singapore?

Many questioned on why NTUC is considered a social enterprises and the response was "NTUC is a cooperative which gives a % back to the members"

I asked if Unilevel and SAP, companies who partnered Grameen Creative Labs on several social initiatives for social impact can be considered social enterprises, the reply was they only donated a small % of their profits as CSR.

Then a model was shared and according to the Social Enterprise Association in Singapore, an organization that gives 10% of the profits to a social cause can be considered a social enterprise. So can Marina Bay Sands or Resorts World Sentosa be considered a social enterprises if they donated 10% of their earnings to Gamblers Annoymous?

Currently, there is no legal structure for a social enterprise in Singapore. An organisation can choose to either be registered as a charity (in which case it forgoes doing business) or be registered as a full commercial company (where the profits can, but need not, go to charity). In UK, there is the CIC organizations, in the US, a L3C, and in South Korea, a Social Enterprise enjoys different tax structures and funding. Nothing here in Singapore.

With NTUC labeled as a social enterprise, I feel that it opens the door for all sorts of companies to be considered social enterprises. I have heard about some social enterprises hiring ex-convicts, handicapped people and the elderly, getting a tax break and underpaying the people they hire, and yet still considered social enterprises.

I disagreed with several NUS business school professors who say that it is important for a company to do well before doing good, and a social entrepreneur has to juggle with decisions whether to make less profits or to exploit the employees.

When profits is the primary focus of a company, I feel that that company should not be called a social enterprise. Some of these companies are merely companies with a CSR program. Giving 10% of your profits to say that you are doing social good is not bad, but it does not make you a social enterprise.

A social enterprise should not pay a handicapped person or a marginalized person less, just because they can, and still call themselves a social enterprise. Sometimes, that is the only reason these companies can be considered social enterprises in the first place, and using the faces of these marginalized people for marketing purpose is definitely worth not exploiting them. They are the marketing material.

There is much to progress as a nation and I hope people do not do things for the sake of doing. But first, stop white washing your company's name. NTUC by itself is a good brand without being a social enterprise. Perhaps you can be more competitive in your pricing and pay more decent wages for better service.

-- Robin Low


  1. Thanks for your article. I agree with many of your points. My wife and I run a web portal (stuffwithadifference.com) which features social enterprises, mostly in Singapore. Don't mind two quick comments:

    (1) I have a relative who works in FairPrice. A little known fact is that FairPrice actually spends more than 95% of the profits on nation wide social causes (and not just for members), so in that sense, yes I think it can be considered a social enterprise.

    (2) I actually disagree with Social Enterprise Association's view that any company contributing more than 10% of their profits to a social cause can be considered a social enterprise. That's wrong and dangerous as you have pointed out.

    In running our website, my wife and I have had several businesses approaching us wanting to be listed on our website as a social enterprise. We turn down some of them as we don't view them as social enterprises.

    In our view, a social enterprise has to have the social cause as the main reason for existence of the business. The business side is merely a means to support the social cause in a more sustainable way, rather than asking for donations like a charity would (that's why for SEs, social comes before enterprise). And profit-driven business have the primary goal of making money, and if they happen to contribute a small percentage of their resources to a social cause, that would be called Corporate Social Responsibility (CSR) initiatives. So it's important to distinguish the continuum from Charities (donations and fund-raising model for social causes); to Social Enterprises (supporting social causes through a sustainable business model; to Profit-Driven Businesses (with a CSR programme or not).

    A social enterprise can have several ways of wanting to impact their social cause - it could be through direct employment of disadvantaged groups of people to run the business, or it could be contributing majority of their profits (after expenses etc) to the social cause at heart. Secondly, partial profits can be retained to reinvest to grow the business in order to have a great social impact for the selected social cause. And lastly, investors can also get a small return on their investment if there is excess profits after the first two criteria are met.

    1. Hi Pyk,

      I think spending more than xx% of the profits on nation wide social causes does not make it a social enterprise.

      Monsanto can give away 96% of profits to Monsanto Foundation, and it does not make it any better.

      I agree with you that, a social enterprise has to have the social cause as the main reason for existence of the business.

      I also think that the social cause also needs to have social impact. There are lots of initiatives to employ disadvantage groups of people because there are subsidies or these people can be paid less. Many are setup for the sake of "doing" something, rather than fixing a problem.

      I am not saying that they are less important or a waste of time, but I feel that social enterprises should be focused on preventing homelessness, rather than giving clothes to the homeless for example. Attacking the problem at the core and running a sustainable business.

      If there is real social impact, I don not really care about profit ploughback or any excess profits. If a program can end poverty, and the founder makes millions, and is sustainable, it solves a problem at the root and it is sustainable, so it has far more impact than someone making little money and putting profits to a social cause.