Cartography: Germany I

Cartography [n.]: Mapping, review

My trip through Germany in April 2015 gave me the unique opportunity to speak to eight support organizations in all four corners of the country: North, South, East and West. Six of them focus their activities on Germany and selected cities within (Social Impact Labs, Heldenrat, Impact Hub Berlin), two work with social entrepreneurs internationally (Yunus Social Business, The DO School), and Social Entrepreneurship Akadamie in Munich caters to both national and international social startups offering different programs.

Local & national programs

Social Impact Labs are very similar in the services and benefits they provide as part of their support program Social Impact Start. Locally, though, each Lab has strong local partners and runs pretty self-sufficiently. I wonder if any plans are in place to make use of their Lab-network across Germany (not to mention their program-partnerships with Impact Hub Zurich and Vienna!). The Impact Hub network sets a great example for sharing knowledge and experiences among their Hub facilitators and members (though I still don’t exactly know what that looks like behind their closed doors. Did my Honorary Membership invite get lost in the mail?).

Though still young, Impact Hub Berlin is gaining a lot of traction and seems to have found their niche in the German capital. Their new space is great, no question. Let’s see what kind of programs Leon ad his team manage to line up in the months to come and I shall check back in to see how things are going.

Impact Hub Berlin 2

Impact Hub Berlin

When I first started my research into the field of social venture support organizations, I insisted on the category of pro-bono consultants solely because I had heard of Heldenrat. Strictly speaking I am looking at structured support programs for social entrepreneurs and one could argue that they only partly meet this definition. At the same time, they have a process in place of helping out struggling social entrepreneurs and charities. They are able to fill gaps in the support landscape and connect startups in need with relevant support organizations. I have tremendous respect for the team of volunteers around Tom and Birgit for devoting their free time to being volunteer advisers for startups and nonprofits in need.

International Programs

As far as internationally-oriented programs go I spoke to Yunus Social Business, the DO School and Social Entrepreneurship Akademie. Yunus Social Business is headquartered in Frankfurt and manages their core operations from there. There was little opportunity for insights into their programs at work which take place in seven countries around the world. However, their attempt of using their participants’ feedback to inform their program is remarkable even without my field visit. This seems like an easy and obvious mechanism for many of us who I’m sure have at least heard of the Lean Startup Approach, yet Yunus Social Business was the first social venture support organization who was able to make concrete statements about the effectiveness and relevance of their training schedule and services by gathering feedback from their participants.

Starfish-24-1700x945

DO School Fellows of the Green Store Challenge

While working at the DO School over the period of 18 months I was lucky to work closely with several cohorts of social entrepreneurs. Their one-year program goes beyond supporting them in developing a plan for a social venture (during their ten weeks in Hamburg) and implementing it (ten months after) in their home communities. A lot of work within the program is dedicated to ideation, facilitation and developing participants’ personalities. After all, for the ten weeks in Hamburg, they live and work together 24/7. It’s fair to say that the dedication of Romy and her team make the difference in this program.

How many #SocEntSupport programs assess their relevance and effect through participant feedback? Click To Tweet

Social Entrepreneurship Akademie at the opposite (South) end of the country sets a good example of building up strong partnerships to secure the financial sustainability. Speaking to Kristina I realized what energy (and philanthropic capital) mutually-beneficial partnerships can bring to the table. With their active engagement with the European Venture Philanthropy Forum and the Global Social Entrepreneurship Network I think of Social Entrepreneurship Akademie as one of the agenda-setters in the field in Germany, and Europe.

 

Cartography: Germany II

Cartography[n.]: Mapping, review

If you have read Field Study: Germany, you know that I did some research on social entrepreneurship in Germany before diving in. One of the studies emphasized that strong welfare organizations make it difficult for German social entrepreneurs to establish and position themselves. Talking to Tom Leppert at Heldenrat, I had the chance to discuss this point: “We have a huge social sector that fits the category of social enterprise, we just don’t call it that. Our social economy has always been strong.”, said Tom.

IMG_20150227_053005

View of Hamburg’s Hafencity after a day at the DO School

Let’s take a moment to clarify what we mean by Social Economy: it basically describes the part of our economy that caters to our social needs as human beings. In other words, the Social Economy delivers products and services to address social issues. Tom: “Just look at Social Economy institutions like hospitals and health care, ambulatory care, labor market programs or youth services. They all run as social enterprises, only we call them welfare institutions. The underlying concept is the same. It’s an industry with an annual turnover of more than 165 billion Euros employing some 4.4 million Germans1)http://library.fes.de/pdf-files/wiso/10615.pdf. It’s pretty big and yet still, we call for the promotion of social entrepreneurship as if it’s the Next Big Thing. Ashoka, for example, has understood that and is getting welfare organizations like Malteser (click here for Malteser International) on board through cooperations. And for good reason. Welfare organizations may come across as from another time, but they have a lot of experience in setting up sustainable business models and acquiring funding.”

Caritas, e.g., runs U25: one of the best peer-based suicide prevention programs for youth Click To Tweet

… that  I have ever seen.”

To tell you the truth, apart from volunteering with the Salvation Army in Paris, I have had very little contact points with welfare organizations, certainly not in Germany (part of my East-German heritage?). Once I started browsing their websites, I was pretty astonished to see how much work they do, for how many vulnerable communities in Germany. As I dove in, I discovered that Tom was right, many of these welfare organizations are in fact registered as limited liability companies with tax-exempt status (gGmbH).

Where does this leave us?

To me, Germany’s reputation as a welfare state has won new meaning. I used to think this was due to generous government funding of welfare – and there’s truth to that. But I have also come to understand that our Social Economy is driven by savvy social entrepreneurs in large established welfare organizations. And suddenly, Germany seems to have a wealth in experience and know-how in social entrepreneurship. How can we utilize this and integrate traditional welfare organizations and the newer German social enterprise movement led by many support organizations that I have met? Can this be one approach to filling gaps in the support pipeline and growing an ecosystem that offers capacity building not only to early-stage social startups, but more advanced entrepreneurs, too? I am pleased to see that large players such as Ashoka take it upon themselves to explore this avenue. They certainly have the reputation and legitimacy to play a lead role in this experiment. At the same time, I encourage smaller support organizations to think in the same direction and see what can be learned from local welfare organizations.

Do we need a #SocEnt label and how do we incorporate all relevant actors and stakeholders? Click To Tweet

I recently spoke to two Social Venturers in Germany via skype after returning to the US. They are concerned with the low visibility of the social enterprise sector in Germany and are looking for ways to increase public awareness and participation which raises another question: How do you represent a sector part of which has been around for so long under a different label (“Welfare organizations”)? Do we need this new label and how do we incorporate all relevant actors and stakeholders?

References   [ + ]

1. http://library.fes.de/pdf-files/wiso/10615.pdf

Spotlight: Thomas Leppert

Tom_long

What drives you?

To help those people who actually get up from their sofas in order to do something. I am not an entrepreneur. When I can meet someone over coffee to listen to his or her idea, and support them in making it become a reality – that’s when I’m at my best. I always ask myself how I can support the ones who are out there to create change.

Biggest SocEnt trend you have seen in the last 5 years?

It has expanded a great deal, it has arrived in mainstream. Don’t get me wrong, it’s not like every German knows what social entrepreneurship is, but it has become a lot more popular, and it has the infrastructure to go with it. These days, if you want to start a social enterprise, it is much easier to find support than it was even ten years ago.

Currently reading

Wanted: Heroes. Project management for honorary posts, by Michael Wurster and Maria Prinzessin von Sachsen-Alternburg

Background

Tom worked as Project Manager in the private sector when in 2004 he came across startsocial. “I was looking for an opportunity to work pro bono and had tried several things but nothing really stuck. At startsocial, I was able to contribute my knowledge and experience as a mentor and coach. I started thinking that the social sector needs exactly that: a consultancy for social projects that do not have the budget for one the large consultancies. Together with my colleague Hilke Posor, we put more thought into this idea and in 2005, we started out as „social startup“ – which is now Heldenrat. I spent the last ten years building up some expertise in the field of social economy and – as part of that – social entrepreneurship; in part through my work for Heldenrat, in part through my dissertation on social entrepreneurship (link).”

Tom now works at Robert Bosch Stiftung as Program Officer with a focus on projects fostering civil society within their department of Education, Society & Culture, and continues to be on the board of Heldenrat.

twitter@politom

Spotlight: Birgit Schunke

Birgit_long

What drives you?

Our economy can, and should be, human. I want to contribute to that through connecting worlds, through teaching and empowering people and teams, by inspiring them to be open to other ways of operating.

After the war, our motto was “Economy Above All!”; to get Germany back on her feet, people had to function and other areas were subordinated, but I think we’ve been overdoing it for a while now. It is time to find a new balance among economy, social sector and the environment, overall and within companies and within individuals and to learn from each other to make our one world a bit better.

Biggest SocEnt trend you have seen in the last 5 years?

Whether business or social sector: more and more people feel the need to change something, to live and work socially, sustainably and meaning-oriented. I believe the “worlds” are coming closer together and it is more about being human and integrating the different parts of our lives.

There might be more collaboration and synergies between big companies and social entrepreneurs, for example, it is not green washing but real “making the world a better place”- together.

Currently reading

  • A whole new mind, by Dan Pink (TED talk here)
  • Start With Why, by Simon Sinek,
  • Reinventing Organizations, by Frederik Laloux

Background

Birgit is a consultant for organization and project management, lecturer and facilitator. Since 2008 she has supported social entrepreneurs and non-profits at Heldenrat e.V.

After her international business studies she worked in Marketing and Sales and before switching to the social education sector as branch manager. Since her certification in project management she has been self-employed. Birgit supports social projects from start to evaluation and business projects especially in social aspects. She advises social entrepreneurs, coordinated the start of the Social Impact Lab in Hamburg, gives lectures and seminars at different Northern German colleges and is co-founder of the Heldenrat GmbH.  In all her activities she seeks the balance of economical and social aspects and to bring people and worlds in exchange.

twitter@Heldenrat

Heldenrat

During my time in Hamburg I was happy to schedule an interview with Heldenrat (“Advice for heroes” – very liberal translation). I had met one of the founders – Tom Leppert – during a Stammtisch (monthly networking event, usually comes with beer) at Social Impact Lab Hamburg a few years ago. I had shared with him a very, very early version of Social Venturers. While Tom had moved on to a different city, I was able to meet with Birgit Schunke, a freelance coach and project manager, who spends some of her spare time – like all of her Heldenrat colleagues – providing pro-bono support to nonprofits and social entrepreneurs in Northern Germany.

Heldenrat was founded in 2005 by Tom Leppert and Hilke Posor who – at the time – were running Start Social at McKinsey: an incubation program for social initiatives. Finding the barriers to entry too high, they decided to set up “social startup”, which later turned into Heldenrat with the objective of applying their consulting skills and private sector expertise in the social sector. Nonprofits and social entrepreneurs contact Heldenrat with a support request for a specific challenge they are facing, and if at least two team members have the capacity and relevant expertise to support, it’s game on!

The Heldenrat Approach

The Heldenrat team understand themselves as process consultants who assume that their support-seekers have all relevant knowledge and insights to solve the issue themselves; Heldenrat’s role is to facilitate access to that knowledge. According to Birgit, “a good support program helps the individual develop their own ideas rather than forcing him or her into some pre-defined consulting process that doesn’t suit their needs. That includes offering individual support. One entrepreneur may need an office space while the next just needs a sparring partner every now and then. to me, it’s important to find the right balance between providing them with business expertise while focusing on their leadership qualities and personal development.”

Today, Heldenrat is active in six German cities: Hamburg, Berlin, Cologne, Bremen, Luneburg, Kiel. Knowing Tom he is already recruiting volunteers for his new location Stuttgart. The organization is a nonprofit itself and financed through donations. During our conversation I got the impression that Birgit was pretty eyes open about what Heldenrat can and cannot do. They provide one-off advisory on a specific entrepreneurial challenge, they do not compete with other incubators or other accelerators. Birgit adds:”It would be great to have an overview of who else is out there offering support. We would love to know where to send social entrepreneurs that look for more structured support. All of us supporters would benefit from sharing a network of experts and tapping into a common pool of resources and tools.”

I found some interesting business models for support organizations during my time in Belgium and the Netherlands, and I am a defender of financial sustainability for the support sector – but with Heldenrat, I can’t help but admire the generosity and dedication with which the team devotes their free time to helping social entrepreneurs out. Here is my theory for why it works:

  1. Heldenrat advisors get to pick which projects they want to work on based on their current capacity and interests.
  2. The limited nature of the intervention (focus on one issue) creates no dependency; it helps social entrepreneurs climb a hurdle, but once overcome, they move on independently.

I really like their approach. I work by myself and rely on the support and advice from friends and my network. Every now and then, it would be great to have a sparring partner from the outside; someone who doesn’t know Social Venturers and can advise on bigger questions like strategic positioning or process optimization.

Heldenrat caters to a niche in the sense that they provide structured support around challenges that are too small to join a program for, but nevertheless help their participants (social entrepreneurs and non-profits) move forward. A great complimentary service that helps fill in the gaps in between support programs (see what Discovered has to say about that).

twitter@Heldenrat

heldenrat.org

Field study: Germany

Field study [n.]: Preliminary research

First things first: Apologies for the excessive use of footnotes in this post. I want to give credit where it’s due and not get into trouble for plagiarism. I worked through a number of studies – some of which are great to dive deeper into the topic – and have summarized their main points. You will find MY observations at the end of this series in the Cartography post.  

My trip through the Netherlands and Belgium was followed by a month in Germany which gave me some time to freelance and the opportunity to visit support organizations in Frankfurt, Berlin and Hamburg. Having worked in the German social enterprise support sector, I had to challenge myself to step out of my preconceptions and try to see the sector for what it is.

I was astonished to find how much research had already been done on social entrepreneurship in Germany – it was almost daunting to even start diving into the topic for fear of what I would find, and how much. Here are some key insights from the studies I looked at:

Social Entrepreneurship is not new to Germany, some #SocEnt are as old as 30 years. Click To Tweet

… but they often don’t identify as such. The five most relevant social issues in Germany – according to a SEFORÏS report1)Wolf, Myriam (2014). The State of Social Entrepreneurship in Germany SEFORÏS Country Report. (based on another study by the German Ministry for Education and Research2)Müller, Susan, Dominik Rüede, Kathrin Lurtz, Hartmut Kopf, and Peter Russo (2013). Deutschland 2030: Herausforderungen als Chancen für Soziale Innovationen. World Vision Center for Social Innovation, Wiesbaden.) are

  1. Labor market: unemployment and skill shortage
  2. Education: coupling of socio-demographic background and level of education
  3. Income and wealth: increasing division between rich and poor, failure to generate income to secure existence
  4. Environment: Coupling of resource use and economic growth
  5. Health: healthcare provision (aging society) and lifestyle diseases.

Unexpected findings

Apparently, strong welfare organizations make it tricky for social entrepreneurs to find their niche and establish themselves as a unique field. It’s almost like the “market for addressing social issues” is already among organizations like Deutscher Caritasverband (German Caritas Association), Arbeiterwohlfahrt (workers’ welfare association) or Diakonie, making it difficult for new-comers such as social entrepreneurs to position themselves and try out new approaches.3)Wolf, Myriam (2014). The State of Social Entrepreneurship in Germany SEFORÏS Country Report.

Risk-aversion of Germans: “German society tends to be risk averse. Risk averseness is one of the major cultural factors impeding entrepreneurial activities and ultimately also influencing availability of funding for social enterprises.”4)Brixy, Udo, Rolf Sternberg, and Arne Vorderwülbecke (2013). Global Entrepreneurship Monitor (GEM) – Länderbericht Deutschland. Hannover. I will add that in former East Germany – having been born and bred there myself – individual behavior was not necessarily encouraged. Under socialism, the market was heavily (if not exclusively) regulated by the state – going the extra mile didn’t pay off in most cases. During the first 19 years of my life, I didn’t know a single entrepreneur.

Under socialism, entrepreneurship was not encouraged. Does it show in today's #SocEnt sector? Click To Tweet

I believe this mindset is still deeply rooted in East-Germans and hampers their entrepreneurial spirit. I wouldn’t assume this is true for all Germans that lived on the Eastern side of the wall, but it is one influencing cultural factor.

Other Influencing Key-Factors

According to the Global Entrepreneurship Monitor 2013, Germany ranks high in terms of physical infrastructure, government programs and protection of intellectual property – factors which create a nurturing environment for entrepreneurs – while ranking low with respect to entrepreneurial education in primary and secondary schools, labor market conditions, and knowledge and technology transfer – factors that don’t create this kind of favorable environment.5)GEM. Global Entrepreneurship Monitor 2013. Social enterprises can choose from over 20 different legal forms within the German system, none of which is exclusively dedicated to, nor apparently suitable for, social enterprise.6)Wolf, Myriam (2014). The State of Social Entrepreneurship in Germany SEFORÏS Country Report. Instead, social enterprises register as

  • Stiftungen (foundations),
  • Vereine (voluntary associations),
  • GmbHs (limited liability companies) and
  • Genossenschaften (co-operatives)7)Zimmer, Annette & Bräuer, Stephanie (2014). The Development of Social Entrepreneurs in Germany. Westfälische Wilhelms University, Germany.

which makes a head-count very difficult. There also is the legal form of a charitable limited liability company (tax exempt status) which is not mentioned in this study. In 2011, Wissenschaftszentrum Berlin counted

  • 580,000 voluntary associations
  • 18,000 foundations
  • 9,000 limited liability companies with tax exempt status, and
  • 8,000 cooperatives in Germany.8)Priller, E., Alscher, M., Droß, P. J., Paul, F., Poldrack, C. J., Schmeißer, C., & Waitkus, N. (2012): DritteSektor-Organisationen heute: Eigene Ansprüche und ökonomische Herausforderungen. Ergebnisse einer Organisationsbefragung. Wissenschaftszentrum Berlin für Sozialforschung. Berlin.

This leads to a total number of 615,000 organizations in the Third sector. Not bad for a country with a population of 80 million. However, the lack of a separate legal form for social enterprise results in them remaining un-differentiated from other third sector organizations such as charities or even parental or neighborhood initiatives. To be honest, this troubles me.

How important is a legal form for #SocEnt in Germany? Click To Tweet

On the one hand, this lack of differentiation makes it difficult to promote the social enterprise concept in an environment that is already heavily influenced by strong welfare organizations. On the other hand, I argue that legal forms don’t make social enterprise. I believe that mission and impact will dictate legal form, not vice versa. Thoughts anyone?

Scheuerle & Bauer give an insight into financing mechanisms of social enterprise in Germany arguing that certain issues lend themselves more to earned income generation ( e.g. related to environment) than others (social services).9)Scheuerle, Thomas, and Albrecht Bauer (2013). Social enterprises as an investment? Frankfurt.

Financing

Financing structure of social enterprises in Germany. Source: Scheuerle, Thomas, and Albrecht Bauer (2013). Social enterprises as an investment? Frankfurt.

 

What social enterprise support?

None of the reports I studied mentioned support organizations. The only reference to our work, my dear readers, is the last sentence of chapter 4.2 in the SEFORÏS study (2014, p. 11): “Entrepreneur support models, however, only recently started to emerge in Germany but are perceived as highly important for the further development of social entrepreneurship.” Amen. Though I wonder how the authors define “recent”. After all, Germany has a number of strong players in the support sector for social entrepreneurs (swing over to The Changer via google translate for a longer list):

Reason enough for me to visit some of them and learn more about their different approaches to supporting social entrepreneurs around Germany and abroad.

References   [ + ]

1, 3, 6. Wolf, Myriam (2014). The State of Social Entrepreneurship in Germany SEFORÏS Country Report.
2. Müller, Susan, Dominik Rüede, Kathrin Lurtz, Hartmut Kopf, and Peter Russo (2013). Deutschland 2030: Herausforderungen als Chancen für Soziale Innovationen. World Vision Center for Social Innovation, Wiesbaden.
4. Brixy, Udo, Rolf Sternberg, and Arne Vorderwülbecke (2013). Global Entrepreneurship Monitor (GEM) – Länderbericht Deutschland. Hannover.
5. GEM. Global Entrepreneurship Monitor 2013.
7. Zimmer, Annette & Bräuer, Stephanie (2014). The Development of Social Entrepreneurs in Germany. Westfälische Wilhelms University, Germany.
8. Priller, E., Alscher, M., Droß, P. J., Paul, F., Poldrack, C. J., Schmeißer, C., & Waitkus, N. (2012): DritteSektor-Organisationen heute: Eigene Ansprüche und ökonomische Herausforderungen. Ergebnisse einer Organisationsbefragung. Wissenschaftszentrum Berlin für Sozialforschung. Berlin.
9. Scheuerle, Thomas, and Albrecht Bauer (2013). Social enterprises as an investment? Frankfurt.