A change in the social fabric

Modern technology is allowing a direct link between the lucrative markets of the West and hard-working women in conflict zones, thanks to the creative thinking of two Melbourne women. 

By DIANA HODGETTS

In a shared office in Brunswick, two young women are working on a puzzle. It's complicated. They're unlikely to solve it alone, but they believe they've found an important piece.

Fiona McAlpine and Sharna DeLacy are peace activists. Their mission is to help women in conflict zones become financially independent. The women they help already sell garments in their local markets but their potential customers also live in poverty.

McAlpine and DeLacy believe technology could make a difference. They are developing an app and website to enable the women they work with to sell their products in foreign markets. They reached their initial funding target on the Australian crowdfunding site pozible.com  last week and are forging ahead with their project.

“It's not the only answer and it's just one piece of a really complicated puzzle, it just happens to be quite an important piece – like the corner,” says DeLacy.

The Fabric Social app is the latest in a line of social enterprises springing up in Melbourne following the success of ventures such as Thank-You Water (a non-profit organisation that channels income from water sales into providing a reliable water source for people who have none) and Streat Cafe (which provides hospitality industry skills for homeless young people). McAlpine believes that in Melbourne, people are ready for a different model.

“I think there's fatigue about the traditional ways of production and hearing horror story after horror story,” she says. “When people see that there's an alternative they jump on it.”

The shift in the market has also come about through necessity, as not-for-profit organisations can no longer afford to rely on grants and philanthropy.

RMIT teacher in management and entrepreneurship Dr  Afreen Huq  says that in the past, charities considered it “obscene” to talk about profit generation, but that has changed.

“They realise that if you don't have surplus generated through their own activities within their entity, you will not survive,” she says. “[Social enterprise] is a much more sensible model than how foundations and charities operate.”

McAlpine and DeLacy see the social enterprise model as a game changer as it enables them to put purpose ahead of profit.

“A publicly listed company has to put profit first even if that destroys environments, people’s lives, it can be hugely detrimental to the lives of women...you don't have to abide by that absurd ethic in a social enterprise context,” says DeLacy.

Katelijne Lenaerts of Social Ventures Australia, an organisation that provides funding and strategic support for ventures that bring about social change, says that Australia is still confused by this definition of social enterprise. SVA routinely receives applications for funding from businesses that put profit ahead of purpose.

“When you go deeper into the concept, what you see is that the actual primary motivation is that they're running a business and that there's a social agenda sitting next to it,” she says.

“A social enterprise should be the other way round, your social mission should be your starting point. Everything you do has to make sense to meeting that social mission.”

A social mission doesn't guarantee a financially successful enterprise. The successful enterprises are those that understand their market well enough to provide customers with a product that meets their needs.

“It is a commercial activity in the first instance and social one in the second from the eye of the consumer,” says Lenaerts.

But it's difficult to define success in a social enterprise context. There are many social enterprises that struggle financially, but still have enough income to sustain their social mission. Wesley Fire and Clay is a pottery factory that provides opportunities for people with disabilities.

Marketing co-ordinator Nicki Cook says that without Fire and Clay, some of their workers would have nowhere to go. Although her face lights up when she talks about her work, she is frank about the difficulty she has selling the stock to retailers. “Quite often we have to sell product below cost just to get some return from it.”

It's Friday and the workers aren't there. Instead, an art class works quietly at one of the tables. The classes were introduced as a means of supplementing income. Cook is constantly on the lookout for opportunities like this, as relying on retail sales is not enough.

“You're never going to make a profit,” she says. “But it keeps these people employed and gives them a sense of self-worth.”

McAlpine and DeLacy at The Fabric Social are approaching their endeavour with a similar attitude.   They will measure their success in cash flow, but the project is about the women.

“If The Fabric Social doesn't make any money itself but it's helping to grow women's business, then there's a success,” said DeLacy.

Across the table from her colleague, McAlpine nods. “We've done the analysis now and we've come to terms with the fact that social enterprises don't make money for the first 12 months.”

They are anything but naïve. After years of working in conflict zones, they're aware of the challenges they face and they've built their business model around this.

“The website should know where the problems lie, so if you're placing an order, it can tell you that there's an expected time frame of five days before these gloves are ready ... kind of just educating you about what it means,” says DeLacy.

The pair will join a colleague in India to begin making connections with partner organisations and introduce the app to the women. With so much work to do, it remains to be seen how well The Fabric Social will fit together with the other pieces of the puzzle. But it's obvious that McAlpine and DeLacy will exhaust all possibilities to make it work. That's how social enterprises survive.