Sustainable and Transparent Business

COMMON GOOD Sustainable and Transparent Business Common Good – Sustainable and Transparent Business COMMON GOOD 1st edition Place of publication: Saarijärven Oﬀ set Oy, Saarijärvi 2014 Sustainable and Transparent Business Publisher: Karelia University of Applied Sciences

Publication series : B:18 ISBN: 978-952-275-109-6 (printed) ISBN: 978-952-275-110-2 (online publication) ISSN-L 2323-6876 ISSN 2323-6876

Editor responsible for publication series: Kari Tiainen Authors: Ilari Havukainen, Ville Kuittinen, Mikko Matveinen, Merja Mononen, Jarkko Peiponen, and Saila Tykkyläinen Photos: Jussi Ratilainen Graphic design and lay-out: Mikko Matveinen, Anna-Maija Kontturi, and Ville Kuittinen www.karelia.ﬁ

Reproduction of this publication without express permission, either in whole or in part, is prohibited by Copy- right Law. CONTENTSCOMMON GOOD THROUGH ENTREPRENEURSHIP—1 CATERING SERVICE KYLÄN KATTAUS - TURNING LEFTOVERS INTO A SOCIAL INNOVATION 68 CHANGING NEEDS OPEN NEW DOORS FOR ENTREPRENEURIAL ACTIVITIES 74 FOREWORD 8 KANRESTA - AN ETHICAL CATERING SUCCESS STORY 76 INTRODUCTION 10 HAND-MADE PRODUCTS ARE VALUED IN FINLAND 80 SOCIAL ENTERPRENEURSHIP IN FINLAND 12 TAITO MYYMÄLÄT - FINNISH HANDICRAFTS AND SOCIAL IMPACT 82 ROOTS OF SOCIAL ENTREPRENEURSHIP 13 CUSTOMER-ORIENTATION AND INDIVIDUALITY AS A COMPETITIVE METHOD FOR CAPTURING THE IDEA 13 SOCIAL ENTERPRISES 88 SOCIAL OBJECTIVES AND LIMITED DISTRIBUTION OF PROFITS 14 FOCUS ON THE CUSTOMER 89 TRANSPARENCY AND DEMONSTRATING IMPACTS 15 STANDING OUT ON THE MARKETS 90 HOW SOCIAL ENTREPRENEURSHIP IS DISTINCTIVE 17 OPPORTUNITIES OF INTERNATIONALIZATION 91 THE CHILDREN’S DAY FOUNDATION - FINLAND’S BEST-KNOWN MIFUKO - FINNISH DESIGN FROM KENYA 92 SOCIAL ENTERPRISE? 18 SHOW YOUR SOCIAL ENTERPRISE’S COMPETITIVE ADVANTAGE! 98 PLANNING OF SOCIAL ENTREPRENEURSHIP OPERATIONS 26 WHO CARES ABOUT THE SOCIAL ENTERPRISE MARK? 99 SOLVING SOCIAL PROBLEMS 27 HOW DO YOU GET A SOCIAL ENTERPRISE MARK? 100 SOCIAL OUTLOOK OF THE ENTERPRISE 28 SYY AKATEMIA - MORE SOCIAL ENTREPRENEURSHIP 102 DOUBLE BOTTOM LINE 28 SOCIAL ENTERPRISE NETWORKS 106 VALUES 29 ADVICE SERVICES FOR SOCIAL ENTERPRISES 107 OBJECTIVES OF THE ENTERPRISE 29 SUPPORT THROUGH NETWORKING 110 TEAM PLANET - BUSINESS ON CHILDREN’S TERMS 30 MINISTRIES AND SITRA INVOLVED IN DETERMINING SOCIAL ENTERPRISES 111 DEMONSTRATING SOCIAL IMPACTS 36 RESEARCH AND DEVELOPMENT WORK THROUGH PUBLIC FUNDING 112 IMPACT HOUSE - DEMONSTRATING SOCIAL IMPACTS 38 WHERE CAN A SOCIAL ENTERPRISE OBTAIN FUNDING? 115 SOCIAL ENTERPRISE MARKET 42 A SOCIAL ENTREPRENERUSHIP GLOSSARY 116 PUBLIC PROCUREMENTS AND SOCIAL IMPACTS 43 SOCIAL ENTERPRISES IN COOPERATION WITH THE PUBLIC SECTOR 45 FURTHER INFORMATION 118 S-ASUNNOT - ”WE WELCOME EVERYONE” 46 SOURCES 122 MORE SOCIAL HOUSING IN FUTURE 51 SOCIAL RENEWABLE ENERGY 52 LUMITUULI - FINLAND’S FIRST CUSTOMER-OWNED WIND POWER COMPANY 54 ENO ENERGY COOPERATIVE - SOCIALLY-ORIENTED LOCAL ENERGY PRODUCTION 60 THE PUBLIC SECTOR NEEDS SERVICE INNOVATIONS 66 FOREWORD

Dear social entrepreneur, Sustainable development has been the subject of widespread debate for many years, but the journey has Social enterprises are a strong motivator for many just begun, with the fi rst steps only now being taken in employees and entrepreneurs, as Finns are becoming many sectors. The articles in this book will help both increasingly interested in business transparency existing and aspiring entrepreneurs to better fi nd their and the ability to do good. At Diacor, which is one of way on this journey. Finland’s largest social enterprises, this is refl ected in increased wellbeing and a genuine wish on the part of Social entrepreneurship is a valuable business model. the staff to remain committed to their work. We warmly welcome you to join us!

Despite their strongly positive values, social Anni Vepsäläinen enterprises have no special privilege or right to deviate from the norms of Finnish society. I want to underline Managing Director, Diacor terveyspalvelut Oy the ‘doing the right thing’ culture, which means emphasizing fairness and abidance with ethically sustainable principles. Well-managed and proﬁ table business is at the core of corporate responsibility.

Common Good through Entrepreneurship is an important book, and the international Common Power network established by the Karelia University of Applied Sciences has had an important role in its creation. Although the core competence of the network is in community-owned renewable energy production solutions, the book also serves as a comprehensive guide to Finnish social entrepreneurship.

8 9 INTRODUCTION

This publication is aimed at encouraging and We hope that the publication will increase the readers’ promoting new ideas. It introduces social knowledge of social enterprises in Finland. Perhaps entrepreneurship and business. We look at the past it will give them a comprehensive picture of the and present, and provide practical examples of social operating ﬁ eld and interest groups of social enterprises enterprises. The publication is written for those who or help them to better understand the requirements are thinking about starting a social enterprise, and for establishing a successful social enterprise and the for business consultants who interact with social creation of a competitive edge. Furthermore, we hope entrepreneurs in their work. that reading the book will increase readers’ interest in becoming social entrepreneurs. In many ways, establishing a social enterprise is no different from setting up any other business. Various We want to thank all the companies and entrepreneurs guides on starting a business are already widely whose stories are included in this publication. These available, and we have tried to avoid covering the same companies are a ﬁ ne example of the true social areas. At the end of the book we have listed various good that can be achieved through sustainable and kinds of guides, links, and concepts relating to social transparent business operations. These entrepreneurs entrepreneurship. and people they employ can be truly proud of the results they have achieved in promoting the common We have aimed at illustrating the diversity of social good. During preparation of this publication, it was enterprises’ operations in Finland through case easy to be motivated by the success of the people studies. We introduce enterprises and entrepreneurs behind the case studies, as they care so deeply about who are making an effort to tackle various problems the important goals they pursue. of society. We take a close look at the values, business operations, and social objectives of existing social Joensuu, 28 March 2014 enterprises and explain transparency, demonstrating impact, and the manifestations of the two in practice. The authors

10 11 TTHEHE IDEAIDEA OFOF SOCIALSOCIAL ENTERPRENEURSHIPENTERPRENEURSHIP ISIS RELATIVELYRELATIVELY NEWNEW SOCIAL ENTERPRENEURSHIP TTOO FFINLAND.INLAND. NNEVERTHELESS,EVERTHELESS, SSOCIALOCIAL EENTERPRISESNTERPRISES HHAVEAVE LLONGONG EEXISTEDXISTED HHERE.ERE. A FORMFORM OFOF VVALUE-ORIENTEDALUE-ORIENTED EENTREPRENEURSHIP,NTREPRENEURSHIP, IN FINLAND SSOCIALOCIAL EENTERPRENEURSNTERPRENEURS AAIMIM TTOO ACHIEVEACHIEVE SOCIALSOCIAL IIMPACTS.MPACTS. TTHISHIS CCHAPTERHAPTER PROVIDESPROVIDES ANAN OVERVIEWOVERVIEW OFOF THETHE HISTORYHISTORY OFOF SOCIALSOCIAL EENTERPRENEURSHIP,NTERPRENEURSHIP, ANDAND ENDSENDS WITHWITH ANAN INTRODUCTIONINTRODUCTION TOTO OONENE OOFF FFINLAND’SINLAND’S BBEST-KNOWNEST-KNOWN SSOCIALOCIAL EENTERPRISES.NTERPRISES.

Roots of social Anecdotal evidence would suggest that,there are thousands of social enterprises in Finland. A survey entrepreneurship conducted by the Finnish Institute in London has revealed that up to 12,000 Finnish small- or medium- The most famous example of this global concept sized companies meet the criteria set for social is Grameen Bank, which was established by the enterprises. Finnish social enterprises are most Bangladeshi banker Muhammad Yunus, as the world’s usually cooperatives or limited companies, but other fi rst fi nancing institution to offer microloans. In forms are also represented. The Association for Finnish Europe, the roots of social entrepreneurship date back Work, which is known for its Finnish Key Flag symbol to the early 1980s, when the fi rst companies managing granted to products as a guarantee of the authenticity special social tasks were founded in Italy and Britain. of their Finnish origin, began granting a special mark to social enterprises in late 2011. At the time of writing, In Finland, social entrepreneurship was introduced the Finnish Social Enterprise mark has already been in the early 1990s through work integration social granted to 43 companies. enterprises. Social enterprises have received wider publicity in the 2010s, e.g. in the European Union. Social entrepreneurship is currently experiencing a Capturing the idea period of strong growth and change in Europe. Social enterprise is still a relatively unfamiliar concept The European Commission has recognized the role of for many Finns. Social entrepreneurship is based on a social entrepreneurship as part of the social economy corporate value base that is refl ected in the company’s and in economic development. The exact number of operations, and also in its regulations and articles of social enterprises is not known, but some estimates association. Social enterprises tackle social problems suggest that there are over two million within the EU. through their operations, and channel most of their With an estimated 11 million people working in the profi t into promoting their social objectives. Their social economy sector in Europe, these enterprises operations must be responsible, sustainable, and have a signifi cant labour market impact. transparent. These concepts are defi ned in more detail in the next Chapter.

12 13 The business model of social enterprises can be draw a dividing line between social enterprises and In social entrepreneurship, there are several different Some social enterprises openly state the cost- based on a wide range of starting points. They can other companies, but to introduce the types of social approaches to profi ts. To ensure longevity, long-term structure of each product or service and how much be non-profi t organizations, in which case operating entrepreneurship. operations must be profi table. On the other hand, the manufacturer has been paid for it. The origin profi t is re-invested in developing the operations of since social enterprises produce social good in their and conditions in which the product was made are the enterprises that generate the social impacts. A processes and with their end products, the amount also important. A good example of transparency social enterprise may also seek the highest possible Social objectives and limited of profi ts is of less importance than for conventional, is a product-specifi c story that gives the customer profi t, which is used fully or partly to advance its primarily profi t-driven businesses. However, all information of the product. social mission. The pursuit of profi t and the desire distribution of profi ts sustainable business operations must be fi nancially to solve social problems can be equally important to self-sustaining in order to remain in operation in the A fourth distinctive feature is demonstrable benefi cial the company, in which case it will follow its stated The operational objectives of social enterprises long run. social impact. Various methods have been developed social values in all its operations. In other cases, part are strongly linked to tackling social challenges or for demonstrating social impact, the most popular of the operations may focus on maximization of problems. The primary purpose of a social enterprise indicators including social accounting and the SROI profi ts, and part on producing social good. The case can be, for example, to improve the quality of life Transparency and method, which is introduced on page 37. studies presented in this publication show that the of a community or a certain category of people. A business models of social enterprises are very varied, social enterprise aims to produce social good and to demonstrating impacts When an organization applies for the Finnish Social and that each of them creates social good in their own yield profi ts. The latter is important, as it helps the Enterprise mark, the Association for Finnish Work individual way. enterprise develop its operations and work for society. A third characteristic of social entrepreneurship pays attention to these aforementioned characteristics is openness and transparency of operations. The of social enterprises. In addition, other features In Finland, the criteria for social enterprises were fi rst Social objectives form the basis for the existence enterprise’s operations must be open to outside typical of social enterprises will be considered, such set out in 2011 by the Ministry of Employment and and business operations of social enterprises. Social scrutiny, and must stand up to ethical inspection. as the communality of the enterprise or providing the Economy’s committee on social entrepreneurship. problems can be divided into local, minority and Moreover, the stated benefi cial social impacts must be employment for those who might otherwise fi nd it The fi nal report of the committee addressed the need group related, environmental, and developing country capable of being demonstrated. diffi cult to get work. to develop a business model for social enterprises in problems. Finland. Consequently, the Association for Finnish Transparency does not mean that the enterprise Work launched a Finnish Social Enterprise mark, Social good is not just what the enterprise produces cannot have business secrets used for generating which can be granted to companies that meet certain for private customers, but also the good it produces for social good. criteria. We tell the story behind the mark later in this secondary customers, be they the entire population, publication. future generations, or the environment. The social The Association for Finnish Work interprets good can be generated through the enterprise’s end transparency as being strongly linked with the fi rst two Social enterprises are not mentioned in Finnish products or services, through its investments, in its features of a social enterprise: a social objective and legislation. Only the position of social enterprises production process, or based on its distribution of limited distribution of profi ts. Social enterprises must is defi ned by law. Therefore, no offi cial company profi ts. specify in their corporate rules, their social objectives type exists for social enterprises in Finland. Social and the rationale behind profi t distribution. This enterprises do not receive special support for their One of the special characteristics of social enterprises increases the transparency of operations and ensures operations. In Finland, social enterprises are not is limited distribution of profi ts, meaning that half of that clients and partners are aware of the company’s entitled to subsidies or tax relief; and instead their all profi t made is channelled into advancing a specifi c aims. whole income is based on business operations. In this social objective. Profi ts can be used to develop the sense, social enterprises operate just like any other enterprise’s own operations, or can be donated in Transparency can be refl ected in all operations of company. The purpose of this publication is not to accordance with its operating principles. the enterprise, or can be taken to a product level.

14 15 How social entrepreneurship Social entrepreneurship is not the same as charity. The is distinctive purpose is to produce services or products for paying customers. Operations must also be profi table in the Social entrepreneurship is not a synonym for long run. The same business principles can be applied corporate social responsibility. Of course it is vital to social enterprises as to any other enterprises. Social to consider social responsibility and sustainability enterprises must work to increase their business in the operations of a social enterprise. Companies income to avoid weakening their profi tability and the that report on their social responsibility are not conditions for continued viability. necessarily social enterprises, as they may not meet the other criteria set for social enterprises, i.e. limited distribution of profi ts, openness and transparency, and having clear social objectives.

Although cooperative activities are strongly linked to social entrepreneurship through the concept of the social economy, not all cooperatives are social enterprises. However, the latter can operate as cooperatives. For example large consumer cooperatives that operate locally and play a signifi cant role in the development of the local economy are not social enterprises, because their distribution of profi ts is not restricted, and they have no defi ned social objectives.

A social enterprise can obtain non-profi t status. However, not all social enterprises are automatically non-profi t organizations, since their operations are not necessarily non-profi t or open to all. The reverse is also true: not all non-profi t organizations are automatically social enterprises, as in many cases their activities are not commercial in nature.

16 17 FINLAND’S BEST-KNOWN GGENERATIONSENERATIONS OOFF FFINNSINNS HHAVEAVE PPROBABLYROBABLY VISITEDVISITED LINNANMÄKILINNANMÄKI SOCIAL ENTERPRISE? AAMUSEMENTMUSEMENT PARK.PARK. THISTHIS POPULARPOPULAR SUMMERSUMMER DESTINATIONDESTINATION IINN TTHEHE

CASE CCENTREENTRE OOFF HHELSINKIELSINKI HHASAS BBEENEEN RRUNNINGUNNING FFOROR OOVERVER 6600 YYEARS.EARS. WWHATHAT IISS NNOTOT WWIDELYIDELY KKNOWNNOWN IISS TTHATHAT TTHEHE CCHILDREN’SHILDREN’S DDAYAY FFOUNDATION,OUNDATION, WWHICHHICH OOWNSWNS TTHEHE PPARK,ARK, IISS OONENE OOFF TTHEHE MMAINAIN CCONTRIBUTORSONTRIBUTORS TTOO CCHILDHILD PPROTECTIONROTECTION WWORKORK IINN FFINLAND,INLAND, AANDND IISS AANN EEXCELLENTXCELLENT EEXAMPLEXAMPLE OOFF A SSOCIALOCIAL EENTERPRISE.NTERPRISE.

History Operational aims

The story of the Child Protection Foundation dates The goal of the Children’s Day Foundation’s operations back to the early 1900s, when events for children is to raise funds for child protection work through were organized in Helsinki every spring. The aim was Linnanmäki Amusement Park. During its history, to raise funds for child protection work, and events Linnanmäki has raised over 90 million euros for this included juggling, magic tricks, and basic merry-go- purpose. Since the year 2000, the total annual volume rounds. These were extremely popular in their time. of funding granted has doubled. Every year, the Children’s Day Foundation has been able to increase In the post-war years, Vesilinnanmäki in the Alppila the volume of funding, and in recent years around four suburb of Helsinki was chosen as the location for million euros has been donated annually for helping the event. In 1950, an amusement park was founded children at risk. This has been facilitated by taking there, and was jointly managed by the Central Union Linnanmäki in an increasingly business-oriented for Child Welfare, Barnavårdsföreningen I Finland, the direction. Federation of Mother and Child Homes and Shelters, the Mannerheim League for Child Welfare, Parasta Lapsille ry, and Save the Children Finland. Applying the principles of The profi ts from Linnanmäki amusement park were social entrepreneurship to based on oral contracts divided between the operators and at fi rst the rationale behind the distribution foundation activities of funds was unclear. A consultant survey was administered to streamline operations, and based For the fi rst 50 years, the Children’s Day Foundation on its fi nal report the Children’s Day Foundation was was managed as an association, and the results founded in 1957. Written rules were prepared for the were excellent. The Foundation was involved in Foundation, outlining responsibilities and liabilities, the founding of other Finnish amusements parks, distribution of profi ts and losses, and the organization including Särkänniemi in Tampere and Tykkimäki of administration. The rules have been updated as in Kouvola. It had operations in Rocca Al Mare necessary over the years. Amusement Park in Tallinn, Kalajoki in Northern Ostrobothnia, and Santa Claus Village in Rovaniemi.

18 19 By the turn of the millennium, under Managing The values typical of social enterprises, i.e. Director Risto Räikkönen, the Foundation’s transparency and limited distribution of funds, are management style has continued to develop central to Linnanmäki’s operations. Transparency towards business management. Räikkönen, who means that the Foundation’s fi nancial statement had previously worked in the export industry and and annual report are public in full. In addition, adopted the principles of social entrepreneurship at associations involved in the Foundation’s the Helsinki Deaconess Institute, has had a vital role administration can monitor its operations and in strengthening the Foundation’s fi nancial position. results at all times. From the employee perspective, When he began as managing director of Linnanmäki transparency is refl ected in monthly meetings, where and the Children’s Day Foundation, Räikkönen matters concerning the Foundation are discussed remained committed to his view that hard-headed openly. business and softer social objectives can work well together, and even complement each other. The limited distribution of funds is organized so that around half of annual business profi t is reserved for Business thinking is now refl ected in all of the investments. The other half goes directly to child Foundation’s core operations, and supporting child protection work. Investments made in the equipment protection work is the foremost aim in the minds of and renovations of the amusement park are central the Foundation’s management. The only business to ensuring that the Foundation can continue to raise activity specifi ed in the foundation’s strategy funds for child protection work in the future. Concrete is focusing on its core expertise, i.e. managing examples of this development work include new Linnanmäki Amusement Park. All other activities amusement park equipment and the renovation of the have been rescinded in recent years. Focusing on rollercoaster, which dates back to 1951. one amusement park only has paid off, and the Foundation’s fi nances are now in good shape. This secures the continuation of operations and increases Impact through ownership in the funding directed annually to child protection work. The operating profi ts of Linnanmäki Amusement Park are divided between the owners of the Children’s Day Foundation. Of these, e.g. the Federation of Mother Social values and Child Homes and Shelters uses its annual share to help over four thousand vulnerable children and According to Children’s Day Foundation managing their families. More specifi cally, the funding is used director Risto Räikkönen, commitment plays an to organize family rehabilitation courses at the important role in Linnanmäki’s value base. Linnanmäki association’s own course centre Sopukka, and to will continue to help vulnerable children, which makes support peer group activities. working for the enterprise meaningful. The enterprise’s values are refl ected in everyday activities, e.g. through The family rehabilitation courses are aimed at families goal-setting and supervision. The main objective is with small babies, who have problems relating to to raise funds for child protection work, and staff are drug or alcohol usage, mental health, or violence. The genuinely pleased when this end is met. courses provide opportunities for peer support and

20 21 professional help. These activities support the families disposable tableware only. Measures to reduce the and help them to cope with parenthood in everyday amount of waste have also been taken. Although life, whilst facilitating the safe development of the ecological materials are more expensive, Linnanmäki baby at home. ﬁ nds the price worth paying.

Sustainable development Work in a multi-cultural and recycling environment

Linnanmäki is the market leader and trendsetter in Linnanmäki is an important employer in the Helsinki adventure business and wants to set an example for Metropolitan Area. In addition to the permanent staff, others. Values that are important for Linnanmäki the park employs around six hundred temporary include sustainable development ecology. employees each year. Most of these temporary Linnanmäki’s administration believes that the time employees are young, and Linnanmäki is their fi rst of conspicuous consumption and negligence of workplace. Training and orientation are important at environmental issues has passed, and the organization the beginning of one’s employment. Orientation to is dedicated to becoming a pioneer in these areas. the work tasks and rules of working life are carried out with care, and the training is provided as part of Environmental values are visible throughout the paid working time. One of Linnanmäki’s social tasks park’s activities, for instance in favouring renewable is to orientate young recruits to working life as well as energy sources. Equipment is operated by hydropower possible. and Linnanmäki also produces wind power on a small scale. Using a lot of energy, the amusement The enterprise’s social responsibility also extends to park participates in the energy saving programme employment. In a fast-changing multicultural world, of the Ministry of Employment and the Economy, Linnanmäki is a good example of successful efforts the participants of which are committed to reducing at welcoming people from different backgrounds into their energy consumption. Consequently, low the working community. Linnanmäki wants to provide energy consumption is a major consideration in the work to all kinds of people including immigrants and acquisition of new equipment. Other concrete energy long-term unemployed and socially excluded persons. saving measures include switching to low-energy LED Staff members with an immigrant background are lighting and replacing direct electric heating with considered a strength, and including members of all district heating. immigrant groups in the amusement park’s staff is considered important for the customer experience. Other examples of energy-friendly measures being The same applies to language profi ciency, and fl uency taken at Linnanmäki are the restaurants in the in Russian and Swedish are sought after skills in an amusement park area, which use biodegradable employee.

22 23 Development, a constant Helsinki Metropolitan area. These all exert a strong challenge pull on people’s limited amounts of free time.

A business-oriented social enterprise must be ever Linnanmäki’s answer to the constantly changing ready to make changes and reforms. At Linnanmäki, competition situation is strategic planning. It uses customer orientation is reﬂ ected in its constant an annual cycle, which forms the basis for its development. The services and equipment of the annual strategy which is prepared by the executive amusement park are continuously being developed to management in the spring, and approved by the keep its customers’ interests alive. Foundation’s management in the autumn. The next spring, the preparation of a new strategy begins Developing new service models is also a vital part of again; and so the cycle continues. Over ten years of Linnanmäki’s business operation. In recent years, the systematic work has enabled Linnanmäki to establish theme has been increasing year-round operations a clear picture of the direction in which the operations through the Peacock theatre and Sealife Helsinki, both should be developed. of which are also open during the winter season.

The amusement park aims to develop an increasingly Future wider customer base. In addition to providing entertainment for children, the needs of pensioners In the future, Linnanmäki will continue to provide in particular are considered important. One effort an increasing number of year-round services in a to this end has been the establishment of gourmet central location in Helsinki. The aim is to extend the restaurants in the amusement park area. The amusement park so that in the future, equipment will development of conference services for companies has be located on two or even three levels. On the current enterprises are such a big thing that few have realized also opened new business operation opportunities, and site, extending upwards or downwards are the only it as yet. But we will all see it in ten or fi fteen years. The Children’s Day Foundation has increased year-round use of the area. options, as its location in the middle of a city restricts That’s why we want to be part of this fi rst wave as Helsinki construction at ground level. Multi-level construction pioneers, setting an example to others of how society has already started, and as an example, staff premises can and should be developed.” Founded in 1957 are located underground. Strategic planning Industry: amusement and theme park Social entrepreneurship is refl ected in all segments operations Every well-managed enterprise must be familiar with The aforementioned continuous development of of Linnanmäki’s operations. Few social enterprises in the current competition situation, and must aim to service operations and increased year-round provision Finland can demonstrate such clear social impacts as Turnover: 25 million euros adapt to changes. In the course of its fi rst 60 years, the of services are a vital part of Linnanmäki’s future Linnanmäki and the Children’s Day Foundation have www.linnanmaki.fi competition situation for Linnanmäki Amusement strategy. Internationality and an increased number of done during the park’s 60-year history. Profi ts directed Park has undergone much change. In the 1950s, Russian tourists in particular are already refl ected in towards child protection work have an important role competition for customers was not as intense as it is Linnanmäki’s operations, and their signifi cance will in helping vulnerable Finnish children. The Children’s now, as movie theatres were the only real competitors. continue to grow in future. Day Foundation provides an excellent example of Linnanmäki’s greatest competitors these days are not social entrepreneurship being used for the good of other amusement parks, but sports events, shopping The future of the social enterprise looks encouraging. society. centres, and various public events organized in the To quote managing director Risto Räikkönen: “Social

24 25 WE MET DOZENS OF SOCIAL ENTREPRENEURS WHILST WRITING THIS PLANNING OF SOCIAL BOOK. WHEN WE TALKED WITH THEM, WE COULD SEE A CERTAIN FIRE IN THEIR EYES: ENTREPRENEURS WHO HAVE ADOPTED OR CREATED ENTREPRENEURSHIP THE STRONG VALUE BASE OF THEIR ENTERPRISE ARE SERIOUS ABOUT THEIR MISSION, AND WANT TO SHARE IT WITH OTHERS. THEY WANT OPERATIONS TO SHOW HOW THEIR ENTERPRISE PRODUCES SOCIAL BENEFITS.

Very often the motivation for establishing a social Solving social problems enterprise is the entrepreneur’s personal interest in The operations of a social enterprise can be based on solving a problem existing in society. The entrepreneur the personal goals, principles, preferences, and values may have thought about tackling social problems by of the entrepreneur. The entrepreneur often gives a means of business operations for a long time. Before face to the operations, and the activities of the entire founding an enterprise it is good to take a moment to organization can be closely linked to a certain person consider the following questions: What is the problem or community. The entrepreneur’s enthusiasm and that the business operations will be used to tackle and will to realize his or her vision is a basic condition for what kind of resources will be used to tackle it? Who any successful business operation. The main goal of a are the potential customers and why would they be social enterprise is to adopt a social objective and to willing to pay for your specifi c product or service? communicate it to the outside world. The objective and business model must be defi ned from the beginning The entrepreneur must assess the profi t-making as the main factor directing business operations and feasibility of the new enterprise realistically, i.e. how the entire staff must be able to commit to this form of the business income is generated and the value operations. experienced by the customer is created. Later, these ideas will be used to formulate the value base of the An existing organization can become interested enterprise. Answering the questions listed above at a in social entrepreneurship also. In Finland, many very early stage makes it easier to prepare a feasible foundations and associations have in recent years business plan, too. It is also advisable to start testing established business operations to support their cause. the business idea by telling friends or business For this, a social enterprise is more than well suited. advisors about the idea. With the feedback received, A social enterprise established on the basis of an the idea will slowly be developed into a real enterprise. association or foundation can produce profi t through its business operations that are used in accordance with the operating principles specifi ed in its corporate rules.

26 27 Social outlook of the Double bottom line Values As with the aforementioned double bottom line, enterprise the objectives of a social enterprise can also be Often the sole aim of business is to maximize profi ts. The work of a social enterprise is based on value divided into two separate pieces: business and Vision is the entrepreneur or organization’s view of the This is also what many economists consider to be the choices, which form the basis for all of its activities. social objectives. Since the competitive edge of the enterprise, and its intent to fulfi l its social objectives sole purpose of an enterprise. The current Finnish Values are operating principles that are adopted social enterprise can be the positive impacts on the in 5-10 years’ time. The vision should be realistic but Limited Liability Companies’ Act shares the same basic by the working community and considered good environment and the community, the enterprise at the same time ambitious. It is the dream that the assumption: “The purpose of a company is to generate and important. These principles are refl ected in the should focus on assessing and measuring the impacts organization is working towards. The vision is not just profi ts for the shareholders, unless otherwise provided operating principle and vision. from the beginning. the entrepreneur’s objective but also serves as a clear in the company code” . landmark for the staff, guiding the development of the Values can also be described as wants. What does Short-term objectives can be set for anything from organization’s activities. The following questions can The aim of a social enterprise is different: business the enterprise wants to become known, recognized, a few months to a few years. The short-term goals be used to defi ne the vision of a social enterprise. is based on values and a specifi c social problem that or remembered for? An enterprise can have only one of a social enterprise that is starting business could the organization wants to solve. “Unless otherwise value or it can have many of them. It is advisable to be related to, for example, a successful launch or • What will the enterprise be like in 5 years’ time? provided in the Articles of Association” has therefore open the content and background of the values to establishing a position in the market. In practice, the • What results have been achieved by that time? taken on a new meaning. A social objective and oneself and the interest groups of the enterprise. The short-term objectives in the early stages are often • What would our society be like if the specifi ed mention of the limited distribution of profi ts can be following questions can be considered to defi ne the business objectives related to the enterprise’s daily problem was solved? included in the Articles of Association of a limited enterprise’s values: survival. The objective of a new social enterprise could • What is the socially sustainable operating company. Social objectives and profi t seeking go hand- be, for example, to offer new jobs to persons who • What do you want the customers to say about principle? in hand and are equally important. might otherwise fi nd it hard to fi nd employment. your enterprise?

The operating principle defi nes the reasons behind the In recent years, social business models have stirred a • Which matters are important in your enterprise? The long-term objectives are clearly related to the enterprise’s existence. It can also be called a mission lot of discussion. Recognized economics with Michael • Which approach do you want to apply towards enterprise’s values and social objectives. In the long and describes the strategic goals of the enterprise and E. Porter leading the way have initiated discussion on customers and staff? term – from two to fi ve years, a social enterprise must the measures taken to achieve these objectives. The the subject matter. The term used is double bottom aim to demonstrate signifi cant social impacts. The operating principle of the social enterprise also defi nes line, which means that a social enterprise has two means to assess these impacts have already been what social good it will be able to produce through its purposes; the social objective and the business goal. Objectives of the enterprise developed. Next, we will introduce an enterprise activities. The operating principle can be thought of as Both of these are important because without profi ts whose operational objective is to develop children’s the backbone and core of the enterprise’s work. The business cannot continue and without social objectives A set of defi ned objectives guides the tasks of the social skills. following questions will help to defi ne the enterprise’s the enterprise’s value base would be empty. From enterprise. Operations are actions that are facilitated operating principle: this point of view it can be stated that an enterprise by specifi c investments, and have specifi c infl uences. that focuses on the maximization of profi ts cannot Impacts are directed at the enterprise’s interest groups. • What values does the enterprise want to commit? be a social enterprise unless it has specifi ed a social These impacts should be demonstrated, measured, • What are the core objective of the enterprise’s objective. rated, and made public. Objectives determine what activities? should be measured. The objectives must be: exact, • What are the long-term objectives that the measurable, feasible, result-oriented, and temporally enterprise wants to commit to? restricted. When the objectives are met, the enterprises vision and operating principle are realized.

28 29 BUSINESS ON CHILDREN’S TERMS THE PURPOSE OF SOCIAL ENTREPRENEURSHIP IS TO SOLVE SOCIAL PROBLEMS THROUGH COMMERCE. TO ACHIEVE THIS END,

CASE ENTREPRENEURS MUST HAVE A CLEAR VISION OF THE ENTERPRISE’S ACTIVITIES. BUSINESS IS BASED ON THE ENTERPRISE’S STRONG VALUE BASE. THIS IS THE STORY OF TEAM PLANET, AN ENTERPRISE BASED IN JYVÄSKYLÄ, FINLAND, THAT AIMS TO DEVELOP CHILDREN’S INTERACTIONS AND GROUP WORK SKILLS.

Early stages of the to operate as an association funded by external operators such as Finland’s Slot Machine Association, enterprise but after they discussed the matter with consultancy companies, Korpela and Kalliovalkama-Mäkinen TeamPlanet is a social enterprise that is owned by Liisa became interested in the business model offered by a Korpela and Mirja Kalliovalkama-Mäkinen. Both have social enterprise. In summer 2013, TeamPlanet Oy was years of experience in various tasks in the social and registered in the trade register. healthcare sector. Before TeamPlanet, Kalliovalkama- Mäkinen worked as an entrepreneur in the home care sector for ten years. Korpela had held various Activities that enhance positions in Kalliovalkama-Mäkinen’s enterprise and at paediatric wards and sports associations. interaction skills

The idea of a joint enterprise dates back to the In addition to leisure time activities, TeamPlanet’s autumn of 2012 when the women noticed that child business idea is to provide various services to families protection work had increased signifi cantly within the for everyday life and crisis situations. The starting home care sector in the past years. This made them point is doing and playing together without competing. wonder about how they could have an infl uence on Entrepreneurs explain that interaction skills are development. Korpela has acted as a junior basketball extremely important for the children’s development. coach for years, which served as an inspiration to start Good interaction skills make children better equipped offering leisure time activities that would contribute to for later life. children’s development. Leisure time activities are conducted in groups that The business idea was developed intensively over the have been named fi ttingly. For example, Team Myrsky following spring. Before getting started, a small-scale offers adventure activities and TeamTheather theatre market survey was conducted and the views of local activities. Pricing is based on seasonal fees and at fi rst politicians and city management on the intended activities are organized during the autumn and spring operations were assessed. At fi rst, the women meant terms of primary schools.

30 31 Customer-orientation is key to the enterprise’s Improving youth employment is one of the main activities. Compared to traditional team activities, social challenges. TeamPlanet wants to support the TeamPlanet has a different approach to activities. employment of youth. In the future, 15-20 year old The enterprise offers the setting and equipment and people will be recruited as assisting instructors for the children can customize the activity together in various events. a group instructed by professionals. The aim is to commit children for a year at a time, which helps establish a relationship of trust between the instructor Transparency and and individual children. This way the instructor can better contribute to their development. Children are demonstrating impacts not divided into groups based on skill level, but all are welcome to play and participate in the activities just The values of a social enterprise are the basis of the way they want. Equality is emphasized, and all TeamPlanet’s work. According to Korpela and families and children are welcome. Kalliovalkama-Mäkinen, business and seeking to produce social good are not mutually exclusive, but In addition to leisure time activities, TeamPlanet good for each other. offers various professional, child and family-oriented services to families. These services are vital for the Transparency and demonstrating impacts are vital enterprise because they facilitate the proﬁ tability of parts of a social enterprise’s activities. For new business, whilst also facilitating the development of enterprises, these aspects can be planned beforehand, children’s activities. but the real impacts become visible only gradually. Team Planet develops practical methods for assessing children’s interaction skills as part of its training Social objectives services.

The social objective included in the company code Transparency can be put into practice from the very is clear: the enterprise aims to reduce loneliness in beginning. For TeamPlanet, extending transparency families and to promote children’s teamwork skills. to customers and interest groups is still being The enterprise wants to offer its services to all children planned. The plan is to publish the annual report and and families with children, including families that calculations on the sources of income, number of cannot afford any other activities. sponsored activities, and staff salaries.

TeamPlanet operates on children’s terms. One objective is to lower the threshold for children to Funds for activities through participate in group-work. The enterprise considers that it has met this objective when children feel that support services they have been heard and noticed and that they are valuable. The aim of TeamPlanet’s leisure time activities is not to yield profi ts. Instead, all profi ts are put back into development. The enterprise aims to generate profi ts

32 33 from the provision of family services. These profi ts TeamPlanet’s staff are a diverse group of skilled people Competition situation Towards the dream will, for the most part, be channelled into children’s that includes nurses, practical nurses, kindergarten leisure time activities. The aim is to keep the pricing teachers, physiotherapists, a social worker, and a Competition-wise, TeamPlanet operates in a kind It is diffi cult to predict the future, but each business of leisure time activities reasonable to ensure that paediatric psychiatric nurse. Also the staff have of market void. Similar companies that offer multi- must have a clear vision of the future. TeamPlanet’s families will be able to participate in them. adopted the values of social entrepreneurship. professional services to children and youth are few in short-term objective is to balance its operations and Working for children is an important motivator for the Jyväskylä region. Non-commercial evening clubs to reach as many families in the Jyväskylä region as Other businesses are offered an opportunity to all instructors and other staff members in their daily and sports clubs can be considered as providing direct possible. In the long term, TeamPlanet founders Liisa participate in supporting children’s leisure time work. competition together with various kinds of theme and Korpela and Mirja Kalliovalkama-Mäkinen would like activities by becoming sponsors or business mentors. sport adventure parks. Indirect competitors, on the to extend their particular social enterprise model to TeamPlanet commits to use partner donations to offer other hand, are multiple. For example TV programmes, other locations as well. a place for the children of poor families in activity Help through networking video games, and computers take up more and more groups. Long-term social impacts are produced when of even small children’s time. TeamPlanet makes use of Working towards a social objective can start with the children’s opportunities for leisure time activities In the early phases of business, TeamPlanet’s main children’s preferences and so one of the activity groups very modest business operations. Channelling the increase, supported by businesses. partners have included consultancy fi rms, whose ideas concentrates on playing, while another introduces entrepreneurs’ own values into business operations and advice were very important for getting things off the world of movies. In these groups, children learn creates a mindset and social ethos in which values Companies in the Jyväskylä region have shown the ground. The idea of a social enterprise generated interaction skills through games and movies. In the are integrated with all operations. Entrepreneurs are interest in what TeamPlanet has to offer. Several small through consultancy has slowly developed into a long term, children can develop innovations such as ready to commit to the social cause. TeamPlanet wants companies in particular have been very interested in functioning service based model. new games. to be a nationally recognized social enterprise and channelling funds towards this good cause. According social infl uencer. The new social entrepreneurs are to the founders, acquisition of sponsors has been On the other hand, fi nding fi nanciers has been really According to its founders, TeamPlanet does not now heading towards these goals. We wish them every challenging yet rewarding. More partners constantly diffi cult. Although all informed operators considered compete with sports clubs directly because the activity success! sought and children’s opportunities for leisure time TeamPlanet’s business idea to be very good, receiving groups are not competitive. In fact, its activity groups activities improve the more companies become funding has not been automatic. Funding channels support the work of sports clubs, because they aim to involved. However, things are not dependent on supporting social entrepreneurship are lacking in improve children’s interaction and teamwork skills sponsor funds alone, since the profi ts generated from Finland, which has also become evident for new social that are also important in competitive sports. This way TeamPlanet Oy the provision of family services and paid leisure time entrepreneurs. For this reason, TeamPlanet fi nanced sports clubs can indirectly benefi t from TeamPlanet’s activities are vital to continued development. the company with their own capital in the early stages. services, because children’s ability to work together Jyväskylä develops when they participate in TeamPlanet’s Founded in 2013 Finding funding channels is one of the most critical activity groups. In the future, the enterprise is planning Working with the best team phases of a new business. In the early phases, to start marketing their expertise in group-work skills Industry: other open social care services marketing and operational start-up costs are to sport clubs. www.teamplanet.fi At TeamPlanet, the quality of services is rated very expensive, while very little income is being generated highly. Everything starts with making the right to offset them. When the books have become balanced recruitment choices; staff are selected based on after a certain time, fi nanciers start to show interest. In skills and personal chemistry. The staff will work as TeamPlanet’s case, Finnvera will probably participate a team a lot of the time, with the aim to increase the as a fi nancier later. Other potential fi nanciers include meaningfulness of the work. the Centre for Economic Development, Transport and the Environment in Central Finland and Finland’s Slot Machine Association.

34 35 DEMONSTRATING SOCIAL IMPACTS Measuring social impacts The commercial Sofi e service came into being as a result of a comparison between the advantages and Measuring social impacts is key to justifying the disadvantages of the return on social investment and benefi ts of a social enterprise. Several methods to social accounting. Marketed by Impact House, the measure social impacts have been developed in Europe service combines the features of both and offers an including social accounting and return on social impact assessment service tailored to the needs of investment (SROI). social enterprises. The service is described in more detail in the following example. Social accounting is monitoring the fulfi lment of the set social objectives over a pre-determined time period. Despite its name, the purpose of social Corporate responsibility accounting is not to inspect the fi nancial indicators of the organization. In practice, social accounting is used reporting of a social to monitor the achievement of the social objectives set by the social enterprise in its corporate rules. The enterprise enterprise defi nes the quantitative or qualitative social indicators itself based on its social objectives. With The aim of a social enterprise is to demonstrate the social accounting report, the social enterprise can concrete social impacts. One means to do this is to demonstrate the results of its efforts, and provide corporate responsibility reporting. Traditionally we assessments of the social benefi ts of its operations in are only used to seeing this report enclosed with relation to its objectives to its interest groups. major corporations’ annual reports. However, a corporate responsibility report is an excellent means Return on social investments is a means to understand to demonstrate the impacts of a social enterprise and and communicate how the enterprise’s business introduce its services to interest groups. produces social value and how it is measured in purely monetary terms. A central objective is to calculate Usually the corporate responsibility report is divided a SROI fi gure, which is based on an assessment of into three sections covering the aspects of fi nancial fi nancial benefi ts that the enterprise will be able to responsibility, social responsibility, and environmental generate through its work. The ratio can be used to responsibility. Financial reporting discusses the determine, for example, how much society will save enterprise’s operations such as distribution of profi ts in relation to the capital invested. An SROI ratio of in an open manner. The social responsibility section, 4:1, for example, means that each invested euro saves on the other hand, uses the tools designed for four euros. With the return on social investment, the measuring impacts that are described in the previous social benefi ts produced by the enterprise can be chapter, to demonstrate the benefi cial social impacts shown to investors and partners in monetary terms. of the enterprise’s operations. The environmental This way the investor will be able to see the impact responsibility section describes the environmental of the money they have invested on solving the social measures taken by the social enterprise. problems. From the enterprise’s point of view, using the method helps to understand the company’s objectives and social impact.

36 37 DEMONSTRATING SOCIAL IMPACTS GGENERATINGENERATING SSOCIALOCIAL IIMPACTSMPACTS IISS AAMONGMONG TTHEHE MMAINAIN OOBJECTIVESBJECTIVES OOFF A SOCIALSOCIAL EENTERPRISE.NTERPRISE. ASSESSINGASSESSING THETHE IMPACTSIMPACTS CANCAN BBEE DIFFICULT.DIFFICULT.

CASE FFOROR NNEWEW EENTREPRENEURSNTREPRENEURS IINN PPARTICULAR,ARTICULAR, TTHEHE TERMTERM SOCIALSOCIAL IIMPACTSMPACTS IINN IITSELFTSELF CCANAN BBEE UUNFAMILIAR.NFAMILIAR. TTHEHE SSOLUTIONOLUTION IISS SSOFIE,OFIE, A SERVICESERVICE PRODUCEDPRODUCED BYBY IIMPACTHOUSEMPACTHOUSE TTHATHAT OOFFERSFFERS SSOCIALOCIAL EENTREPRENEURSNTREPRENEURS THETHE MEANSMEANS TOTO DEMONSTRATEDEMONSTRATE TTHESEHESE IIMPACTS.MPACTS.

History A limited liability company model was considered one of the best options for a long time, but a registered ImpactHouse is a registered enterprise that offers association seemed to facilitate a better means for consultancy services to companies and organizations infl uencing various operators. The Sofi e service serves relating to the analysis of social impacts. ImpactHouse as the basis for the enterprise’s payable services. was founded in spring 2013, but its story started before that. Impacts matter Funded by the Finnish Funding Agency for Technology and Innovation (TEKES), a social enterprise called Demonstrating social impacts is currently important, Syfo Oy started to develop Sofi e, a service designed and according to Jaana Merenmies, its importance for measuring social impacts, in 2007 together with will continue to increase in future. Finland’s Slot an extensive network. When Syfo Oy began to wane, Machine Association, for example, fi nances various ImpactHouse was founded to develop the service kinds of projects and is developing a model in which further. The chair and founder of the association is funding in the future would be granted, based on Jaana Merenmies, who has extensive experience in social impacts. Some municipalities have also started the provision of consulting services for corporate to emphasize social impacts in public procurement management. The others involved are also experienced and even seek impacts directly. In Espoo, for example, professionals. youth employment has been used as a criterion in the city’s public procurement. This is a major opportunity Very little is known about social impacts and impact for social enterprises and Sofi e provides an excellent management in Finland. ImpactHouse ry addresses means to demonstrate the impacts to interest groups. this problem by increasing awareness of social impact management and its signifi cance for various organizations. Before the association was founded, the exact format of the business was carefully considered.

38 39 Applying best practice Sofi e service. Assessment skills make it possible to the enterprise itself, the estimate clarifi es the impacts Demonstrating impacts understand the signifi cance of social impacts as a that it can achieve. According to Merenmies, SROI and social accounting starting point for all business. The Sofi e service has been developed to meet a models that are popular abroad, are too complex and According to Jaana Merenmies, the service is at its certain need. Measuring impacts is one sector of burdensome for small and medium-sized enterprises best, a seamless part of the management’s toolbox. social entrepreneurship in which national expertise in particular. The starting point of the Sofi e service is Suited to all kinds of users The service will be tailored to the needs of each is yet relatively undeveloped. International systems to capitalize on the strengths of these models and to enterprise separately. Depending on the background developed for measuring impacts are not necessarily minimize their weaknesses. The Sofi e service is a diverse tool that adapts to of the enterprise, the training and conveyance of suited for small enterprises without modifi cation. For the needs of all enterprises regardless of their size. competencies will be planned individually. The actual this need, a service where the customer does not buy a The use of the service is based on a cloud tool, which For existing enterprises the service offers tools for date of commencement of the service depends on the mere tool, but also develops their own competencies in allows the enterprise to monitor and report its social monitoring and managing social impacts. Information competencies of the enterprise or the entrepreneur. assessing impacts, is perfect. impacts in a systematic way. The most visible part of produced with the service can be used to support In the case of new enterprises, for example, the the service is social impact reporting that provides management operations, e.g. by supporting the staff preparation of a social impact assessment produced For new entrepreneurs and enterprises, the idea of information of the impacts to interest groups inside or as a tool for strategic planning or operational using the Sofi e service takes nearly the same amount social entrepreneurship can become clearer when the and outside the enterprise. According to Merenmies, development. The service can be used to report the of time as preparing a business plan. impacts are assessed for the fi rst time. Sometimes, the overall learning process of the enterprise using value of social impacts in monetary terms to external the actual social benefi ts of its work can come as a Sofi e is at the core of the service, as it improves the interest groups, for example, an ethical investor will surprise. Often, a lot of social good can be achieved enterprise’s ability to assess the impacts. be given exact information of the impacts reached Recognized users through the smallest investment. ImpactHouse’s through his or her investment. service provides an excellent option for demonstrating The pricing of the service is based on an assessment- benefi cial social impact. Conveying competencies In the case of new enterprises, the service can be put specifi c fee. The number of users per enterprise is into use in the early stages of planning the company’s not restricted because it is better for the quality of is key activities. Adopting the service early in the start- the service if more people within the enterprise are up phase allows for a deeper analysis of the social familiar with the measuring of the impacts. Each ImpactHouse ry ImpactHouse’s service is based on training the users to impacts and the means to measure them. project will be priced separately because the needs of measure impacts and on conveying competencies to the enterprises differ. Training relating to the service Helsinki the enterprise. This means that the organization that can also be implemented in various ways, for example Founded in 2013 acquires a licence to use the service receives not only Planning support as group training organized jointly for several social an electronic tool but also a lot of information on the enterprises. This not only lowers the cost of the www.impacthouse.fi matter. During the start-up stage, Sofi e can be used to produce training, but the enterprises will get the chance to www.sofi enet.fi an estimate of the enterprise’s social impacts, which learn from each other. Other impact measuring services in the market do can be used as a basis for the services it provides. This not convey competencies, but results. According to estimate is often incorporated into the business plan. Sofi e users include enterprises and organizations from Merenmies, it was vital to do otherwise when the The estimate clearly reveals the relationship between various operating fi elds. In the public sector the service service was being developed. The purpose of the the level of impacts and turnover. The estimate in is used by the City of Espoo and Yleisradio Oy (Finnish conveyance of training and competencies is to ensure particular benefi ts enterprises that receive funding Broadcasting Company). Foundations that use the that the users will in the end be able to manage the from ethically oriented operators that wish to pay service include the Helsinki Deaconess Institute. The impact assessment process independently using the attention to social impacts in their investments. For service is also used by a number of smaller operators.

40 41 THERE ARE ALSO OPPORTUNITIES FOR FINANCIALLY PROFITABLE SOCIAL SOCIAL ENTERPRISE ENTREPRENEURSHIP IN MARKETS WHERE BUSINESS HAS BEEN RARE OR NON-EXISTENT. THIS DOESN’T MEAN THAT DEMAND WOULD NOT MARKET BE REQUIRED FOR THE PRODUCT. SOCIAL ENTERPRISES HAVE BEEN ESTABLISHED IN MANY DIFFERENT SECTORS.

THE ENTERPRISES INTRODUCED IN THIS PUBLICATION REPRESENT NINE DIFFERENT SECTORS. THEY INCLUDE OPERATORS IN THE PUBLIC SECTOR, THIRD SECTOR ORGANIZATIONS, AND SOCIAL ENTERPRISES. THIS CHAPTER INTRODUCES THE MARKETS FOR SOCIAL ENTERPRISES AND DIFFERENT TYPES OF SOCIAL ENTERPRISES THROUGH EXAMPLES.

Public procurements and In the long term, purchasing high-quality services is nearly always more sustainable than choosing the social impacts option with the lowest price. Several guidelines have been written for responsible procurements such The Finnish Procurement Act is applied to as the CSR Compass administered by the Ministry procurements in the public sector. For many of Employment and the Economy and Motiva’s enterprises, participating in public procurements Procurement Service that offers advisory services on is part of everyday business, and constitutes a sustainable public procurements. signiﬁ cant part of the enterprise’s turnover. With good preparation, small companies can win bidding Social and health care services account for around competitions and increase their turnover through sixty per cent of municipal expenses. By choosing them. a locally owned and produced service, this capital can be channelled at least partially back into the In most cases, the offer with the lowest price tag wins municipal economy. A locally owned and managed bidding competitions organized for public service social enterprise can have a positive impact on the procurements. Including sought-after social impacts as local economy and have a central role as a producer criteria in the invitation to tender in the planning stage of local wellbeing services. On this basis it can be increases a social enterprise’s ability to compete with stated that it is more sustainable to choose a locally sustainable businesses. For the organizer of bidding owned enterprise to produce services than a multi- competitions, the use of qualitative criteria requires national one that does not necessarily pay taxes in daring and skills to implement the procurement right. Finland. Municipalities and cities have also slowly

42 43 started to consider these aspects in their own bidding In the social and healthcare sector, social competitions. The City of Espoo is a case in point, entrepreneurship is extremely popular on an having used a range of qualitative criteria in its international scale, too. In Great Britain, for example, competitive bidding for services. social enterprises often operate as producers of healthcare services. In Finland, Mäntänvuoren Terveys Oy based in Mänttä-Vilppula in central Finland is a Social enterprises in good example of cooperation between the municipal and private sectors in social and healthcare services. cooperation with the public The tasks of the municipalities and cities also include sector taking care of the weakest members of society. City- owned rental apartments and supported mother and Various changes in society open up opportunities child homes, are examples of the measures taken by for the founding of social enterprises. These include cities to help those who are in a vulnerable position. decisions made in the public sector that aim to Sometimes also these services have been contracted contract out services that have traditionally been out. The following example is a social enterprise that organized by public operators, such as municipalities operates in various locations in Finland and who and the state. welcome everyone as their customers.

Municipalities try to eliminate all operations that are not required from them by law due to the pressure to cut expenses. On the other hand, municipalities are bound by law to secure the availability and quality of services, which the residents are also used to. New cost-effective service models and new innovations are constantly needed to compensate the increasing social and healthcare service expenses. The writer of the preface of this publication, Diacor, which is owned by the Helsinki Deaconess Institute and offers GP, occupational health, specialist, and hospital services, is an example of such a social enterprise.

44 45 “WE WELCOME EVERYONE” WHAT WOULD YOU DO IF YOU SUDDENLY ENDED UP WITHOUT A PERMANENT APARTMENT? OR IF A FRIEND WITH AN ALCOHOL

CASE PROBLEM WANTS TO STOP DRINKING BUT HAS NO APARTMENT? OR A RELATIVE HAS LOST THEIR CREDIT RATING AND CANNOT GET A RENTAL CONTRACT THROUGH NORMAL CHANNELS? HOW WILL THESE PEOPLE EVER GET BACK ON THEIR FEET? THERE IS A PLACE WHERE THEY ALL ARE WELCOME: SHELTERED HOUSING OFFERED BY THE FINNISH FEDERATION OF SETTLEMENT HOUSES.

other operations to offer housing. The development of History social housing and related housing services, started at the beginning of the millennium. The aim of the The Finnish Federation of Settlement Houses is foundation was to develop a model for sheltered part of the international settlement movement. The housing for persons who cannot easily fi nd housing general objectives of the movement are related to the otherwise. development of communality in society. The history of the Finnish Federation of Settlement Houses dates back nearly a century. Founded immediately after About the enterprise independence in 1918, the federation was the second NGO to start up in newly independent Finland. From The foundation’s housing services are divided the very beginning, the aim has been to bring together between two companies. S-Asunnot Oy was founded various social classes and people who think differently. by the Finnish Federation of Settlement Houses and The Finnish Federation of Settlement Houses conducts the Kalliola Settlement in 2000. The fi rst apartment for example cultural, educational, and social work building was completed in Malmi in Helsinki three through local Settlements. In total, there are 36 local years later. At present, S-Asunnot Oy administers Settlements and 8 district organisations of Settlement over a thousand rental apartments around Finland. Youth across Finland. The Foundation administers, Its affi liate Senioriasumisoikeus Oy was founded in among others, 18 community colleges and coordinates 2008 and administers around 400 right-of-occupancy victim support. A non-profi t organization, the apartments. The enterprise aims to provide high foundation provides services of general interest. quality, reasonably priced, and sustainable housing close to services. The objectives of the Finnish Federation of Settlement Houses are strongly related to working with children S-Asunnot Oy offers rental housing in apartment and the youth, senior citizens, and multicultural buildings known as Ässäkoti mainly in the Helsinki groups. As the term ‘settlement’ refers to settling down Metropolitan Area. It also owns apartments in and housing, it is also in line with the foundations’ Hyvinkää and Tampere. In addition to the Helsinki

46 47 Metropolitan Area, Senioriasumisoikeus Oy owns Another important means to increase communality apartments in Hyvinkää and Kuopio. These apartments is the lounge that can be found in each building. It can be applied for by persons over 55. is a premise meant for all residents where they can read the daily papers, watch TV, or use a computer. S-Asunto Oy’s apartments are mainly constructed with The lounge is usually located next to the resident ARA-funding, which is granted by The Housing Finance management agent’s offi ce, which makes it easy for and Development Centre of Finland (ARA) and restricts the residents to visit them both at the same time. the selection of residents. ARA-funded housing must Residents are encouraged to organize various kinds be offered to persons with a low-income and who of activities in the common premises. Events are have no suffi cient savings to purchase an apartment. resident-oriented or support the wellbeing of the S-Asunnot Oy offers housing for special groups also, residents. For example in Kuopio, two events a month such as long-term unemployed and disabled persons. were organized in 2012 in a senior right-of-occupancy This kind of housing constitutes 15-20 percent of all apartment building. In these events, the residents S-Asunnot Oy’s properties. For example the property in received information about various themes of their Saunalahti in Espoo includes ten apartments for young choice. In Kalasatama in Helsinki, the residents of people with special needs. senior rental apartments have organized weekly coffee clubs, art exhibitions, and boating trips to the archipelago. Supported social housing The social real estate management model was tested Social objectives in the fi rst housing company owned by S-Asunnot Oy with the fi nancial support of ARA, and it was later S-Asunnot Oy’s social objective is strongly linked extended to all properties owned by S-Asunnot Oy to developing the quality of housing. The aim is to and Senioriasumisoikeus Oy. At present, a resident increase the communality of housing and, at the same management agent has an offi ce in each residential time, help those of the residents who need support building. The services of the resident management in their housing. In supported housing, the residents’ agent are meant for all residents of the building. Each need for support varies greatly and the resident resident management agent has a degree in social managing agent helps the residents in fi lling housing welfare and is therefore able to help the residents in support forms and the like. a range of situations. Resident management is used to develop the communality of housing and offer The enterprise uses all profi t for developing its the residents support in everyday housing. In the activities. It is stated in the company code that the supported housing model, the role of the resident enterprise does not distribute dividends to its owners. management agent is to address any emerging This does not, however, mean that the business is not problems such as delays in the payment of rent at profi table, as the aim is to make profi t each year that an early stage. This business model has achieved is invested back into the enterprise for development. excellent results and delays in rental payment, for Business is transparent: the annual report is public example, are very rare. and the enterprise explains its operations openly. The

48 49 business model is not a trade secret. Managing director instructs them on matters relating to housing. The More social housing in Experienced corporate Esa Fagerlund hopes that other operators would also company has generated concrete social impacts by future manager’s advice to new adopt the resident managing agent model. reducing homelessness in the Tampere region. Esa Fagerlund predicts that the need for supported social entrepreneurs The third example is a rental building completed in housing will continue to increase in Finland and Signifi cant impacts Vantaa in 2013, where twenty of the eighty apartments therefore there will be also be a demand for their Soon to be retired managing director Fagerlund are reserved for young persons with disabilities. work in the future. Economic ups and downs in encourages new social entrepreneurs to bravely take According to Fagerlund, the enterprise generates A support unit of the City of Vantaa is located in the construction sector will affect the speed of the up the challenge. Honest hard work and genuine benefi cial social impact for residents, and also for the building that manages the support needed by expansion, because during a favourable economic commitment towards achieving social objectives, and municipalities. Unlike other operators in the fi eld, the disabled residents. In addition, the resident situation construction fi rms do not submit tenders demonstrating it through transparent operations is S-Asunnot Oy offers housing for persons who cannot management agent operating in the building serves all to rental housing constructors, which means that important. Entrepreneurs should keep in mind that all easily fi nd it otherwise. No-one is therefore turned residents. A couple of apartments in the same building S-Asunnot Oy cannot then construct new housing. business should benefi t the client, and consequently away, as everyone is welcome. In municipalities, the are reserved for young clients of child protection, as Activities also depend on the availability of public the company itself. Innovativeness and sensitivity company is valued because it helps ease the housing their fi rst homes. funding, i.e. funding granted by ARA. In the future the to changes are also key to the management of a situation by offering supported housing services to all enterprise intends to invest in new buildings, where successful enterprise. The social objectives should be sectors of society. opportunities arise. Offering housing for the elderly kept in mind, but the business must also adapt to a The social enterprise mark will also increase in the future. constantly changing environment. Fagerlund is only sorry that as a small operator, the social impacts of the enterprise are relatively small. aff ects the image The more accurate measuring of social impacts is On the other hand, a person or a family that gets another important project to be implemented within back on their feet after a hard time is never a small S-Asunnot Oy and Senioriasumisoikeus Oy were the enterprise. A member association of the Finnish achievement and if S-Asunnot Oy has contributed to among the fi rst operators in Finland to be granted Federation of Settlement Houses in Järvenpää has used S-Asunnot Oy this, it is an excellent result according to Fagerlund. As the Finnish Social Enterprise Mark in March 2012. the social accounting model to demonstrating impacts an example, he tells about the trial implemented with Fagerlund says that the mark has improved the image and S-Asunnot Oy plans to use their experience in Helsinki Kalliola Settlement that involved offering housing for of the enterprise especially when operating in the measuring its social impact. Founded in 2000 fi ve persons with a substance abuse background. Four municipal sector. The mark shows that the enterprise’s of them have since then given up drugs and alcohol. operations are ethically sustainable. Industry: renting of apartments This emphasizes the fact that an opportunity for Turnover, S-Asunnot Oy: €7.6 million, supported, permanent housing is of vital importance Fagerlund has also participated in the Ministry of the Senioriasumisoikeus Oy: €3.1 million, in in situations like this. Environment’s working group on the Development total: 10.7 million. programme for housing for elderly people that will Another example of the social impacts facilitated by continue until 2017. The objective of the government- www.setlementti.fi /s-asunnot the housing services is from Hervanta in Tampere, approved programme is to develop the level of housing where S-Asunnot Oy owns a total of 20 rental buildings for elderly people and opportunities for living at home meant for under-29-year-olds who have been homeless in Finland. Viewed against this background, it can be for a long time. The City of Tampere refers them to stated that S-Asunnot Oy and Senioriasumisoikeus supported housing. In the housing company, a three- Oy’s work is highly important and that they have person team manages the residents’ matters and served as pioneers in a developing fi eld.

50 51 SOCIAL RENEWABLE ENERGY The energy industry in the Improving the environment turmoil of change There is an ever-strengthening common intent in In the 1990s, electricity markets were limited and our society to improve the state of the environment. electricity could only be purchased from the local The appreciation of environmental matters has electricity company. Most of the energy companies that increased partly due to the discussion on global used to be owned by municipalities and the state have warming. Various operations relating to recycling and been privatized. Social enterprises are perfectly suited environmental protection are perfectly suited for social for producing these necessary services. Local heating enterprises. In the countryside, available opportunities plants around Finland are an excellent example of this include services aiming to promote the sustainable development. Usually heating companies that employ use of natural resources and improve the state of the a cooperative model and produce renewable energy environment. have been able to demonstrate social benefi ts they create. This means that social enterprises are emerging Countryside and sparsely populated areas have in the bio-energy sector in Finland. become known as the users of cooperative business models. Small consumer cooperatives, dairy Social companies have had a particularly important cooperatives, and meat cooperatives founded in position in the production of renewable energy in the last century are excellent examples of social Denmark, Scotland, and Germany, for example. In entrepreneurship. Since then, many of these pioneers all these countries wind parks and solar energy in the fi rst generation cooperative activities have parks owned by local communities hold a decisive extended into multi-sectoral businesses, and the social position when a shift is made from fossil fuels to cooperative idea has disappeared during the growth. renewable energy. Community-owned renewable energy production arrived in Finland at the turn of the Small cooperatives founded towards the end of the millennium. millennia are fresh examples of the opportunities of social operations. For example producer, broadband, At best, social entrepreneurship in energy production and energy cooperatives established all over Finland benefi ts local residents. The production of wind power show that cooperatives can be used to create new provides the local community and landowners with jobs in sparsely populated areas. Energy cooperatives much needed additional income. Experience also maintain, for example, local heating plants. Using shows that opposition to the construction of wind locally harvested energy wood in heat production power plants is reduced when local communities are creates a local market and procurement chain for invited to participate as owners. A wind power plant energy wood, and is also signifi cant in terms of that operates as a social enterprise can also sell wind forest management. Next, we will introduce the fi rst power to its owners at a price lower than the current wind power company in Finland that is owned by its market price. customers. After that, we will look at a cooperative, which saves a million litres of heavy fuel oil each year.

52 53 FINLAND’S FIRST CUSTOMER-OWNED LUMITUULI IS A COMPANY, WHOSE STORY GOES BACK TO THE SMALL WIND POWER COMPANY DISTRICT OF LUMIJOKI IN NORTHERN OSTROBOTHNIA IN THE MID-

CASE 1990’S. AT THE TIME, LOCAL RESIDENTS AND DECISION-MAKERS CAME UP WITH THE IDEA TO PRODUCE WIND POWER. HOW DID THIS SOCIAL-ORIENTED PROJECT GROW INTO THE FIRST AND LARGEST PRIVATELY-OWNED WIND POWER COMPANY IN FINLAND?

History oriented environmental association it was only natural to support a project that aims to increase the use of In the 1990s, Lumijoki became interested in producing renewable energy. A group of the association’s active renewable energy. Members of the local community members decided to revive the old idea of constructing and municipal decision-makers had already a wind power plant in Lumijoki. In part, the decision investigated the option of establishing their own was supported by the recently adopted amendment to wind power plant at the beginning of the decade. the Finnish Electricity Markets Act that allowed people Wind measurements conﬁ rmed that the area was to purchase electricity from any operator regardless of suitable for wind energy production. Local politicians their location. Therefore, electricity produced by the responded favourably to the idea of constructing a wind power plant in Lumijoki, could be purchased by a wind power plant in the municipality of Lumijoki. person living in Helsinki.

Following various survey projects, Sähköosuuskunta The members of Dodo ry were able to win the support Lumi, a cooperative owned and administered by the of the local community in Lukijoki. The construction of local community was founded in 1996. Despite the wind power in Lumijoki seemed possible and so Dodo good intentions, the resources of the small locality ry started to market the idea through their networks were too few. Subsequently, the power plant was in the Helsinki Metropolitan Area also. The idea was not constructed and the electricity cooperative was new on a national level, as there were only a few dozen discontinued. wind power plants in Finland at the time, and none of them community-owned.

An environmental The learning curve was relatively steep at the beginning of the project, as a lot of research was association joins the project required on e.g. the permit process, zoning, and wind power technology. The community-oriented The idea of a community-owned wind power plant project started on a volunteer basis to ensure that it had, however, reached the Helsinki Metropolitan area, would be implemented. As the result, Lumituuli Oy where members of an environmental association Dodo was established in March 1998. It was registered in ry became interested in the matter. For an operation- Lumijoki and had its headquarters in Helsinki.

54 55 The vital measures of the the planning of the foundation. For this reason, an early stages artifi cial island was constructed for the foundation. Transporting the actual plant to the island was a The business was at fi rst funded with the founders’ major operation that required top expertise. The only own capital, which was used to plan a marketing option to transport the components of the power plant campaign and start the permit process in order to was to construct an ice road. Luckily the winter was establish the power plant. From the moment of its favourable and the ice was suffi ciently thick after the founding, it was clear that the fi rst wind power plant frost season in February to construct the road. would be fi nanced for the most part, with a public issuance of shares. Based on previous experiences, The Lumituuli power plant in the Routunkari shallows it was decided that the interest of one locality only in Lumijoki started to produce electricity in 1999. The would not be suffi cient to collect enough capital and so plant, known as Sähkäle, has been in operation since anyone was invited to invest in the project regardless then, producing 1400 megawatt hours of wind power of their place of residence. This allowed for the local every year. The production corresponds to the annual community in Lumijoki, as well as anyone interested electricity consumption of around 700 two-bedroom in renewable energy around Finland to participate in apartments. Because there were very few wind power the enterprise. plants in Finland at the end of the 1990s, Lumituuli has, as one of the fi rst wind power companies, Active distribution of information was used in the developed into a signifi cant wind power operator on a marketing of the public issuing of shares using the national scale. channels available at the time. In the small community of Lumijoki, information spread quickly through the grapevine. In the Helsinki Metropolitan Area, brochures Harnessing the wind were distributed at various environmental events and the issuance of shares marketed in the paper. The The objective of Lumituuli’s operations is to produce public issuance of shares raised the 600,000 euros wind power, to promote the use of wind power that was needed to construct the wind power plant. especially in Finland, and offer consulting services in In addition, the then Ministry of Trade and Industry the energy sector. The enterprise employs two people, granted the project 30 per cent investment support the managing director Sampsa Hario and development fund. The rest of the funding was covered with a bank manager Timo Lahti. Lumituuli has two wind power loan. plants of its own; one is made by a Danish company Vestas and was completed in Lumijoki in 1999, and the other one is made by a German company Enercon Constructing the power and was completed in 2013. In addition, Lumituuli owns part of the Nordic Larsmo Vindkraft wind plant at sea power company, and Åland-based Ålands Vindenergi Andelslag cooperative. Construction started in 1998. Because the power plant is located at sea, the movement of ice and the erosive After its foundation, Lumituuli issued new shares to effect of waves on the soil had to be considered in raise capital for new wind power projects. This has

56 57 widened the ownership base of the enterprise and The restricted distribution of profi ts is stated in the Respecting the opinions of For example the fi ndings of the Natura assessment at present, it has over 1200 shareholders, with the enterprise’s articles of association, ensuring that the local community completed as part of the permit application process for majority of them private persons. The demand for the profi ts are channelled to promoting the social a wind power park planned in the Oulunsalo-Hailuoto the shares and the electricity generated by Lumituuli objective. The enterprise has not paid dividends to In the case of Lumituuli, openness means active area prevented the construction of the park to the has remained stable and people want to become its shareholders, although according to the articles of interaction with the local community. Opinions of intended extent. Lumituuli did not wish to challenge involved for various reasons. Some of the owners association, it could do so. All profi ts generated by the the local community are respected in the planning the decision but planned the project reducing the want to support projects aiming to increase the use enterprise have thus far been channelled to developing of new projects and the distribution of information number of wind power plants and changing the of renewable energy, while others want to reduce the new wind power projects. is open throughout the project. Active distribution location of the plants to accommodate the needs carbon footprint of their own electricity consumption of information helps reduce local opposition to the of the environment. This kind of responsibility and by investing in wind power. The operations have generated concrete impacts such construction of wind power. respect for the environment should be the goal of all as the wind power plant completed in Iate 2013. The businesses including social enterprises. Lumituuli sells wind-generated electricity to its plant doubled the volume of wind-generated electricity In the case of Lumituuli, relations with the local shareholders only. The long-term price level has produced by Lumituuli. For their part, Lumituuli’s community are excellent in Lumijoki, for example. Lumituuli makes an important contribution to the remained lower than the market average, which power plants help reduce carbon dioxide emissions Managing director Sampsa Hario says that when promotion of the production of renewable energy. Our means that the shareholders who use wind power in Finland by replacing fossil fuels with renewable he visits Lumijoki people often ask him when the dependence on fossil fuels is not sustainable, either benefi t fi nancially from Lumituuli through reduced wind generated electricity. In addition, Lumituuli has enterprise will construct new power plants in the economically or environmentally. This highlights the electricity costs. One share entitles the shareholder to aimed to promote the production of wind-generated area. This is further proof of the success of the social- role of local energy production solutions in reducing purchase 500 kWh of wind-generated electricity that electricity in Finland through investments. Of this, oriented enterprise. the use of fossil fuels. As a socially oriented operator, covers around one quarter of the annual electricity Larsmo Vindkraft is a good example, of whom Lumituuli has proven that the values of a social consumption of a two-bedroom apartment. Electricity Lumituuli is a signifi cant owner. Where possible, Lumituuli aims to favour local enterprise are a feasible asset and that businesses is sold to shareholders through Ekosähkö Oy, which businesses and people in its projects. For example can achieve real social benefi t. Success stories like transfers the electricity generated at Lumituuli’s power Through various projects, Lumituuli is constantly in Lumijoki, local companies completed most of the Lumituuli help construct a basis for more sustainable plants to end users. seeking new areas suitable for the production of construction work relating to the power plant. The energy production in Finland. wind power. Based in Helsinki, the enterprise’s main running of the power plant is monitored remotely, interest is naturally in suitable areas in the Helsinki but in the event of disruption, a local fi sherman, Eino Social impact Metropolitan Areaand, and one of its development Korkala, gets into his boat and checks the plant on site projects aims at constructing wind power plants in before restarting the service. Since its foundation, Lumituuli has been a social Helsinki. Lumituuli Oy operator. The idea that was originally created by Helsinki • Lumijoki the local community to generate wind power has In accordance with the objective to promote the Environmental values close developed into social entrepreneurship. Lumituuli’s production of wind power, included in the enterprise’s Founded in 1998 social objective is to promote the construction of articles of association, Lumituuli is an active operator to heart Industry: production of hydro and wind wind power in Finland. Measures aiming to increase in the wind power sector and a member of the Finnish power generated electricity the production of renewable energy are a central Wind Power Association (FWPA). The values and transparency of the social enterprise part of Lumituuli’s operations. Social impacts are are also refl ected in the preparation of new wind www.lumituuli.fi created when the production of renewable energy power projects. In some areas, for example, the goals of increases and, subsequently, fewer and fewer fossil nature conservation have prevented the construction fuels are needed. This way the enterprise can affect of wind power plants. Lumituuli’s principle is that the sustainability of Finnish energy consumption by environmental values must be respected and the increasing the availability of renewable energy. construction of a power plant must not damage nature in the area.

58 59 SOCIALLY-ORIENTED LOCAL EENONO IINN JJOENSUUOENSUU IISS BBURSTINGURSTING WWITHITH AACTION.CTION. IINN AADDITIONDDITION TOTO ENERGY PRODUCTION CCOMMUTERS,OMMUTERS, THETHE ROADSROADS AREARE POPULATEDPOPULATED BYBY HEAVYHEAVY TTRUCKSRUCKS

CASE HHAULINGAULING TTIMBER.IMBER. BBEHINDEHIND TTHEHE SSERVICEERVICE SSTATION,TATION, FFAINTAINT DDRIFTSRIFTS OOFF SSMOKEMOKE AARERE RISINGRISING TTOWARDSOWARDS TTHEHE CCLEARLEAR SSKY.KY. IITT IISS TTHEHE WWOODOOD CCHIPHIP BBURNINGURNING PPLANTLANT OOFF EENONO EENERGYNERGY CCOOPERATIVEOOPERATIVE TTHATHAT IISS PPRODUCINGRODUCING RRENEWABLEENEWABLE DDISTRICTISTRICT HHEATINGEATING TTOO TTHEHE NNEEDSEEDS OOFF TTHEHE LOCALLOCAL RESIDENTS.RESIDENTS.

The idea of producing local energy in Eno dates back energy cooperative to the region. Employment and to 1996 when landowner Teuvo Hirvonen started to other impacts on the local economy were the main wonder about establishing a local heat power plant considerations when comparing the use of renewable that would utilise wood chips as fuel. It was clear forest energy sources with fossil fuels. The interest from the start that a plant of this scale could not be of local decision-makers in the production of local established by one man alone, and therefore Hirvonen energy, and fi nding suitable operators facilitated the started to seek interested people to participate in the registration of Eno Energy Cooperative in the trade project and to network with local operators. register just before the turn of the millennium, and heat production could be started. Starting with a new business model The energy cooperative At fi rst, the Eno Energy Cooperative involved twelve During the start-up phase, the cooperative model local forest owners. The company has since expanded, stirred a lot of suspicion. Some criticized the use of and currently has 52 members. The business idea of wood as the only fuel, whilst some others doubted the cooperative is to manage the entire district heat the profi tability of a cooperative. Lack of knowledge production chain from the forest to the end customer, was partly to blame: at the time the cooperative was at a reasonable price and based on the turn key founded, the use of wood chips for heat production principle. was new in the region and only a few industrial- scale plants existed in the whole of Northern Karelia. The cooperative purchases the raw material used Introductory visits to Tuupovaara nearby and the local in heat production, i.e. wood chips, from a contract energy cooperative and the profi tability calculations supplier. Around one fi fth of the wood chips come from prepared in cooperation with the Forestry Centre the forests owned by the members of the cooperative, of North-Karelia’s Roihu project, helped to shed all and the rest is purchased from the general market. suspicion. The owners of the cooperative have a total of around 8000 hectares of forest, so there is no shortage of raw The fi nal push was provided by the municipal manager materials as yet. Wood chips are used to produce heat of Eno, who understood the value produced by the in the heating plants owned by the cooperative. The

60 61 contract supplier supplies woodchips to the heating cooperative are key to the success of the enterprise. plants based on need. During the frost season in The members have knowhow for example in winter, 60 cubic metres of woodchips is burned at just accounting management, electrifi cation and metal one heating plant in Eno in a day, which means that at work, energy wood harvesting, and maintenance work. times the supplier delivers woodchips twice a day. The organizational structure is simple, excluding, for example, a managing director. Operations manager Heat energy is transmitted to the customers using Vesa Mutanen is responsible for the operation of the district-heating network that is owned by the the heating plants together with plant managers. cooperative. The total length of the network is several Administration manager Urpo Hassinen supervises kilometres and the operations are profi table when accounting and fi nancial management and forest the property is located a reasonable distance away manager Tuomo Turunen procures the energy wood. from the heating plant. Both municipality-owned and private housing companies and business buildings have joined the network. Compared to oil heating, Impacts on regional locally produced district heat saves the fi nal user, such as a terraced house housing company, 5,000-10,000 economy euros in heating a year. For housing companies, the estimated payback time of the investment needed for The cooperative employs seven to ten persons a year, using district heating is 3-5 years. which is a lot in a locality the size of Eno. The raw material mainly consists of material derived from the Up until now the turnover of the cooperative has fi rst thinning of forests and the tree-top mass collected increased nearly every year. More properties have during fi nal cutting, which would otherwise be left joined the district-heating network, at an even pace. In behind in the forest. The fact that the cooperative recent years, the annual turnover of the enterprise has uses relatively small wood as the raw material of been slightly over one million euros. Those members of wood chips, forest owners are encouraged to conduct the cooperative that have sold wood to the cooperative thinning and take forest management measures during the year will benefi t fi nancially from the excess more often. Wood procurement of the cooperative is produced by the enterprise. The remuneration paid therefore directly linked with the renewal cycle of local from any excess increases the price received by the forests and the income generated from them in future. sellers for the wood compared to the price in the general markets. The burning of wood chips saves around 1.9 million litres of oil, which reduces the carbon dioxide emissions of heating signifi cantly. Networking is key In euros, that volume of oil would cost around two Eno Energy Cooperative is a multisectoral specialist million euros. Since the annual turnover of the network. Without a joint effort to make the cooperative cooperative has in recent years been around one work, its operations would not be possible to this million euros, the local property owners save the same extent. Trust in the skills and competence of others amount, as oil is no longer needed for heating. In is high within the cooperative. The diverse and addition, each euro spent will remain in the region and applicable professional skills of the members of the boosts local economy. Multiplier effects considered,

62 63 the impacts of Eno Energy Cooperative on regional important not only in order to maintain the operator’s economy are signifi cant. In addition, the profi tability of motivation, but also to secure the cooperative’s future. the company has been among the best in the fi eld in North Karelia. Careful selection of the heated properties is an important part of the enterprise’s profi tability: single houses located too far from the heating plant are not Benefi ts for the local usually suited for this kind of endeavour. Pricing must be competitive in comparison to other options. community The traditional values of cooperative activities – From the community’s point of view, the cooperative communality, openness, and equality go hand in can be said to have created positive activities in Eno. hand with profi tability. Locality and teamwork are In accordance with the values of the cooperative resources that are refl ected in all aspects of the model, Eno Energy Cooperative wants to participate in business. A positive approach and working together promoting the development of the local community. are among the factors that have been used effi ciently One means to achieve this is to support the work of in Eno. Networking and fi nding the right people as local associations with grants and to refer the visitors key persons have been vital for the success of the to the cooperative to visit local cafés and craft shops. enterprise. Cooperation has taken the enterprise far and respecting the opinions of the local community The open and active approach of the cooperative to has made it possible for Eno Energy Cooperation working is refl ected to its surroundings. With regard to develop a business model that benefi ts the local to the wellbeing of the community, cooperative economy, and that the entire locality can be proud of. operations have achieved, for example, the will of It truly sets a fi ne example to all new cooperatives. the locals to work together and increased openness within the community. Based on surveys conducted by the cooperative, customer satisfaction in Eno is high Eno Energy Cooperative and the customers are proud that their properties are heated with renewable energy. Eno, Joensuu Industry: production and distribution of district heating and cooling The source of the Turnover: over one million euros enterprise’s competitive www.enonenergia.fi edge

The success of Eno Energy Cooperative shows that cooperative activities can be both profi table and benefi cial to the local community. Profi tability is

64 65 THE PUBLIC SECTOR NEEDS SERVICE Social innovations produce Some modern examples of social innovation include new business models the combination of technological and social or societal INNOVATIONS needs. This results in interesting applications aimed at the elderly, or visually impaired, for example. A The concept of social innovation is often associated technological application which facilitates day-to-day with the business activities of social enterprises. Social tasks for people who are visually or hearing-impaired, innovations are products, services and models that or who have limited mobility, is an example of a social correspond to social needs more effi ciently than the innovation. competing alternatives, and create social relationships and forms of cooperation. In order to be able to utilise a social innovation, it is important that the end result is more than just tax In Finland, the concept of social innovation has revenue and other economic wellbeing. The objective traditionally been seen as parallel with wellbeing, of social innovation is societal development, from education and healthcare related operations and an administrative or service-based perspective. The services provided using public funding. These include development and enhancement of the public sector day-care, paternal leave, the maternity package, free can create savings in tax revenue and private sector school meals, fi nancial aid for students and maternity operations can be used to indirectly achieve the same clinic services. In addition to administrative or socio- results by both producing tax revenue and increasing political innovations, which change the structure of wellbeing. society, a social innovation may also be some form of invention. Challenges can be faced by offering a better alternative to existing services that are produced by society. A In this publication we have chosen to focus on the genuine improvement in people’s quality of life and concept of social innovation with regard to business the facilitation of daily life are the cornerstones of activities. This means innovations that create social social innovation. Ultimately it is insignifi cant who good through economically sustainable business is responsible for the utilization of the innovation, as activities. Social innovations concretely increase long as the aforementioned values are the objective. wellbeing, not just indirectly through economic Our society faces many challenges, which can be met wellbeing. The idea of social entrepreneurship in by developing business activities or by modifying itself is a social innovation. It is expected to function administrative or service structures. An especially as one tool for the removal of weak points in society important requirement for the creation of a social discrepancies and to produce social good; new social innovation is a problem or challenge to which our innovations. society does not yet have a simple solution.

66 67 TURNING LEFTOVERS INTO AATT TTHEHE VAAJAKUMPUVAAJAKUMPU SCHOOLSCHOOL ININ JYVÄSKYLÄ’SJYVÄSKYLÄ’S VVAAJAKOSKIAAJAKOSKI A SOCIAL INNOVATION DDISTRICT,ISTRICT, TTHEHE SCHOOLSCHOOL CCHILDRENHILDREN HHAVEAVE JJUSTUST FFINISHEDINISHED TTHEIRHEIR

CASE LLUNCH,UNCH, BBUTUT TTHEHE LLEFTOVEREFTOVER FFOODOOD IISS NNOTOT RREMOVEDEMOVED FFROMROM TTHEHE LLINE.INE. IINN FFACT,ACT, JUSTJUST TTHEHE OOPPOSITE:PPOSITE: TTHEHE SSTAFFTAFF PPUTUT AALLLL TTHEHE FFOODOOD TTHATHAT WWASAS NOTNOT EEATENATEN IINTONTO OONENE LLINE.INE. AATT TTHEHE SSAMEAME TTIME,IME, A GGROUPROUP OOFF PPEOPLEEOPLE GGATHERSATHERS BEHINDBEHIND THETHE CANTEEN’SCANTEEN’S GLASSGLASS DOORS.DOORS. TTHEHE GGROUPROUP CCONSISTSONSISTS OOFF SSENIORS,ENIORS, FFAMILIESAMILIES WWITHITH CCHILDRENHILDREN AANDND PPEOPLEEOPLE OFOF WORKINGWORKING AGE.AGE. ONON THETHE DOORDOOR ISIS A SIGNSIGN READINGREADING ”WE’VE”WE’VE GGOTOT SSOMEOME FFOODOOD LLEFT,EFT, PPLEASELEASE FFEELEEL FFREEREE TTOO EEATAT LLUNCH”.UNCH”. SSOO WWHATHAT OONN EEARTHARTH IISS GOINGGOING OON?N? RREADEAD OONN TTOO FFINDIND OOUT.UT.

Cost-eﬃ cient catering Menu rotation as a planning services tool

Kylän Kattaus is a public utility owned by the City of Vaajakumpu school has around 500 mouths to feed Jyväskylä, which provides catering services for the daily, and the majority of these are school pupils. The area’s day-care centres, schools and care homes for the school’s canteen uses a six-week menu rotation period. elderly. The non-profi t utility was established in 2004. Food for the children is reserved in kilos rather than It aims to provide food that meets pre-determined portion size, since the consumption of various dishes nutrition criteria cost-effi ciently. During competitive varies quite a lot. This practice was decided on based bidding, the City of Jyväskylä determined a price on long-term experience. In primary schools especially, level, which in practice dictates the budget available the amount of food consumed and the portion sizes per meal. Kylän Kattaus prepares around 23,000 depend largely on the dishes served on the day. lunches daily and these are served in approximately More pasta bake is consumed than cabbage soup, for 100 cafeterias and canteens. One of Kylän Kattaus’ example. When raw ingredients are ordered by the kilo, branches is located at the Vaajakumpu school, which the possible loss is kept smaller than when ordering by in autumn 2013, began to implement a new kind of portion. business model aimed at a reduction in biowaste. Let’s fi rst take a look at some background information. The menu rotation facilitates order management. The information from previous orders is always compared to actual consumption. If there was too much of a product the previous time, the quantity of the relevant raw ingredient can be reduced on the next order.

68 69 Equally, if there wasn’t enough of a particular food When preparing food, the most important factor in last time, it’s possible to increase the quantity on the managing loss is the professional skill of the kitchen next order. Through careful monitoring, it’s possible to staff. You also need a dash of creativity. Food at the infl uence the amount of food that is left over early on Vaajakumpu school is prepared with the mentality that in the order phase. no perfectly good food is thrown away; instead, raw materials are put to the best possible use. Unheated food, which is left over, is frozen and used later on. Customer surveys and menu The amount of food left on plates - that is, food that development the children throw away - is best tackled through the right attitude. Children often copy adults, so the If they so wish, customers are able to give input teachers set an example for the children at lunchtime concerning the food that is served. Customer surveys and can encourage the children not only to take a have been organized in all Kylän Kattaus kitchens. In suitable amount of food, but also to fi nish everything schools, a favourite food day is organized several times on their plates. Vaajakumpu school has also tried out a year, and students can suggest food in advance. various campaigns to reduce the amount of food left However, pizzas, hamburgers and other fast foods are on plates. These include themed weeks, when the not an option; the food has to be healthy and produced children are encouraged to pay attention to eating from quality raw ingredients. The school also contains everything on their plate. Occasionally the biowaste a children’s parliament, which proposes the children’s containers are removed completely from the canteen, ideas and wishes concerning the development of which has encouraged children towards better eating school food. Component salads, served separately by habits. In addition, there is also real-time monitoring ingredient, were taken into use in this way. of the amount of biowaste on the school’s notice board. These campaigns have produced good results, and the amount of plate-loss at the Vaajakumpu school Active loss management has been reduced to around one kilogram of food per day. Most of this is peel or some other kind of true Loss is unavoidable in large-scale kitchens, but we biowaste. can still aim to minimize it. In addition to the menu rotation at the Vaajakumpu school, efforts are also The amount of loss pertaining to food served - or made to manage loss through monitoring, training serving loss - is tackled through timing concerning and catering. The school monitors portion sizes, food replenishment of the food line. Extra food is warmed preparation and loss, as well as popular foods. Weekly up during lunch and more food is put out on the monitoring gauges the amount of biowaste produced, serving line only when necessary. Unheated food can for example. There are many factors outside of the be used in meals for the following day. According to school canteen’s control, which nevertheless have an regulations set by the Finnish Food Safety Authority effect on loss, such as the weather. In good weather, Evira, heated or hot food must be served within four the children rush out to play and not much time is hours of it being heated. The daily number of diners spent on eating, as it is in poor weather. in such a large unit is diffi cult to predict and even if

70 71 order monitoring and loss management are carried homes for the elderly is sold to the public at a cost food to be of good quality and nutritious. For many Perhaps in the future the customer base of primary out fl awlessly, there is still always some food left over. price subject to VAT. A trial began in summer 2013 at local residents, lunch at the school has become a daily schools and other catering services produced through Vaajakumpu school has begun to serve this leftover the City of Jyväskylä’s Keljo care home and in autumn routine. tax revenue will widen all over Finland. The idea, food to local residents. it was extended to the Vaajakumpu school, so that developed in Jyväskylä, has encouraged discussion the idea could be tested in different environments. In Kylän Kattaus’ new service model has not caused any all over the country and has even been discussed both cases, permission for the trials was obtained from additional costs. The sold lunch is subject to a fee, in parliament. The Vaajakumpu school acts as an Utilizing serving loss as a both the school and care home management and from which covers the costs of a visitor. In practice, this example on how innovative thinking can prevent the canteen staff. means bread, butter, a drink with the meal and the creation of waste and save resources. We can also have new innovation washing of plates and cutlery. The new model has an impact on the public image of school lunch through not caused any additional work for the staff at the such action. Finnish school food is of good quality Kylän Kattaus’ service manager Paula Puikkonen came Trial experiences Vaajakumpu school, either. During lunchtime the staff and nutritious, as proven by a visit to the Vaajakumpu up with the innovative idea of selling leftover food to take care of cleaning the serving line and after lunch, school. diners unassociated with the school. The idea was to The loss trial at the Keljo care home did not succeed in the leftover line is cleaned. Food is only sold when it is develop a working model to utilize usable food that the desired manner since customers pay for the meals left over and the serving of food at an affordable price would have otherwise ended up as biowaste. sold at the canteen. As a result, a meal consisting of does not increase the amount of food ordered for the leftover food and sold at a lower price meant fewer school. The model is simply a way of utilizing usable In all of Kylän Kattaus’ restaurants, tens of thousands customers paid for a normal-priced lunch. At the food that would otherwise end up in the biowaste of kilos of loss are produced per year, which is Vaajakumpu school the situation was different since container. around ten per cent of the total food prepared. Of the children do not pay for their school meal. Instead, this amount, the majority is serving loss that can the catering service is produced using tax revenue. It be utilized. Compared with national surveys, Kylän was decided to exclude the school staff , who pay for Success through social Kattaus restaurants are doing well and the amount their own lunches, from the trial. After a two-week of loss is already small. This was achieved through trial period, the decision was made to continue the innovation active measures aimed at reducing such loss. When activities until further notice. it comes to large-scale catering, however, even a The service model developed by Kylän Kattaus is an small percentage loss means an enormous amount of The Kylän Kattaus service model has received real excellent demonstration of social innovations that can biowaste. positive feedback from the Vaajakoski district. The be developed and refi ned into a small-scale business canteen receives around twenty visitors per day and activity by anyone. In the case of the Vaajakumpu Catering service Kylän Kattaus Since Evira’s regulations do not permit the sale the amount of leftover food has mostly suffi ced. From school lunches, the aim is not to make money, but of once-heated food, Puikkonen decided to take a interviewing the lunchtime diners it’s clear that for instead to prevent the production of biowaste and to Jyväskylä different approach. If the sale of leftover food outside several people, lunch has become a socially important simultaneously offer local residents the opportunity to Established in 2004 of the canteen is not permitted, why not serve the food event. For many seniors or other people who live enjoy an affordable lunch. in the canteen for a small fee? alone, lunch at the Vaajakumpu school is their only Industry: Staff catering opportunity to get out and meet people and exchange Paula Puikkonen, who came up with the model, has www.jyvaskyla.fi /ruokapalvelu The idea was further refi ned by the ”Towards resource pleasantries. And the walk from home to the school one idea to extend the trial. In care homes for the wisdom” project, carried out in cooperation between is a nice form of exercise. For men who live alone elderly, leftover food could be served to volunteers who the City of Jyväskylä and Sitra - The Finnish Innovation especially, lunch may be their only warm meal of the visit the residents daily to take care of their wellbeing. Fund. A service model was developed whereby food day, and without this social innovation they might not This would mean that volunteers would receive and side dishes leftover from lunch at schools or care eat a hearty meal at all. All of the visitors found the something small in return for their valuable work.

72 73 CHANGING NEEDS OPEN NEW DOORS FOR Changes in service structure Organic products are gaining popularity ENTREPRENEURIAL ACTIVITIES As social service structures change, opportunities arise for social entrepreneurship. In some cases, Many customers want to pay for products and the outsourcing of services and reductions in social services, which are in line with their values. They take interactions, have created situations whereby not all environmental and natural protection into account of people’s needs and wishes are necessarily met. when making a purchasing decision. The consumption Since people still wish to be served personally, social of organically produced foodstuffs in Finland has enterprises can also make use of this opportunity by increased moderately in recent years, though overall offering good service on a customer-oriented basis. sales make up just a small percentage of all foodstuff sales. Organic production’s strengths are based widely For example, pensioners will have an increasing on an image of the products’ quality and as a healthier amount of money to spend and are ready to use that alternative compared to mass-produced foodstuffs. money on various services and social interaction. The demand for tourism services and various activity Customer interest in the origin of their food has holidays can increase as older baby boom generations increased. This societal theme has emerged as a result retire. The corporate values of service providers who of discussion on locally sourced food. Locally sourced serve pensioner groups and associations can be vital food is not just an ethical choice; customers wish to selection criteria. Social enterprises can develop new become closer to food producers. As a result of the kinds of services for these target groups, such as creation of social relationships, people approach food tourism, exercise, wellbeing and home help services. from various perspectives. Raw ingredients sourced directly from farms increase the appreciation of food, since the customer knows how the food was produced.

Large goods suppliers and retailers have responded to growing demand. Almost all shops stock organic and locally sourced food, and the amount of organic products is increasing constantly. Restaurants have also woken up to the increase in demand and the Steps to Organic programme, which aims at increasing the use of organic products in professional kitchens, has received widespread popularity in Finland. New operating opportunities are arising for social enterprises as a result of market change. Next we would like to present a social enterprise, which provides catering services in popular cultural sites.

74 75 AN ETHICAL CATERING SUCCESS STORY FINLAND’S MOST SIGNIFICANT CULTURAL SITES, LIKE SIBELIUS HALL IN LAHTI, THE HELSINKI OPERA HOUSE OR THE NATIONAL

CASE MUSEUM OF FINLAND, REQUIRE THE COMPANY IN CHARGE OF CATERING TO BE OF CORRESPONDING STANDING IN ITS OWN FIELD. AND WHO COULD BE A BETTER PARTNER IN COOPERATION FOR THESE SITES THAN THE SOCIAL ENTERPRISE KANRESTA OY, WHICH HAS OVER TWENTY YEARS OF EXPERIENCE IN ETHICALLY MANAGED CATERING?

Antti Rosenberg has acted as the managing director of History the Finnish Association for Public Health since 1991. It was his idea to develop restaurant services alongside Kanresta Oy is a social enterprise owned by The the cafés. For competitive reasons, it was decided to Finnish Association for Public Health. The Finnish organize restaurant operations into an entrepreneurial Association for Public Health’s member organizations format. And that is how Kanresta Oy was born. are the Foundation for Paediatric Research, the Finnish Association for Mental Health, the Finnish Heart The enterprise’s fi rst restaurant was established Association, and the Central Union for the Welfare of along Highway 1 at the Muurla Glassworks factory the Aged. The Finnish Association for Public Health outlet, from where business activities began to spread. is a non-profi t association, which focuses on fund- Antti Rosenberg, managing director of the Finnish raising for its member organizations. With funds Association for Public Health, has also acted as the raised, the member organizations support public enterprise’s managing director since its establishment. health, paediatric and mental health work, the health Rosenberg’s personal vision for the development and and wellbeing of the elderly in Finland and the expansion of the restaurant services has brought prevention of heart diseases. The work carried out by success. the Finnish Association for Public Health’s member organizations for the good of society is both important and nationally recognized. The association is one of About the enterprise’s Finland’s largest charity and non-profi t organizations. operations The services provided by the Finnish Association for Public Health stretch back decades. In the 1960s, Kanresta Oy provides restaurant and catering services the association began to maintain hospital cafés all over Finland. The restaurants are mostly located in around the capital region. It took a larger step towards public facilities and provide high-quality food services business operations at the beginning of the 1990s. in places such as Heureka in Vantaa, the Opera House

76 77 and National Museum of Finland in Helsinki, the Restaurant activities have Individuality is a There is much talk about the quality of food. At the Kuopio airport and in Sibelius House in Lahti. From the social impact competitive advantage same time, there is discussion on how to offer more start of 2014, the enterprise will manage the largest organic or locally sourced food to customers who want restaurant in Finland, located in Finlandia Hall. The social enterprise’s values are present in daily Kanresta wishes to distinguish itself from its it. The quality food services provided by Kanresta operations. In line with its values, Kanresta wants to competitors through individuality. The restaurants are show that if they so wish, restaurants are able to offer The enterprise’s strategy is to operate in places be assured of the sustainability of each of its goods not chain-managed, so the restaurants’ head chefs organic products in a unique way and thereby perhaps where people seek exciting experiences and have suppliers. Managing Director Rosenberg meets the make the decisions on what foods are served in each gain a competitive advantage. high expectations of the restaurant and food. A executive management of each new goods supplier in restaurant. This manifests itself to the customers as comprehensive service experience and smooth person, in order to ensure that the operations of the individual menus, and meals that vary according to The Finnish Social Enterprise Mark awarded to cooperation with the property owner are important supplier also meet criteria and are appropriate. For season and an individual customer loyalty programme. Kanresta by the Association for Finnish Work is a to the enterprise. Various themes for restaurants are the customer this means that the products offered demonstration of the recognition that the company’s planned together in cooperation. The restaurant at in Kanresta’s restaurants are safe and ethically Fair trade products hold a signifi cant position in the operations are sustainable and result in social impact. the Finnish National Opera House, for example, could sustainable. Where possible, attempts are also made to enterprise’s restaurants. The restaurants strive to use The mark is important to the company, and it is revolve around an on going performance. favour Finnish raw ingredients due to their freshness them as much as possible. In addition, the enterprise proudly displayed in all its restaurants. When dining and quality. also aims to use organic and locally sourced food at a Kanresta restaurant, the customer can be sure where it can. Challenging economic circumstances that his or her money is going to a good cause; the Social objectives Transparency in this enterprise’s case means that have had an infl uence on customer demand, however. promotion of public health. both interest groups and personnel are told openly Organic and locally sourced products are slightly Kanresta’s social objectives go hand-in-hand with about the enterprise’s operations. The personnel are more expensive to order, so the customer also pays a its business objectives. Its business activities aim at informed about how the enterprise’s profi ts are used. higher price for them. In times of austerity, demand making a profi t, which is then channelled in full to the The enterprise is also happy to tell other interested often focuses on a cheaper alternative. However, Finnish Association for Public Health and then on to its parties about its activities and operations. For Kanresta’s principle is to offer an organic option and member organizations. customers, transparency means that all ingredients several restaurants are involved in the Steps to Organic Kanresta Oy in the meal they have just enjoyed can be traced back programme, which commits to promoting the use of Helsinki The profi ts earned by the enterprise bring about social to the very beginning of the production chain, and the organic ingredients in restaurants. impact via the member organizations of the Finnish customer can receive information about who produced Established in 1994 Association for Public Health. The Foundation for the raw ingredients. Industry: restaurants Peadiatric Research, for example, awards grants to Ethical restaurant researchers and has therefore promoted research into Kanresta wants to be a reliable employer to its staff. Revenue over 20 million euros paediatric illnesses in Finland. As such, the profi ts In accordance with its human resources strategy, operations www.kanresta.fi produced by the enterprise are channelled into a good Kanresta wishes to have its employees commit to the cause. enterprise in the long-term through various personnel Kanresta has quietly grown into one of Finland’s benefi ts. This not only increases a sense of community, most signifi cant restaurant chains. It has expanded but also motivates the staff to work for the benefi t of its operations step by step. As revenue has grown, so the enterprise. Though the use of a leased workforce has the profi t channelled to its owners. The Finnish is common in the restaurant business, Kanresta aims Association for Public Health has benefi tted greatly to use it as little as possible. This is how Kanresta from Kanresta’s operations. demonstrates social responsibility and that it cares for its staff.

78 79 HAND-MADE PRODUCTS ARE VALUED IN FINLAND Finnish design and The appreciation of hand-made products has handicrafts increased recently. Many interior design and lifestyle magazines are happy to promote hand-made solutions, which show characterful signs of being Handicrafts, arts and crafts, craft design, and art and hand-made. Nowadays, many hand-made products design. These terms all overlap in places. But what are even thought of as luxury products. This era could they all have in common is doing by hand. Handicrafts become a ”golden era” for Finnish handicrafts and are often thought of as a hobby, but they can be a design. Though perhaps not on the same scale as in method of manufacturing a commercial product and the 1950s-1960’s, an increase in the appreciation of as such, a business activity to be taken seriously. handicrafts is taking place on a national level.

In earlier times, the task of craftsmen and artisans On the other hand, craftsmen and -women will was to make items needed in daily life, such as continue to ﬁ ght mass production and popular brands kitchenware. In the era of industrial production, in the future. It is important to learn the ”commercial it is possible to purchase almost anything from a language” and to make the masses aware of your supermarket. Many artisans and designers have had skills and products. Despite this challenge, for many to ﬁ ght for their livelihood with large, international networking and network-based business models have enterprises. As the standard of living has increased, produced the desired results. A good example of this people have wanted to procure as much as possible, is the Home Crafts product brand launched by Taito which means that a low price has been a vital factor in Pohjois-Karjala Oy, which has gained recognition the customer’s purchasing decision. outside of the province. In addition, we also need other forms of support from the private, public and third Our society is in a transition phase between the era of sectors, which recognize and value what people can mass production and an era that values authenticity, do. The next example of an enterprise describes a sales earthiness and ethical production methods. What chain, which distributes products made by small-scale else could explain the sharp growth in demand for craftsmen and women to customers all over Finland. organic products in Europe, for example? Old factory halls worldwide have been renovated into handicraft workshops where each shop specializes in the production of different products. One is specialized in making unique furniture, another in leatherwork.

80 81 FINNISH HANDICRAFTS AND SOCIAL IMAPCT SSEVERALEVERAL FINNISHFINNISH CCITIESITIES AARERE HHOMEOME TOTO A TAITOTAITO SHOPSHOP OUTLET.OUTLET. TTHEHE STORESSTORES AREARE KNOWNKNOWN FORFOR TTHEHE CHARACTERFUL,CHARACTERFUL, LOCALLYLOCALLY

CASE PPRODUCEDRODUCED FFINNISHINNISH HHANDICRAFTSANDICRAFTS TTHEYHEY SSELL.ELL. TTAITOAITO MMYYMÄLÄTYYMÄLÄT OOY,Y, WHICHWHICH COORDINATESCOORDINATES SSALESALES OOPERATIONS,PERATIONS, VVALUESALUES FFINNISHNESSINNISHNESS AANDND LLOCALOCAL WWORK.ORK.

Promoting Finnish Education and handicraft stores have remained Taito’s core activities throughout its history. As handicrafts for over 100 Finland joined the European Union in the early 1990s, years the organization began intense work to develop handicraft entrepreneurship. It was at this time Taito Myymälät Oy was established at the turn of the that a project was launched to develop the Taito millennium, but its roots go far back into history. At association’s marketing channel, and was funded by the start of the 20th century, agricultural associations the Ministry of Employment and the Economy. As a founded cottage industry associations all over Finland result of the project, six regional Taito associations (hereafter referred to as Taito associations). At ﬁ rst, and the enterprises that own them established the the associations’ objective was to train the rural joint enterprise Taito Myymälät Oy in 2000 to develop population, both to increase income and to maintain and coordinate sales and marketing. The enterprise handicraft skills. The associations opened up stores in is owned by sixteen Taito union member associations towns and cities, which sold handicrafts typical to the and enterprises. In 2012, the Association for Finnish region. Work awarded Taito Myymälät Oy with the status of Social Enterprise. Käsi- ja taideteollisuusliitto Taito ry (hereafter referred to as the Taito union) was established in 1913 and acted as a central organization for the regional About the enterprise’s associations. Members of the Taito union are regional and independent Taito associations, of which there are operations around twenty in Finland. The Taito union’s combined task and operating principle is to promote the Finnish Taito Myymälät Oy aims to promote the success and handicraft culture as both a skill and a livelihood. sale of Finnish handicraft and craft design products. Its The union’s most visible brand, the Taito Shop chain, business idea is to offer its owners help in marketing operates in around 22 municipalities in Finland. and developing sales operations, and to increase The organization distributes information nationally cooperation between stores. Stores operating under through its taito.ﬁ website and the Finnish handicrafts the Taito Shop brand offer a diverse range of products magazine Taito. made by local handcrafters and handicraft enterprises.

82 83 Some products can be found in all Taito Shop stores. Business activities have Each store is an independent business unit and store social impact managers are responsible for the operative activities of the store. Taito Myymälät Oy’s operations’ social impact is created through its business activities. For many Taito Myymälät Oy’s seven-member board consists of small entrepreneurs, the Taito Shop stores act as the representatives of owner enterprises who elect a chair only professional sales channel they have. Products from amongst themselves. Hannele Heikkinen, the sold through the Taito Shop stores generate income managing director of Taito Keski-Suomi ry, has acted to hundreds of manufacturers in Finland. Without as chair since 2011. In addition to her administrative a national handicrafts sales chain, it would have tasks and chair duties, it is also her job to coordinate been difﬁ cult for many skilled handcrafters to sales operations and organize store care days. In 2013, enter the markets. The Taito Shop stores give new Taito Myymälät Oy decided to invest in a shared online entrepreneurs the opportunity to test sales and to store platform. A future objective is for all stores in receive entrepreneurial advice concerning product the organization to participate in the Taito Shop chain development. Customer feedback and the store cooperation. manager’s professional skills are forwarded on to entrepreneurs so that the products can be further reﬁ ned and achieve better commercial preconditions Social enterprise values to enter larger markets.

In accordance with the enterprise’s social objectives, Social impact is also brought about through Taito Myymälät Oy’s and Taito Shop stores’ profi ts are employment. Some of the Taito Shop stores offer used entirely to promote small-scale entrepreneurship, work to those with disabilities and in long-term handicrafts culture and handicrafts in Finland. unemployment via pay subsidies. Taito Myymälät Oy chair Hannele Heikkinen believes that one important Openness and transparency are important values in task for a social enterprise is to employ people who Taito Myymälät Oy’s actions. The enterprise openly are otherwise in a weak position on the employment tells of its operations to all interested parties and markets. Employees receiving pay subsidies fi nd the has no business secrets. The manufacturing chain store work interesting and it has helped them back of Taito Shop products is transparent to customers into employment. The Taito Shop stores also employ and the people behind the products are presented trainees and for many young people it is their fi rst in marketing. The products are marketed placing experience of working life. emphasis on the fact that the Taito Shop does not manufacture the products, but are instead made by handicraft enterprises or by skilled individuals.

84 85 The story behind the brand The Social Enterprise Mark has had an effect on the are in working with her. There have been a lot of entrepreneurship that achieves a lot of good for society Taito Shop chain’s brand. After receiving the right to positive developments in the service attitudes of Taito and promotes Finnish handicrafts. Few enterprises Lots of work has been carried out on the Taito use the mark, the enterprise focused on creating a Shop stores since the enterprise received the Social can say that all of their profi t is put towards social Shop brand over the last decade. Taito Shop differs story through which to openly present the enterprise’s Enterprise Mark. Working at the Taito Shop is perceived objectives. Taito Myymälät Oy sets an example to show signifi cantly from other gift shops. Characterful values. After receiving the mark and developing the as enjoyable due to the enterprise’s social objectives. that a social enterprise owned by associations is a products with a story and identity are an important brand’s story, the enterprise realized how valuable functional way of organizing associations’ business part of the product range. Amongst its customers, Taito Taito Myymälät Oy’s work is. The values of the social activities in a manner that is not only fi nancially Shop is known for its high-quality and local product enterprise are visible to its customers on noticeboards Entrepreneurship as a profi table, but also socially sustainable. range. The products are perceived as ethical and in the Taito Shop stores. In purchasing a product from sustainable. As far as possible, marketing strives to Taito Shop, which bears the Social Enterprise Mark, developer of associations’ highlight that the products are manufactured by small the customer can be sure that their money will be handicraft enterprises. channelled into a good cause. service production

As such, small size is the Taito Shop chain’s strength. In recent years, actors in the third sector - that is, Through its extensive network of enterprises, the Information on the origin of associations and societies - have become increasingly stores can order small quantities of products and interested in the development of business activities. then deliver them fl exibly to customer. This forms a products increases openness Product sales and service operations subject to signifi cant competitive advantage and stores can react fees open up new opportunities for associations quickly to customers’ wishes. The aim is, however, to Increased openness, in part due to the Social and strengthen their fi nancial position. Social maintain a wide range of various handicrafts so that Enterprise Mark, has seen customers become more entrepreneurship is very suitable as a business model customers fi nd the stores’ range interesting. Stores’ interested in the origin of products. Though the Taito for third sector actors. Social enterprises’ and non- Taito Myymälät Oy operations are developed through customer feedback Shop bears both the Key Flag and Social Enterprise profi t organizations’ operations are very similar with and suggestions for new products are forwarded on to Mark, not all of its products are made in Finland, regard to values and objectives. Transparency, fairness Jyväskylä the product manufacturers. and customers wish to know the producer behind and social objectives are common goals shared by Established in 2000 the product in the same way as they do for Finnish associations and social enterprises. products. Industry: other store management The Social Enterprise Mark Taito Myymälät Oy and the Taito Shop store chain were consulting Amongst staff, the Social Enterprise Mark has established to develop the service and store operations The coordinator company Taito Myymälät as a marketing tool helped employees to understand that the aim of the of regional Taito associations. At the same time it has Oy has a turnover under 100,000 euros enterprise’s operations is to do good and support become a signifi cant sales channel for many small Taito Myymälät Oy was awarded a Social Enterprise entrepreneurship in small enterprises in Finland. entrepreneurs. Social enterprise values and third The Taito Shop chain’s total combined Mark in December 2012. In addition to Taito Myymälät The enterprise’s approach to goods suppliers has sector actors’ objectives combine smoothly with turnover is approx. 3.5 million euros Oy, the local Taito Shop stores, which are linked with become more open and product launches are planned www.taitoshop.fi Taito Myymälät Oy’s operations through a cooperation together with small entrepreneurs in more detail, agreement, are also entitled to use the mark in their than previously. Marja-Leena Tenhunen’s Personal marketing. The use of the mark has to be connected Design Hat Oy produces products that are sold in the to the ”Taito Shop. Where the producer matters” Helsinki Taito Shop store. She gives the Taito Shop -principle. employees top marks for how open-minded they

86 87 ENTERPRISES THAT ARE ABLE TO SATISFY THEIR CUSTOMERS WITH CUSTOMER-ORIENTATION AND EXCELLENT PRODUCTS OR SERVICES ARE THE ENTERPRISES THAT SUCCEED. COMPETITIVE ADVANTAGE, THROUGH WHICH AN ENTERPRISE INDIVIDUALITY AS A COMPETITIVE DIFFERENTIATES ITSELF FROM ITS COMPETITORS, IS A KEY CONCEPT. THE AIM OF THIS CHAPTER IS TO CONSIDER HOW COMPETITIVE ADVANTAGE METHOD FOR SOCIAL ENTERPRISES CAN BE CREATED WHILST BEARING CUSTOMER-ORIENTATION IN MIND. THE OBJECTIVE IS TO ENCOURAGE IDEAS FOR PLANNING ENTREPRENEURSHIP REGARDLESS OF THE ENTERPRISE’S SIZE OR INDUSTRY. THE CONTENT OF THIS CHAPTER IS FAIRLY THEORETICAL BUT IT IS CERTAIN TO OFFER SOMETHING THAT EVERY ENTERPRISE AND ENTREPRENEUR CAN APPLY TO HIS OR HER OWN SITUATION.

Knowing your customer and selecting a target group Focus on the customer is key when planning successful operations. A single enterprise cannot serve everyone, nor should it. An Globalization and the development of technology have enterprise has to know its customers and choose made the world a smaller place. Today it is fast and customer segments which are not only the most easy to order goods and services from the other side productive, but also reachable. From a business point of the world using the internet. Though many Finnish of view, the profi t margin - that is, the enterprise’s companies have suffered as a result, globalization has profi t from products or services - is of primary also brought with it many new opportunities. Only importance, perhaps even more important than the best can survive in this competition, but how the management of sales quantities. The enterprise can a social enterprise make customer-orientation a must also communicate actively with its customers competitive advantage? and clearly outline its value proposition. As a value proposition, customer-orientation should also be It is well worth investing in the development of written into the enterprise’s business plan and vision customer-orientation as soon as you establish in order for all interest groups to be aware of it. an enterprise. This begins with the entrepreneur and founders of the enterprise, who should adopt It is important to know both the enterprise’s own customer-orientation as a company value alongside situation and the competitive situation so that the the fulfi lment of a social task. If necessary, it is a good enterprise can fi nd itself a position in the market. The idea for the enterprise to create a customer database objective is to serve customers better than competitors and make sure that it is up-to-date and provide user and thereby increase the value experienced by the training. Other procedures aiming at competent customer. It is well worth investing in customer customer management such as customer and market relationship management, since a good customer surveys are important tools for an enterprise when relationship increases customer loyalty and has a sounding out markets. positive effect on turnover and profi t. A loyal customer

88 89 is a profi table customer, and it is often said that 20 seriously. Some enterprises take a positive approach to a new service or product. It is important to tell the Opportunities of per cent of customers produce 80 per cent of turnover. their mistakes. When an enterprise is active, mistakes customer that you are the fi rst of your kind and make internationalization The management of key customer relationships is are unavoidable, but it must be possible to correct a lasting impression. A successful product or service therefore a path towards more profi table business. them and learn from them. must offer genuine benefi ts at the right price. Behind Internationalization has become an essential part of every pioneering product is a distinct idea. entrepreneurship. Even small enterprises’ customer If an enterprise’s customers are other companies, it is Customer-orientation is effective in all industries, bases may include several international customers. of the utmost importance to manage wholesale and especially those in which the competitors have Market leadership is one of the strongest fi elds of Almost every store sells something from abroad. Since redistribution networks well. Customer relationship not invested in customer-orientation suffi ciently. differentiation. Customers consider market leadership the 1990s, the value of importing has tripled while the management is of increased importance in business to In this way, a social enterprise can obtain one to be clear proof of a brand’s quality. There are a huge value of exporting has doubled. business markets, and many small enterprises in these more competitive advantage by investing in the number of service and business categories, so the markets can fi nd themselves very dependent on just improvement of customer orientation. enterprise should set off to fi nd a suitable one for Internationalization and the simultaneous a handful of larger customers. The loss or gain of just itself. How about the largest social enterprise selling development of technology have created plenty of one customer can have a colossal effect on turnover. ethically produced products in Finland? opportunities for Finnish companies. It is now easier Standing out on the markets to market products worldwide. It is possible to serve From a marketing perspective, a strong brand and Many enterprises have a long history behind them. customers 24/7 online and there are more alternatives brand equity are key to customer-orientation. Brand One point of departure for successful business Enterprises founded in the last century can often fi nd than ever before. equity is generated through customer experience, operations is to stand out in the markets. The interesting stories from the past to tell customers. the familiarity of an enterprise or product, brand objective is to give customers a better and more Younger enterprises, too, can also make use of A social enterprise can achieve a competitive loyalty and image. It is well worth investing in the lasting impression of the enterprise than competitors their histories when trying to stand out. For many advantage both through specialization and management of these, as well as in paying attention do. A social enterprise can already stand out from foreigners, Finnish education skills are perceived as internationalization. The following example is of a to customers in everyday operations. Each encounter competitors due to its values – as long as it remembers being of a high level. A social enterprise that sells social enterprise whose products are designed in with a customer is an opportunity for a successful to communicate the values clearly to customers. educational services on international markets can gain Finland and manufactured in Kenya. The enterprise’s transaction or the loss of a customer to a competitor, Differentiation is one of the most important competitive advantage by revealing that the enterprise social objective is to employ people living in if the situation does not go as well as planned. Speed competitive strategies in entrepreneurship, but how is Finnish. Stories can be found everywhere, and developing countries and to promote wellbeing. is often crucial to dealing with negative customer does it work in practice? people like them. How did your enterprise start? feedback and experiences, and the only way to save a customer relationship on the edge. Marketing communications is key when pursuing One marketing tool for making a lasting impression competitive advantage. The enterprise must know is often the ownership of a certain attribute. When Enterprises develop and grow continuously. As such its customers and their needs. The customer must talking about brands of car, everyone associates the it is important to make sure that you do not become be reachable and it must be possible to confer the word ’safety’ with Volvo. It is always repeated in the complacent. Ongoing product development work and enterprise’s values and objectives to the customer. The company’s marketing communications and Volvo has being on the lookout for profi table innovations, as enterprise must be active and control its marketing become a synonym for safety. Social enterprises can well as improvements in service quality, often pay communications on all levels from word-of-mouth to also make use of this marketing method to stand out themselves back in the long-term. Now and again it social media. from competitors. But be vigilant, since customers can be useful to stop and look back: where have we may already associate a certain attribute with another succeeded and what could have been done better? This The objective is for the enterprise to fi nd something company that operates in the same sector. However, Ideas from the following publications have been is referred to as strategic planning, and a year clock that the competitors do not have. One good tool for there is no harm in trying. You might be surprised at adapted when writing this chapter: , ,  model can be of great help here. Enterprises must learn differentiation is to be the fi rst in a certain business how effective this method is! from their mistakes and customers must be taken sector: the enterprise can be the fi rst to commercialize

90 91 FINNISH DESIGN FROM KENYA FFINNISHINNISH DDESIGNESIGN IISS RRESPECTEDESPECTED WWORLDWIDE.ORLDWIDE. CCUSTOMERUSTOMER IINTERESTNTEREST IINN CCHARACTERFULHARACTERFUL PPRODUCTSRODUCTS IISS A TTRENDREND TTHATHAT IISS CCLEARLYLEARLY OONN

CASE TTHEHE INCREASE.INCREASE. ANDAND WHATWHAT IFIF YYOUOU COULDCOULD HHAVEAVE A RREALEAL IIMPACTMPACT OONN SSOCIETYOCIETY BBYY PPURCHASINGURCHASING PPRODUCTSRODUCTS DDESIGNEDESIGNED IINN FFINLAND?INLAND? TTHISHIS ISIS TTHEHE STORYSTORY OOFF MMIFUKO,IFUKO, AANN EENTERPRISENTERPRISE OOPERATINGPERATING OONN TTHEHE HHELSINKI-ELSINKI- NNAIROBIAIROBI AAXISXIS AANDND WWHOSEHOSE SOCIALSOCIAL OOBJECTIVEBJECTIVE IISS TTOO IIMPROVEMPROVE TTHEHE EEMPLOYMENTMPLOYMENT SSITUATIONITUATION IINN KKENYA.ENYA.

Long-term friendship Social impact through

Mari Martikainen and Minna Impiö have known each design products other for ﬁ fteen years. The friends met in 1996 when Finnish design and Kenyan handicraft skills combine they were studying textile design at the Helsinki in Mifuko’s products. Mari and Minna have designed School of Arts, Design and Architecture. After her the majority of Mifuko’s products together. Modern studies, Minna worked in graphic design and Mari was technology allows them to work together on design self-employed doing similar work. despite both living in different countries. Thanks to the internet, they can exchange ideas and opinions in real The idea of establishing a joint enterprise was born time. in 2008 when Minna and her family moved to Nairobi, the capital of Kenya, and Mari went to visit. They Mifuko’s products can be sorted into several categories. came up with the preliminary idea of combining their Products which are mainly manufactured from shared skills in a joint project. In Kenya they saw that recycled materials include high-quality interior the locals were very skilled with handicrafts and were design products, ornaments, bags and jewellery. The competent with various materials. It was clear from enterprise’s social values are visible in the products the start that the business activities would follow as stories. Each product contains a story about the Fairtrade principles and employ locals in Kenya. And enterprise and the person who made the product. that is how social enterprise Mifuko Oy came to be. Its objective is to promote Kenyans’ livelihood and Mifuko’s products are manufactured in local employment through entrepreneurship. workshops in Kenya. Mari and Minna are in direct contact with the workshops without any middlemen. In this way they are able to have an inﬂ uence not only on the quality of the products, but also on the locals’ working conditions. Strict criteria are set for the selection of workshops and child labour, for example,

92 93 is strictly forbidden. This means that production can formed during the women’s studies, and who have be kept transparent and ensures the traceability of opened doors to various art and design events and products. international exhibitions.

Mifuko has around fourteen workshops all over Kenya and they directly employ around twenty employees. The signs of a social The entrepreneurship has achieved positive effects on the employment situation in the area, and all in all enterprise around fi ve hundred people have been involved in the workshop activities. Mifuko’s own company regulations deal with the limited distribution of profi t and based on these the The price paid to Mifuko’s local employees is higher company puts half of its profi ts into projects which than what the workers would receive for their products support employment in Kenya. For this reason, the at the local markets. In this way, Mifuko motivates Mifuko Trust association was founded, through which the workshop employees to carry out high-quality any possible profi t is channelled into various projects. work. Mifuko is also committed to ordering products One project has already been carried out and has regularly from the workshops to provide stability and helped Steve Kine, a blacksmith, who works in the help locals to plan for the future. Kibera slum to procure premises for himself.

For Mifuko, the transparency of a social enterprise Networking is key means that information about the product materials, producer and the price received for the product are Finding suitable workshops in Kenya has required available to all. In fact, many of Mifuko’s workshops long-term networking with locals. In Kenya, business operate in a social enterprise manner by employing relationships are based on contacts, trust and mutual young or disabled people in slum areas. Mifuko also respect. While living in Kenya, Minna was responsible ensures that the workshops invest part of their profi ts for the workshops’ operations and sought new, suitable into the development of working conditions and partners for Mifuko together with a local consultant. operations. Mari on the other hand, is responsible for the enterprise’s operations in Finland. Mari has also visited Mifuko requires its workshops to provide information Kenya several times with the help of support granted on what kind of social work they carry out. One by the Finnpartnership Finnish Business Partnership example is the workshop in Mombasa, which uses programme, to select suitable workshops as partners profi t from Mifuko to train deaf people as artisans in cooperation. and then employ them in the workshops. Many workshops offer their employees a free lunch, which Funded by the Ministry for Foreign Affairs of Finland is a signifi cant benefi t in Kenya. The wages paid to and managed by Finnfund, Finnpartnership was one workshop employees can motivate the workers to of the most important partners in cooperation in the perform at their best; for example, the workshops pay enterprise’s early days. Other important networks have the employees better once they have reached a certain included contacts with the Finnish design industry production quota.

94 95 Internationality Sales and marketing in itself. Other positive infl uences, such as ethics and Transparency is an important value for a social employment are also important to some customers. enterprise. It is important to know the entire Working between two countries requires a lot In addition to international online stores, important Based on the enterprise’s experience, around half of manufacturing process if you want to point out social from a company. Mifuko’s entrepreneurs believe sales channels for Mifuko also include Design Forum customers buy products from Mifuko because of their impacts which arise from product manufacturing. that communication is key to smooth operations. Finland and Reilun Kaupan Tähti in Helsinki. Mifuko design while the other half make their purchasing In many cases it is not enough for subcontractors Nevertheless, problems can occur in production. products can also be purchased from handicraft stores decision based on social impact. to explain how the product was manufactured, and Mifuko has aimed to reduce quality-related problems all over Finland and from Mifuko’s own online store. instead the selling enterprise must be active in visiting by keeping its products the same over long periods of the manufacturers regularly. In Mifuko’s case, the time. The range is renewed slowly, keeping the quality The Association for Finnish Work awarded Mifuko Entrepreneurs’ tips for a entrepreneurs themselves created networks in Kenya of products high. Instead of season-based fashion, with a Social Enterprise Mark in 2012. The mark has and know each supplier personally. In this way, it is the products create an image of timeless and classic, had an effect on the enterprise’s internal values and new social enterprise possible to sell a product to the customer and know sustainable design. is also proof for customers that the enterprise aims to the product’s origin with 100% certainty. act ethically. The mark has also increased cooperation The Mifuko ladies believe that new social The products are manufactured in Kenya and with educational facilities and researchers. The mark entrepreneurs should clearly defi ne their values and The operations of a social enterprise can have a wide transported to Finland by airfreight, which is the also allows for the enterprise’s values to be effectively objectives. Commitment to a limited distribution of range of effects on its society. The employment of fastest way to get the products on the market. Sea marketed to partners in cooperation. profi t is also important. It is worth having a clear story Kenyan artisans is an objective towards which Mifuko freight was considered, but the small quantity of for the enterprise and have a range of products that is carrying out hard work. The enterprise’s activities products and long transportation time mean that it can help to highlight the enterprise’s social objectives. have already achieved many positive effects in Kenya. has not yet been used. Shared freight with other actors Finnish design It sets an example to other social enterprises on what would be possible, but so far import from Kenya to For the practical management of business activities, to strive towards. Finland by other Finnish companies has been minimal. Design is an important part of Mifuko’s products. Mari and Minna recommend enlisting professionals The entrepreneurs are proud of the long traditions of if your own skills are not suffi cient for accounting, for With regard to product sales and marketing, Finnish design, but Mifuko holds all skilfully designed example. It is important to take care of accounting internationality is part of daily life for Mifuko. The products close at heart. In their products, Mari and carefully right from the start to avoid confusion. It is enterprise’s products are sold in online stores around Minna value usability and sustainability, which are easy to spend a couple of working days per week on the world. Visits to international exhibitions are also essential parts of the products’ ideology. basic business activities, such as VAT calculations, so Mifuko Oy part of the enterprise’s marketing strategy. Next on this should be taken into account in how you use your Helsinki-Nairobi the agenda is the Formex exhibition in Stockholm, The unique, handcrafted products are Mifuko’s time. where the largest buyers in Europe search for suitable competitive advantage. African infl uences were sought Established in 2009 products for their ranges. Another important channel from the start. Materials often act as inspiration for Industry: textile wholesale for product marketing to international customers is product design and by knowing the producers’ skills, Social with character the Ambiente exhibition in Frankfurt. the end result can be infl uenced during the design Turnover over 100,000 euros phase. The producers often also send Mari and Minna Though it operates internationally, Mifuko has www.mifuko.fi their own ideas, which have been further refi ned into succeeded in establishing its place amongst Finnish some excellent products. In other words, interaction design industry enterprises. Its characterful products is a two-way street. New products have also been are a colourful and refreshing burst of African developed based on customer feedback. handicrafts. All products have their own store and by purchasing the products, a customer can have a social Mifuko The enterprise’s principle is that if the product is well impact. designed and functional, it becomes highly desirable

96 97 THE SOCIAL ENTERPRISE MARK AWARDED BY THE ASSOCIATION FOR SHOW YOUR SOCIAL ENTERPRISE’S FINNISH WORK HIGHLIGHTS AN ENTERPRISE’S ABILITY TO SOLVE PROBLEMS AND TO ACT AS A BUILDER OF SUSTAINABLE WELLBEING. THE USE OF THE COMPETITIVE ADVANTAGE! MARK IN AN ENTERPRISE’S MARKETING AND COMMUNICATIONS SHOWS THAT THE ENTERPRISE COMPLIES WITH THE SOCIAL ENTERPRISE BUSINESS MODEL SET OUT IN THE CRITERIA FOR AWARDING THE MARK.

Through the use of the Social Enterprise Mark, which Who cares about the Social was launched at the end of 2011, the Association for Finnish Work aims to increase appreciation Enterprise Mark? of and familiarity with social entrepreneurship. Social enterprises are new economic actors. The Social Enterprise Mark is much needed. According Their entrepreneurial operations generate social to the Eurobarometer published in spring 2013, over innovations. Social innovations are especially needed 80% of Finns are interested in an enterprise’s impact in areas affected by strains on society, the economy or on society and the environment. In addition, the natural environment. according to Tripod Research, the number of LOHAS (Lifestyles of Health and Sustainability) consumers is According to the association’s evaluation, a social continuing to increase, and this also applies to Finland. enterprise’s business model should provide something According to the research institution, a third of Finns relating to the following areas: make consumption decisions driven by ethics and ecology, while the greatest obstacle to purchasing was • The reformation of a publicly-funded service a lack of provision. structure, incl. the development of people- oriented care technology and preventative In addition to individual private consumers, other services. enterprises and public sector buyers are also important • Solutions relating to the environmental industry, customer groups for social enterprises. The Association especially with regard to resource efﬁ ciency, the for Finnish Work’s objective is to make the Social use of renewable energy and bio economy. Enterprise Mark a fast and reliable way to tell an • The introduction of creative industry methods enterprise’s customers that the enterprise in question and procedures to other business areas, such has the primary objective of solving social problems, as the development of care and preventative services. and that the owners are committed to the enterprise’s social objectives. • The length of careers through the employment of young people, part-time employees, people in long-term unemployment and senior citizens. This message is important for corporate buyers, who are under increasing pressure to consider When general awareness of social entrepreneurship responsibility in the subcontracting chain and other increases, the opportunities to select and inﬂ uence social responsibility. It also seems that citizens are customers, employees and entrepreneurs also increase. paying more and more attention to the kind of actors

98 99 from whom public services funded by taxation are enterprise carries out responsible business purchased. It is presumed that the renewed Act on activities. Public Contracts, which is due in 2014-2015 will also 2. Social enterprises use at least half of their profi ts encourage a step in this direction. to produce social good in accordance with their operating principle. The distribution of profi ts to The Social Enterprise Mark is also a symbol of thanks private owners is limited. to the enterprise’s personnel for their work. Many 3. Business operations are open and transparent. enterprises that have received the right to use the The enterprise records its social objectives and mark, use it visibly as part of their employer image the principle of limited distribution of profi ts in its in their recruitment. Research has shown that the articles of association. signifi cance of work and the opportunity to fulfi l In addition to these primary criteria, the committee oneself through work, is important to an increasing also takes into account certain secondary criteria, number of Finns. The mark can be a competitive which are typical to social enterprises. These include advantage for social and healthcare industry e.g. the position of employees in the enterprise, the employers, who are suffering from a lack of labour. demonstration of social impact and the safeguarding of a social mission. Many enterprises that have received the mark have also provided feedback, according to which the The use of the mark is also monitored: enterprises are application process for the mark has acted as a sent a survey each year, which helps to investigate the roadmap to better and more sustainable operating enterprise’s use of profi ts, for example. The mark is methods. The use of the mark encourages enterprises awarded for three years at a time, after which it should to take all three pillars of sustainable development be applied for again. During its fi rst two years, the into account in business operations. committee rejected just over 30% of applications.

How do you get a Social Association for Finnish Work Enterprise Mark? Helsinki

Enterprises must apply for the Social Enterprise Mark. Established in 1912 Applications are evaluated by a committee appointed www.avainlippu.ﬁ /yhteiskunnallinen- by the Association for Finnish Work’s executive board. yritys The committee consists of social entrepreneurship experts.

The following criteria are used when evaluating applications for a Social Enterprise Mark, and all social enterprises must meet these criteria:

1. The primary purpose and objective of a social enterprise is to create social good. The social

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History Diverse training and

The Suomen Yhteiskunnallisen Yrittäjyyden Akatemia consulting services cooperative, known by its shorter name SYY Akatemia, was established in 2012, when the SYY ry association The SYY Akatemia cooperative offers training and separated its payable service operations from its consulting services for social entrepreneurs. Concrete association operations. From 2009, SYY ry organized services include SYY Akatemia, WeCreate and various events and training aimed at social enterprises Kasvuhuone. The SYY Akatemia training programme under the SYY Akatemia name. It wanted to organize is aimed at new social entrepreneurs and enterprises. training into a separate component and that was how The WeCreate service concept on the other hand works the specialist organization SYY Akatemia cooperative in cooperation with a company-training programme was born. carried out with international company coach Daniel Sá Nogueira. The Kasvuhuone consulting service is The founders of the cooperative are an active bunch of SYY Akatemia’s most visible brand and is aimed at specialists from various industries who were involved enterprises that have already established operations. in SYY ry’s activities in one way or another. The members have experience with things including public One example of training provided is the Menestyvä and third sector operations, entrepreneurial coaching, Yhteiskunnallinen Yritys (Successful Social Enterprise) the development of business operations, fi nancial training which took place in autumn 2013. The management, productization and the development of training was aimed at enterprises that were applying business concepts. for or had already received the Social Enterprise Mark. The enterprises’ business models were fi ne-tuned The founders chose to establish the enterprise as and the enterprises networked together with other a cooperative as it was seen as a democratic way companies. to organize the enterprise’s future actions. Since all founders have been actively involved in the In addition to training and consulting services, the development of social entrepreneurship in Finland, cooperative also provides information on important it was only natural to determine the SYY Akatemia interest groups for social enterprises. The cooperatives’ cooperative’s own actions so that they would fulfi l members have at their disposal, extensive networks social enterprise criteria.

102 103 through which to fi nd information on a wide range of SYY Akatemia’s social allows for part-time entrepreneurship, so the model Cooperative entrepreneurs’ service providers. The creation of networks alongside objectives and impact is excellent for operations wherein all cooperative advice to new entrepreneurs training is one of the objectives of SYY Akatemia’s members also work elsewhere. Working in the operations. As a social enterprise, SYY Akatemia’s social objective cooperative is entrepreneurship, since each member According to Janne Lemettinen, a founding member of is set out in the cooperative’s rules. The objective is to is responsible for keeping the business running, for SYY Akatemia, anyone considering starting up a social Benefi ts from the cooperative’s services manifest create more social enterprises that are profi table and customer procurement and for marketing. enterprise should share their thoughts and ideas with concretely in the customer’s operations. For example, have an impact on society. SYY Akatemia’s limited a reliable party as early on as possible. Networking using the SYY Akatemia training service, the customer distribution of profi t is set out so that any possible Since each SYY Akatemia member also works outside with suitable partners can make the establishment receives information on basic social enterprise surplus left over from operations is allocated to the of the cooperative, they also bring new ideas and of a new enterprise easier. A new social entrepreneur operations and how business activities can have a development of the cooperative’s own operations. action to the cooperative’s activities. In utilizing can receive ideas for the organization of operations social impact in a profi table manner. SYY Akatemia’s their own networks, each member can develop through support networks. According to Lemettinen, training provides the enterprise or entrepreneur For SYY Akatemia, openness and transparency mean the cooperative’s strategy and products offered in SYY ry is a great way to network with other social with practical skills and knowledge on what social the open distribution of information concerning the accordance with demand. entrepreneurs. entrepreneurship means, how an enterprise’s values cooperative’s business. It has no business secrets and are formed and how social impact can be evaluated. pricing is open. In addition, the cooperative rules set Vanhapiha explains that the cooperative considers it Vanhapiha agrees and says that a new entrepreneur The Kasvuhuone service, on the other hand, focuses on by SYY Akatemia are used as model rules in social a strength, that its members are involved in various has to learn who its potential customers are, and nurturing existing operations. The customer benefi ts entrepreneurship training provided by the Tampere sectors of society through their own work. As SYY what it aims to achieve with its operations. It should from this not only though an increase in turnover, but Region Co-operative Centre. Akatemia wishes to act as a specialist network and also consider which parties it wants to involve in its also through an increase in social impact. help social enterprises to grow, it is only natural for the entrepreneurial dream. The entrepreneur has to come SYY Akatemia’s own social impact is created through cooperative to act as a link between different parties, out of his or her shell with ideas and share them with training services and increased entrepreneurship. such as between social enterprises and municipalities. the relevant interest groups. You are sure to fi nd help The Kasvuhuone service SYY Akatemia’s training has reached a large number for the early stages of your enterprise. of new entrepreneurs and people considering a The Kasvuhuone service offers existing social move to entrepreneurship. New, successful social Social impact is signifi cant enterprises help with developing and expanding their enterprises have already been established as a result Suomen Yhteiskunnallisen Yrittäjyyden operations. It encourages the spread of good practices of the training. Another signifi cant social impact is an Vanhapiha wants to highlight social impact. A social Akatemia cooperative that help to develop the operations of an existing increase in awareness of a social enterprise business enterprise should aim to keep impact a central part of Helsinki social enterprise towards growth. Another objective is model, achieved through training and the distribution enterprise operations and prioritise the development to highlight an enterprise’s social impact and increase of information. of services according to which services achieve the Established in 2012 this impact as operations grow. greatest social impact. Vanhapiha believes that the Industry: other executive management most important thing in an enterprise’s operations is consulting In the early stages of the service, a current analysis is A cooperative model-based what the enterprise achieves, not simply focusing on made of the enterprise’s operations, which examines doing. This idea is new to Finland. Municipalities, for www.syyakatemia.org the enterprise’s revenue logic and achieved social specialist organization example, are only just realizing that they can procure impact, among other things. The analysis helps to social impact in their procurements instead of simply identify development challenges and to create a vision Elina Vanhapiha, involved in the SYY Akatemia focusing on price. of how the enterprise’s operations can be developed cooperative, explains that a cooperative model is and increased in the future. Training, coaching or very suitable for the maintenance of a specialist consulting are offered to help development. organization like SYY Akatemia. The cooperative

104 105 SEVERAL PARTIES EXIST WHO KNOW THE SPECIAL FEATURES AND SOCIAL ENTERPRISE NETWORKS CHARACTERISTICS OF SOCIAL ENTREPRENEURSHIP. HERE WE HAVE COLLECTIVE A FEW EXAMPLES OF INTEREST GROUPS WHICH ARE IMPORTANT FOR SOCIAL ENTREPRENEURS. VALUABLE INFORMATION AND SKILLS ON THE ESTABLISHMENT AND OPERATIONS OF A SOCIAL ENTERPRISE CAN BE GLEANED FROM THESE GROUPS. IN THIS CHAPTER, WE WILL PRESENT ORGANIZATIONS, PROJECTS, COLLEGES AND SUPPORT NETWORKS, WHICH HAVE IMPACTED ON SOCIAL ENTREPRENEURSHIP IN FINLAND.

Advice services for social enterprises

The Tampere Region Co-operative Centre

The Tampere Region Co-operative Centre is an example of the Tampere Region Co-operative Centre’s advice point for co-operative entrepreneurs or for activities. A wide range of materials was produced in people considering co-operative entrepreneurship. the project and training was organized for corporative The centre’s task is to support the operations of advisors relating to cooperative operations and its cooperatives in the Tampere region and to develop co- characteristics. operative entrepreneurship. In addition, the centre also acts as a national support organization for corporate advisors in matters relating to cooperatives. Tampereen Seudun Osuustoimintakeskus During its history of operations, the Tampere Region Co-operative Centre has also amassed comprehensive Tampere knowledge relating to social entrepreneurship. For Perustettu vuonna 1999 example, the centre has produced model rules for social cooperatives, which the aforementioned SYY www.osuustoimintakeskus.net Akatemia, for example, made use of during its start-up www.yhteistoiminta.ﬁ phase.

The Yhdessä Yrittämään! (Entrepreneurship together!) programme which operated from 2009-2013, is one

106 107 SECRE – northern communities as the characteristics typical to it. Later on a data bank renewable energy producers will be established containing a large quantity of data collected over a period of more than two years and Social Enterprises in Community Renewable Energy, or case examples of various social enterprises. It will also SECRE, is an international network, which promotes present community-based forms of renewable energy social entrepreneurship in the production of renewable production. energy. One of its objectives is to spread awareness of social entrepreneurship and community operations. In the future, the network will be known for its Its fi eld of operation consists of the sparsely populated Common Power service. The Common Power northern areas of the European Union. service package includes consulting and training for entrepreneurs and corporate advisors. The service is The idea of the SECRE network arose when it was aimed at community-based projects or other projects observed that social enterprises in the European aiming at the use of renewable energy. Union’s Northern Periphery were not suffi ciently utilizing opportunities for renewable energy Common Power makes use of the SECRE community’s production. Earlier observations also suggested wide range of skills and good practices developed in that the social enterprise business model would the project. The content of the service is determined be very suitable for small-scale and community- to correspond with regional needs. The aim is to take based renewable energy production. Enterprises into account the special features of each area’s social and communities which produce renewable energy entrepreneurship. in sparsely populated areas face a wide range of challenges, which include the availability of funding, ensuring the profi tability of operations in the long- Social Enterprises in Community term, terms for the use and distribution of produced Renewable Energy electricity, community commitment and project Joensuu • Varkaus • Belfast • Coleraine management requirements. The SECRE network has • Galway • Rousay, Orkney Islands • striven to face these challenges by seeking out problem Stornoway • Umeå • Sogndal • Ísafjörður areas in various sectors and later by offering the Common Power service for identifi ed needs. www.secre.eu The international network provides information and www.commonpower.eu training services dealing with social entrepreneurship and the utilization of renewable energy. Participating from Finland are the Karelia University of Applied Sciences, the Savonia University of Applied Sciences and the Finnish Forest Research Institute Metla. All in all, twelve partners from seven EU countries participate in the network.

The network’s experts have studied social entrepreneurship in the ﬁ eld of renewable energy and

108 109 Support through networking Ministries and Sitra involved

The Suomen Yhteiskunnallisten Yrittäjien Social enterprise research network in determining social association FinSERN enterprises

As its name suggests, the Finnish Social Entrepreneurs’ The social enterprise research network FinSERN was The YTYRI working group Sitra - The Finnish Innovation Fund association (Suomen Yhteiskunnallisten Yrittäjien established in autumn 2010 and collects research data yhdistys), or SYY for short, acts as an interest group relating to social entrepreneurship, business activities The Ministry of Employment and the Economy Sitra was founded as an organization of the Bank and looks out for the interests of social entrepreneurs and community economy. FinSERN brings Finnish appointed a working group to prepare a social of Finland in 1967 to honour the 50th anniversary in Finland. The association’s objective is to promote researchers together and promotes the international enterprise business model with the objective of of Finland’s independence. In 1991, Sitra was the development of social entrepreneurship and cooperation on research through e.g. the SERNOC and developing the social entrepreneurship business transformed into an independent fund that reports bring together various parties to discuss the topic. EMES research organizations. model in Finland. The basis for the appointment of directly to the Finnish Parliament. Sitra’s objective is In addition to offering a channel to exert infl uence, the group was the ministry’s objective of promoting to anticipate social change and to be involved in the SYY ry also provides valuable support for social FinSERN has organized research conferences which new, international and growing business. The working development of new business models that aim for a entrepreneurs. present current studies and research relating to group conducted their work during 2010 when the sustainable economy. social entrepreneurship. Publications by researchers fi rst initiatives for the national recognition of social SYY ry was established in 2010 and its members are in the FinSERN community can be downloaded entrepreneurship were made. As part of its support of new sustainable economy well-known social enterprises. The association’s board from the association’s website. In addition, FinSERN trends, Sitra has been involved in promoting the is a group of active people who have been involved also organizes an annual thesis competition, which The YTYRI working group consisted of experts development of social entrepreneurship and fi nancing in importing the social entrepreneurship concept to awards prizes to the best social entrepreneurship- from various areas and one of its most important models in Finland. Sitra’s personnel participated in Finland. related theses and thesis work from universities and publications is the fi nal report on the Development the YTYRI working group appointed by the Ministry of polytechnics. of a social enterprise concept, published in spring Employment and the Economy. As a concrete act in the In the early phases of its operations as an association, 2010. Based on the report, a new working group was social enterprise sector, Sitra has funded e.g. a project SYY ry organized various events and training for social appointed to develop the social enterprise mark, carried out by Eera Oy and Demos Helsinki to develop a enterprises under the name SYY Akatemia. Later on, with a mandate on its publication later given to the fi nancing model for social enterprises. The fi nal report the training services were organized into cooperative Association for Finnish Work. The Social Enterprise ”Yhteiskunnallisen yrittämisen rahastomalli” can be format operations, set out in more detail on page 103. Mark is dealt with elsewhere in this publication. found online in PDF format.

Suomen Yhteiskunnallisten Yrittäjien yhdistys FinSERN Sitra - The Finnish Innovation Fund Helsinki Helsinki Helsinki Established in 2010 Established in 2010 YTYRI working group Established in 1967 www.syy.fi www.fi nsern.fi Helsinki www.sitra.fi Active 2010–2011 www.tem.fi

110 111 Research and development The Living lab project for social enterprises The Social entrepreneurship in South Savo project work through public funding The Social enterprises’ living lab project carried out by the Diaconia University of Applied Sciences, Syfo Oy The Yhteiskunnallinen yrittäjyys Etelä Savossa (Social and the Helsinki School of Business Small Business entrepreneurship in South Savo) project is a project The Kolmas Lähde project Centre was active between 2010 and 2013. The target carried out by the Diaconia University of Applied The Kolmas Lähde (Third Source) project is a The Kolmas Lähde project publications include a group were entrepreneurs and organizations who Sciences and Aalto University’s School of Business’ coordination project funded by the Ministry of Case Book and Hand Book. The Case Book presents were either already social entrepreneurs or thinking Small Business Centre and is funded by the European Education and Culture and managed by the Aalto 77 associations which have successfully productized of becoming social entrepreneurs. Parties providing Social Fund and the South Savo Centre for Economic University’s Small Business Centre. The aim of projects their service operations. In the future it could be corporate advice and authorities that make decisions Development, Transport and the Environment. The funded by the ministry is to develop youth, culture and possible to organize the service operations of some on municipality procurements, were also an important project aims to develop employment and home care sports services in the third sector. The Kolmas Lähde of these associations into a social enterprise format. part of the project’s target group. services in South Savo, together with municipalities, project operates all over Finland. It trains and supports The Hand Book provides tools for the development of the third sector and companies in the region. associations and municipalities in the development associations’ service production. The aim of the project, partially funded by ESR, was of wellbeing services. The social enterprise business to support and promote the development of social The project supports the strengthening of model has acted as one model for the organization of entrepreneurship in Finland. Concrete actions were South Savo social enterprises’ and associations’ associations’ actions. taken by developing various tools and service models operations through the organization of business and to support the creation of new enterprises. One such productization training days. The project’s activities The objective of the Kolmas Lähde project is to service is the Kasvuhuone service coordinated by the are concretized in the form of training days and increase associations’ and municipalities’ payable SYY Akatemia cooperative. Kasvuhuone was originally seminars organized in Mikkeli and Pieksämäki, among service operations. The objective was achieved and developed in the Social enterprise Living lab project. others. For social enterprises, the project offers a associations all over Finland have developed their Another signifi cant result was the establishment of the diverse range of skills through training and consulting. services. The project, which has been active since 2008, FinSern research association in 2010. A third result is Training themes have included the development of has accumulated knowledge and skills concerning the Social Enterprise Mark, which was planned in the service production, cooperative operations, and social the development of associations’ services. This YTYRI working group organized by the Ministry for entrepreneurship. information will be distributed through publications Employment and the Economy by those involved in the and training until the project ends. Social Enterprise Living lab project. Social entrepreneurship in South Savo Mikkeli • Pieksämäki Kolmas Lähde Social Enterprises’ Active 2011–2014 Acts nation-wide Living lab project www.yhteiskunnallinenyritys.fi Active 2008–2014 Helsinki www.kolmaslahde.fi Active 2010–2013 www.yhteiskunnallinenyritys.fi www.fi nsern.fi

112 113 The Social entrepreneurship in the Oulu The Social Entrepreneurship in Innovative Where can a social The Ehta cooperative for the development region project Value Creation (SOCENT) project of ethical banking enterprise obtain funding? The Social entrepreneurship in the Oulu region The Social Entrepreneurship in Innovative Value Eettisen pankkitoiminnan kehitys osuuskunta Ehta, (Yhetiskunnallinen yrittäjyys Oulun seudulla) project Creation (SOCENT) project is a research project Crowdfunding – social impact of the or the Ehta cooperative for the development of ethical is coordinated by the Diaconia University of Applied coordinated by the Lappeenranta University of future? banking, was founded to develop a new kind of Sciences, which aims at developing operational technology and funded by Tekes. The objective of the fi nancing institution in Finland which operates on an preconditions in the region for social enterprises. project is to understand on a theoretical and practical Crowdfunding is a fi nancing model wherein a private ethical and sustainable basis. The project goes by the During the project, the operations of social enterprises level, how social entrepreneurship can promote the person can act as a fi nancier for an enterprise even by name of Pankki 2.0 (Bank 2.0) and its objective is to will be made visible through the organization of resolution of social problems. providing just a small sum of money. The idea is that establish a fi nancing institution whose operations are various seminars and events. Another objective is to the fi nancier determines the amount of money he or open and transparent. It aims to collect capital with increase familiarity with the operations of the FinSern The project offers innovative support to social she wishes to use to support the project. Within social which to fund sustainable and responsible economic research organization and with the Social Enterprise enterprises operating in the private and third sectors. media, this funding method has gained worldwide trade, such as fair trade, renewable energy and Mark, and to seek new fi nancing opportunities for In addition, the project promotes social enterprises’ popularity. The amount of funding can vary from enterprises and organizations that offer training. social enterprises. and their personnel’s innovation policies and the twenty or thirty euros to a few thousand euros. development and utilization of resources. Though the banking itself is still in the early stages, The Social entrepreneurship in the Oulu region In Finland the rules concerning crowdfunding the start has been promising. Sitra declared the Pankki project will see the development of an information are mainly set out in the Money Collection Act 2.0 initiative to be the best project at the Sustainable and advisory services model for social enterprises. (Rahankeräyslaki 225/2006) and are monitored by Economy idea competition in spring 2013. Carried out In addition, the project will create a social the police administration. At the time of writing, a in cooperation with Luomulaatikko Oy from Tampere, entrepreneurship toolbox for corporate advisors, policy is in place whereby crowdfunding must always a project to establish a new kind of organic food store enterprises, third sector actors and polytechnics. The be against payment or compensation. In practice, owned by producers and customers resulted in 120, Social entrepreneurship in the Oulu region project is this means that the party collecting capital through 000 euros of share capital for the new enterprise. At funded by EAKR, the City of Oulu and the Diaconia crowdfunding must, in return for the funding, provide the time of writing, the development of the Pankki 2.0 University of Applied Sciences. an equivalent quantity of a product or service. project is still under way, so anyone interested in the matter should watch this space. Perhaps a fi nancing Several internet websites offer services relating to institution concentrating on ethical banking will crowdfunding, wherein an enterprise or association someday be opened in Finland. The Social entrepreneurship in the Oulu can obtain funding for its product, service or project. region project Some well-known international websites include Oulu Kickstarter and Indiegogo. Mesenaatti is perhaps the Ehta cooperative for the development of most popular service in Finnish. The idea behind ethical banking Active 2013–2014 websites subject to a fee, is to offer visibility for parties Helsinki www.diak.fi The Social Entrepreneurship in Innovative seeking funding. Established 2013 Value Creation (SOCENT) project www.pankki2.fi Lahti Active 2013–2014 www.lut.fi

114 115 A double bottom line is a concept relating to social tions. Social economy actors have traditionally inclu- A SOCIAL ENTREPRENERUSHIP entrepreneurship and means that in addition to pur- ded social and community enterprises, cooperatives suing normal revenue, a social enterprise also has the and mutual companies, as well as work carried out by GLOSSARY objective of solving a social problem. associations and foundations. Impact investment refers to the taking into account A social enterprise is a company whose operations of social impacts when carrying out investments. The are guided by values, limited profi t distribution, social investor has other objectives besides maximizing pro- responsibility, operational transparency and the defi ts; the amount of money invested must also achieve monstration of impact. In Finland, social enterprises positive social impact. can be cooperatives, foundations, associations, limited liability companies, partnerships or private persons Limited profi t distribution is one of the key concepts carrying on trade. of social enterprise operations. A social enterprise must allocate at least half of its profi ts to the solution A social fi rm or work integration social enterprise is a of a problem as determined in its rules or to the de- single community economy actor and a social enter- velopment of its own operations. This means that the prise business model. In Finland, the Act on Social distribution of profi t to private owners is limited. Enterprises (Laki sosiaalisista yrityksistä 1351/2003) legislates social enterprises and defi nes, among other In Finland, a non-profi t organization is an associa- things, the employment obligations for social enter- tion, foundation, limited liability company or other prises. The objective is to employ disabled people or legal association whose operations meet criteria for people in long-term unemployment and to therefore non-profi t operations set by the tax administration. offer these individuals the opportunity to return to In order to attain the status of a non-profi t organi- employment. zation, the organization’s rules must include various limitations on the distribution of profi t and capital. Social return on investment (SROI) is a method and The organization’s owners may not benefi t fi nancially way of understanding how certain enterprise actions from the organization’s operations, nor may the wages can produce social value. It is also a method of evalu- paid by the organization be larger than usual. The ating the profi t of extra-fi nancial value in monetary non-profi t status of an enterprise is determined in the terms. When using this method, a SROI ratio is used. Income Tax Act (Tuloverolaki, 1535/1992) and the tax administration may issue certain taxation benefi ts for The third sector - also known as the voluntary sector - operations it deems as non-profi t. is the sphere of social activity undertaken by organizations that are not for profi t, such as associations and Social accounting is the monitoring of the fulfi lment foundations. of social objectives taking place over a previously defi ned period of time. Social accounting is one of Transparency is a central concept in the fi eld of many methods developed for the evaluation of a social social entrepreneurship. Compliance with open enterprise’s social impact, and also often includes an and transparent operating methods supports the evaluation of an enterprise’s environmental impact. demonstration of an enterprise’s operational impact and gives customers, fi nanciers and other interest The concept of social economy covers enterprises and groups the opportunity to evaluate its operations for organizations that practice society-oriented opera- themselves.

116 117 FURTHER INFORMATION Starting a business Kostilainen & Pättiniemi. 2013. Avauksia yhteiskunnallisen yritystoiminnan tutkimukseen. Osuuskunnan perustajan opas. 2010. Published by: Published by: FinSERN. Pellervo Society / Pellervo Seura ry. www.pellervo.fi Kostilainen & Pättiniemi. 2011. State of social economy Sosiaalisen yrityksen perustamisopas. 2012. Published and social enterprise concept in Finland. Published by: by: Suomen Uusyrityskeskukset ry / Finnish Enteprise SERNOC Research Network. Agencies. www.uusyrityskeskus.fi Laiho, Grönberg, Hämäläinen, Stenman & Tykkyläinen. Perustamisopas alkavalle yrittäjälle. 2012. Published 2011. Development of social enterprise concept. by: Suomen Uusyrityskeskukset ry / Finnish Enteprise Published by: Ministry of Employment and the Agencies. www.uusyrityskeskus.fi Economy.

Innovaatiokuukausi**® Työkirja. 2011. Published by: Lilja & Mankki. 2010. Yhteiskunnallinen yritys – luova Karelia University of Applied Sciences ja yhdistävä toimintatapa. Published by: Yhteinen Yritys project.

Social entrepreneurship Okkonen. 2013. Social Enterprise Characteristics of Community Renewable Energy Projects. Published by: Berg & Karjalainen. 2010. Uudenlainen yrittäjyys Karelia University of Applied Sciences. -Kuusi esimerkkiä yhteiskunnallisesta yrittäjyydestä Suomessa. Published by: Finnish London Institute. Social enterprises Bland, J. 2010. Social Enterprise Solutions for 21st Century Challenges, The UK Model of Social Enterprise Grönberg & Kostilainen.2012. Sosiaalisten yritysten tila and Experience. Published by: Ministry of Employment ja tulevaisuus. Published by: Ministry of Employment and the Economy. and the Economy.

Cajanus. 2012. Towards More Strategic Corporate Social Grönberg. 2004. Yhteisötalous ja sosiaalinen yrittäjyys. Responsibility — Partnerships with Social Enterprises Published by: Stakes. Published by: Aalto University School of Business, Small Business Center. Karhu, Pajari, & Salmi. 2007. Sosiaalisen yrityksen liiketoiminta ja ansaintalogiikka. Published by: Karjalainen, Hyytiäinen & Kostilainen. Tavoitteena Diaconia University of Applied Sciences. tasapainoinen kehitys. Yhteiskunnalliset yritykset ja liiketoiminnan kasvu. Published by: Aalto University School of Business, Small Business Center.

Karjalainen & Syrjänen. 2009. Onko Suomessa yhteiskunnallisia yrityksiä? Published by: Finnish London Institute.

118 119 Other publications Online

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Määttä, S. 2000. Tasapainoinen menestysstrategia, Helsinki.

Tilisanomat. 2006. Yleishyödyllisen yhteisön tuloverotus. Available (in Finnish) at: http://www.tilisanomat.ﬁ / node/766 Retrieved 7.11.2013.

Ministry of Employment and the Economy. Register of social enterprises. Available (in Finnish) at: http:// www.tem.ﬁ /yritykset/sosiaalinen_yritys/sosiaalisen_yrityksen_rekisterointi/rekisteriin_merkityt_yritykset Retrieved 31.10.2013.

Working group which prepared a social enterprise business model. 2011. Development of social enterprise concept. A Ministry of Employment and the Economy publication.

124 125 Social entrepreneurship is a new business perspective. This book was written since new topics are attracting both interest and questions. The Common Good book contains accounts of Finnish social entrepreneurship. To gain an overall picture of the phenomenon, the book interviews social entrepreneurs and researches their ﬁ eld of business. Find out more about social entrepreneurs in various sectors through these enterprises’ stories. The book also contains views on business principles, markets and competitive methods. You are currently holding the most comprehensive work on social entrepreneurship to date.

Read on, perhaps you’ll become inspired and learn something new!