Although the number of people in the world living in extreme poverty has been halved between 1990 and 2015, there are still 836 million people living on less than USD1.25 per day (UNDP, 2018) . For South Africa, this reality translates into 13,8 million out of a total population of 57 million people living on less than USD1.25 (ZAR 19.29) per and 25,4% being unemployed. The social enterprise Learn to Earn (NPO) (PBO) has been addressing this sustainability challenge in the Western Cape, one of the nine provinces of South Africa, since 1989.
“Learn to Earn’s (LtE) vision is to eradicate unemployment and other legacies of injustice in South Africa and Africa. Its motto is “a hand up – not a handout”.”
About Learn to Earn
Learn to Earn’s (LtE) vision is to eradicate unemployment and other legacies of injustice in South Africa and Africa. Its motto is “a hand up – not a handout”. LtE trains over 700 people per year. An average of 83% of its graduates become economically active and 20% start their own businesses. In terms of its sustainability objective, LtE wants to continue to fulfill its vision and mission for as long as there is a need to do so. LtE’s director Roché van Wyk summarizes LtE’s accomplishments over the last three decades as follows: LtE has “formalised and developed the organization from one intervention in Khayelitsha in 1989 to four campuses, two shops, four Associate Organizations using the Learn to Earn model for development, a Retail Sector wide Fashion for Change (NPC) and a recently completed three-year City of Cape Town partnership. The interventions have expanded to 15 different market driven skills courses. The most recent is the Ground UP Barista Training Academies as well as the Ground UP Coffee Franchise which is offering mobile and corporate coffee solutions”.
Social-entrepreneurial indicators
Indications of a social-entrepreneurial DNA are referred to in one of the definitions for social entrepreneurship: “a process involving the innovative use and combination of resources to pursue opportunities to catalyze social change and/or address social needs”. A common thread in most of these social entrepreneurial definitions is how the centrality of vision, trading, stakeholders’ participation in governance, profits reinvested for social purposes, innovation, and the status of the changemaker, is addressed. To use LtE as an example, this thread is present in its social business model, in some ways with better results than in others.
Firstly, LtE’s vision and mission statements “to eradicate unemployment and other legacies of injustice in South Africa and Africa” and “to develop people, especially unemployed people, socially, economically, emotionally and spiritually” are central to all its activities. LtE strives to have a clear impression of the market that they serve, after which it goes into an area that has been overlooked by other NGO’s. In LtE’s case, it makes LtE relevant in that it also serves people that are older, and not as well educated, thereby making them less likely to be recipients of training by other NGO’s. LtE has also standardized its training, linked it with government training standards, and documented the results very well. There is also a very clear link between training and job creation. For LtE, it is not about how many people they actually train, but how many become economically active thereby avoiding mission drift and keeping LtE’s vision and mission in the heart of its social business narrative.
Secondly, LtE realizes it has to use trading as a means of generating revenue, as opposed to only relying on donations. LtE’s focus is on training and enabling beneficiaries to become economically active through its holistic approach of providing work skills, life skills and business skills. LtE therefore has to find innovative ways to fulfil its vision through trading and by becoming financially independent at the same time, as it has done with Ground UP. These challenges have been referred to in LtE’s concerns in terms of money and how it creates value to the economy. SCALA results confirmed this tug of war of finding a balance between generating revenue through trading and being donor-driven in the social business sector. Although a significant majority of the SCALA respondents strongly agree that LtE is successful in enabling beneficiaries to become economically active, there is not as much consensus on whether LtE’s holistic approach contributes to the financial independence of the organization. Respondents are also not in agreement on whether LtE’s income is self- generated. Although these results showed that respondents are of the opinion that LtE is rather donor-driven, LtE’s leadership has reported on an increase of 55% on its trading component from 2014-15 to 2015-16 in how it is funded.
Thirdly, LtE’s stakeholders participate in its governance, as shown in how LtE’s primary focus is on a variety of players with the aim of engaging its internal and external stakeholders in work that is connected to eradicating unemployment and other legacies of injustice in South Africa and Africa. One example is the Ground UP social franchise venture, for which all LtE’s relevant stakeholders had to be informed and on board before LtE could launch the initiative. This led for example to Ground UP’s accreditation by the Specialty Coffee Association of Europe (SCA). Another example is to look at the South African Government as stakeholder. In its restructured form, LtE is registered as a Trust, with both Not for Profit Organization (NPO) and Public Benefit Organization (PBO) status in July 2016. This means that financial contributions to LtE’s training programs are tax-deductible. LtE Enterprises (Pty) Ltd is a Level 1 Enterprise Development company that is 100% owned by the LtE Trust. Level 1 means that LtE has scored the highest level of Broad-Based Black Economic Empowerment (B-BBEE) points, that enable them to offer mutually beneficial partnership opportunities. B-BBEE is a government initiative that aims to enable the participation of the majority of South Africa’s citizens. LtE’s Socio-Economic Development certificate (SED) in terms of skills development, scores 100%, which makes LtE attractive to receive monetary or non-monetary contributions. This is comparable to the previously known terms of corporate social responsibility (CSR) or investment (CSI). LtE’s partnership with the South African government is therefore crucial in how it conducts its business.
Fourthly, with LtE being a social business, its profits are reinvested for social purposes as declared in its vision and mission and applied according to its strategies.
Fifthly, LtE addresses unemployment and other legacies of injustice in South Africa and Africa innovatively as shown in the variety of market-related courses that LtE offers. LtE has already successfully tried its hand at disruptive innovation through its corporate social investment-joint venture between the Foschini group and LtE of refurbishing clothing that customers returned to the Foschini Group-stores. Learners are exposed to the process from repairing clothes to the tagging and packing of goods and also completed the SITT (Sewing Industry Technical Training) course. However, according to the SCALA-results, there is room for improvement in LtE rewarding innovation, how it implements large-scale change and how it challenges the status quo.
Lastly, social entrepreneurs are often referred to as changemakers, which is no different in LtE’s case. Interviewees describe the CEO of LtE, Roché van Wyk, as an “opportunity seeker” and “idealist”. These characteristics remind of the conviction, courage, commitment, and so-called contrarian streak that are called for in iconoclastic leaders driving sustainable change. One of the programs under his leadership is the E3, or Enterprise Enabling Environment program. Through this program, LtE coaches selected individual business owners for a period of three years on self- and business development on how to assume the risks and rewards of entrepreneurship. This program has enabled entrepreneurs to take on the challenge and start their own businesses and to employ the unemployed, thereby contributing to the social value of the society. The knock-on effect of the E3 program undergirded by LtE’s holistic approach on the financial independence of the organization is confirmed in the SCALA results.
This social entrepreneurial thread of the centrality of vision, trading, stakeholders’ participation in governance, profits reinvested for social purposes, innovation, and the status of the changemaker, enable LtE’s beneficiaries to not only be economically active, but to become entrepreneurs. This social entrepreneurial spirit contributes in turn to the organisation being able to generate its own revenue, thereby contributing to its long term financial viability.