EDITOR FOREWORD Social Enterprise (SE), a concept with 5 corporate social responsibility (CSR) and years history in Vietnam, is understood as can thus fully participate in the process of a business with the mission of serving developing this 'third sector' (i.e. SE) in society. This type of business in fact existed Vietnam in Vietnam for many years, but not under The Bulletin has four parts: the SE name, and included not-for-profit The model: This section first introduces organizations, agricultural cooperatives, the model and outlines some challenges villages, and public utility enterprises. that SEs in Vietnam are facing. Fair Trade Social enterprise is usefully considered as is then considered as an SE model a hybrid model incorporating pure business providing opportunities for the and social/community purposes. Social development for vulnerable people in entrepreneurs, besides their passion and Vietnam. Basic operational models that SEs dedication to helping society - especially normally pursue are then introduced. those at the bottom of the income pyramid Good Best practices: two case studies - should be capable to create innovative of SEs are presented with the aim of business models, take product ideas to sharing innovative business ideas, and how market and have skills in financial these SEs achieve success: Tohe in Vietnam management. Currently in Vietnam there and Creative Workshop in Ukraine. are about 200 to 300 social enterprises, Role of CSOs: in Vietnam, at present, some 20-30 years of history but the there are two large organizations majority recently established. supporting SE development pursuing two The CSO-CSR project aims to establish different approaches. CSIP focuses on a network of Civil Society Organisations awareness raising, capacity building (CSOs) in Vietnam to be more committed through training, development of social to CSR in promoting human rights at work, entrepreneurship. SPARK focuses on improving environmental practises and technical assistance and funding for social monitoring business obligations by active enterprises. Some CSO Tips work is engagement of community. The publication introduced in this part. of the 2 Bulletins: Corporate Social For CSR Professionals: two articles Responsibility: from viewpoints to related to enhancing creativity in practices and Social Enterprise: Models, organizations are presented. The first article Practices and Trends are among project considers integrating sustainability into the efforts in attaining its objectives of entire production process of a business. The awareness raising and knowledge sharing second provides 4 principles for managers among CSOs. to enhance innovation in companies This Bulletin No2 is published with the We would like to thank colleagues, the civil aim not only of introducing the concept of society organizations involved in social enterprise, but also sharing ways of contributing articles, sharing views, their organizing this business model. Civil vision and funding for the publication of society organizations (CSOs), as not-for- this Bulletin. profit entities, and for-profit businesses, are highly committed to implementing Dr. Truong Thi Nam Thang SOCIAL ENTERPRISE: MODELS, PRACTICES AND TRENDS 1 SOCIAL ENTEPRISES: MODELS Social Enterprise History, Realities and Challenges in Vietnam Nguyen Manh Quan 1 Thus, a series of state welfare especially in areas of industrial HISTORY models was born in Western production. In rural areas, The social enterprise model first Europe and North America after agricultural cooperative forms appeared in London in 1665, World War II. (Co-op) are socio-economic when Thomas Firmin set up a Social enterprises began to thrive development organizations manufacturing plant to maintain again, as a mass movement, after tapping community spirit: employment for 1,700 workers. British Prime Minister Margaret cooperation, sharing and mutual Right from its inception, he Thatcher came to power in 1979. benefit. This model has also been claims that the firm did not pursue She advocated shrinking the role established in urban areas, in profit maximization and that of the State and claimed that the small-scale and handicraft profit would go to charity State should not be directly industries. They may be regarded (Howarth C. MacDonald & M., involved in providing social as typical social enterprise models 2008). The change in perspective welfare. Since then, Britain has in Vietnam before the renewal. and approach to charity of rich been at the forefront of the SE National Economic Reform people in Europe led to the movement worldwide. According Policy, 1986, was a milestone introduction of various forms of to the latest figures, the number of marking the recognition of the economic activity in which the SEs in the UK in 2011 amounted private sector and individual vulnerable/disadvantaged, poor to 90,000, with a total turnover of smallholders. Proactive role of people, were used as a labor force £ 70 billions. the individuals and the to create benefits for themselves community in the provision and CURRENT STATUS IN VIETNAM and for others (society), rather exchange of services to meet the needs of the people has been than just asking for benefits/gifts The historical record did not recognized and developed since from society (the others). A mention the first launch of forms then. During this period, micro-credit fund was first such as state authorities or rich numerous social enterprises established in Bath, England, with people handing over fields to appeared and operated in diverse the primary purpose of offering farmers for planting without rent, forms. International experience, interest-free loans for production. the offering of free classes, or the especially that of the UK from The school of spinning and case of traders and shopkeepers 1978, showed that the context of weaving that was opened in who participated in ‘loan developing social enterprises in Liverpool in 1790 was the first societyies’, ‘collective savings’ Vietnam has in common the social enterprise in education and (forms of people's credit), and downsized role and scope of the job creation for the blind poor. In who joined ‘trading wards’. But public sector that led to the other models, some such SEs have been a part of development of another organizations/ businesses allowed Vietnam’s historical development. economic sector to take on the workers to sign labor contracts or Upon the success of the public sector in assuming public to become business owners, as revolution, nationalization functions and social welfare. well as to share profits. They policies and centrally-planned included Cooperatives (Co-ops), economy guidelines led to the To date, according to research on affinity (Provident Society), and formation of state-owned SEs in 2011 by CSIP and Spark industrial villages (Industrial enterprises and the strong public (two typical SEs in Vietnam), Society). sector directly involved in funded by the British Council, in In the 20th century, the social providing social welfare for all which 167 SEs were surveyed, enterprise model was less active people. Public services and social the distribution in terms of form and Keynesian doctrines thrones welfare are considered one of the and scope of the impact of SEs in defined the role of State basic state functions. The role of Vietnam are presented in Figure 1 intervention in the economy. the private sector is lackluster, and Table 1. 1 Associate Professor, Doctor, National Economics University 2 SOCIAL ENTERPRISE:MODELS, PRACTICES AND TRENDS ÿÿ ÿÿÿÿ regulation for social enterprises to develop and operate. Although there are various articles and chapters related to the relevant objects of social enterprises in the Vietnam’s legal system, it is still necessary to establish a formal legal framework for social enterprises to establish, operate ÿ !"#ÿ%&'"()01ÿ!'02ÿ3)(" 4 '5"ÿ1044')6ÿ4 7"!(8ÿ9@ABBCDÿEFGHIEÿ and grow, aside from this official ÿ recognition. Third, the inevitable PQRÿ Sÿ TÿU V Uÿ U UWÿÿPXXÿYWÿÿÿ consequence due to the lack of a PU Y aÿ Wÿ` Yÿ Y `Y QÿbYcÿ formal legal basis is the limited `Xÿ access to financial resources and defghifÿpqrsfgÿtuÿ ÿ ÿÿÿÿ vfpfuwxwhgwfyÿtgihpwhwtpÿÿ capital mobilization and social defghifÿfxtptrwxÿehqfÿ gihpwhwtpÿgfefpqfÿÿ ÿ ÿ ÿ ÿ resources. Although the uwphpxfÿ Vietnamese government has dtyÿvfpfuwxwhgefÿÿ ÿÿÿÿ issued many policies and spent !"#ÿ%&'"()01ÿ!'02ÿ3)(" 4 '5"ÿ1044')6ÿ4 7"!(8ÿ9@ABBCDÿEFGHIEÿ resources for the development of gÿ3!)1'!ÿh02"ÿ')ÿijÿk'(lÿ(l"ÿ"m!l0)6"ÿ 0("#ÿ@Anopq&rjHijnÿ ÿ entrepreneurship, business, and CHALLENGES awareness of and attitudes to those who need to be given humanitarian issues is better priority in society, the operation of The development of social appreciated, due to improved social enterprises mainly relies on enterprises in the next period is living standards, better education, benefactors’ charity. Fourth, predicted to be very impressive advanced life quality on one hand besides the above-mentioned because of the following reasons. and the gap between rich and poor obstacles, social enterprises are First, the private economic sector and social inadequacies caused by generally faced with limited in Vietnam has grown. Despite the economic mechanisms which management and operation difficulties due to the economic increasingly creates pressures on capacity. The great humanity and downturn, private businesses, the spiritual life of a nation with beauty in heading towards especially local small and such rich community