Innovation powered by crisis

Could the economic crisis be having a positive effect on civil society? Mart Kuusk of the Good Deed Foundation, a foundation that supports the development of social entrepreneurship in Estonia, thinks it is. As Director of the foundation he has seen firsthand how hard times can inspire innovation and new ideas.

The foundation helps launch new social enterprises but it also helps existing non profit organisations incorporate business practices into their funding model.  Estonian non profits rely heavily on funding from the government but the economic crisis means drastic budget cuts in all sectors, including the third sector.

Although a social enterprise is a new concept in Estonia and there is no legal framework to support entrepreneurial activities with social goals, Kuusk believes that they could one day play a key role in Estonia’s civil society.

The Good Deep Foundation introduced social entrepreneurship to Estonia three years ago. Since then they have supported six social enterprises.

Vita Europe speaks to Kuusk to learn more about the social entrepreneurship movement in Estonia.

What impact has the crisis had on social entperprise in Estonia?

Even if there is an economic crisis and unemployment is increasing and there are liquidity problems we have observed that social entrepreneurship is actually growing in momentum. We are seeing the development of new ideas and new organisations, in a way the crisis is actually having a positive effect on social entrepreneurship. 

Have you have seen a growth in interest in social entrepreneurship over the past year?

Definitely, the change has certainly been in mentality.  People are starting to realise that there is not only one way to do business. You can run a business and at the same time try and solve a social problem.  Before our organisation was face with the problem that we had the resources to support social enterprises but no one was coming forward with any ideas. So there was nothing to support. Now there is actually a need to find more funds, because there are more people coming forward with ideas. We have just recently started supporting a new social enterprise and already there are three more in the pipeline for development.

Who are the social entrepreneurs?

More people are coming from the non profit sector. We have noticed that there is a lack of interest coming from the private sector. Mostly they are mission based NGOs that are looking to adopt a new financial model. These groups are looking to move away from traditional fundraising and charity based models.  One of our roles is to help NGOs that are being financed by the public sector or by foundations to find ways to generate some income using a business approach.

Have you used models from other European countries as a source of inspiration?

Definitely, we have learned a lot from the UK model. In Italy and Spain they have a more cooperative based understanding of the concept. In the UK social enterprises take on the form of a businesses with a social mission.

What does the future look like for social enterprises in Estonia?

We are really optimistic that this concept will grow and develop in Estonia over the next couple of years. We hope that social enterprises will become more visible and that the government will have to take notice.