Social enterprises at heart of evolving business models

As the world grapples with unprecedented challenges such as economic instability, war, and a pandemic, businesses are increasingly turning their attention towards social responsibility as a means of driving future growth.

And this trend is not just limited to large corporations, but also encompasses small social enterprises such as Colours of a Kind, a Cape Town-based organisation that empowers young women from disadvantaged communities.

Jackie Vorster, the general manager of Colours of a Kind, firmly believes that companies that prioritise social responsibility are better positioned to manage risk, build long-term value and attract socially conscious investors and clients.

She emphasises that to thrive in the future, businesses need to shift towards impact-driven business models that focus on both profit and impact.

Social enterprises are playing a crucial role in driving this trend towards impact-driven business models.

Vorster explains that these enterprises are similar to any other business, except that they promote sustainable development and social welfare by creating jobs for marginalised individuals, providing services to underserved communities, or safeguarding the environment.

Colours of a Kind provides an opportunity for companies to operate in a sustainable community development model as a partner in social business.

The organisation empowers young women in disadvantaged communities by educating them and helping them find employment within the textile and fashion industry.

Their creative studio at WEX in Woodstock, launched at the beginning of 2023, offers a bespoke “cut, make and trim” service that provides customised products and corporate gifts produced by their graduates to business customers. By purchasing goods and services from social enterprises like Colours of a Kind, companies can incorporate social enterprises into their supply chains, driving impact directly and reducing supply chain risks.

A recent survey conducted by Yunus Social Business revealed that over 55% of respondents engage in social procurement to develop new business distribution or innovation models in collaboration with social enterprises, while 60% do so to meet customer demand for socially sourced products and services while also creating brand differentiation.

Companies can also donate towards good community work or provide gifts in kind such as equipment and supplies or even training hours from industry specialists. These options provide a tax-deductible receipt.

Investing in social enterprises like Colours of a Kind has a direct impact on the amount of private capital used for social causes, helping to cover the public shortfall. It also backs market development and motivates other investors to get involved, creating a more enabling environment and greater access to much-needed capital in these tough economic times.

Vorster concludes that social enterprises will be at the heart of impact investing and position themselves as an engine for future market growth. Through their work, Colours of a Kind is helping to create a better and more sustainable future for all.

READ NEXT: 14 KZN SMEs generate over R163m, create 150 jobs