"CRUNCH" Time for Nine Social Enterprises

Photo: The 9 social entrepreneurs receive their Crunch Survival kits from Victorian Minister Minister for Community Development Lily D’Ambrosio. (Photo: Ryan Witcombe, Pro Bono Australia News)

Nine Victorian social enterprises – businesses with a social purpose at their core – will spend the next four months developing their business plans in partnership with leading companies and business students, in a bid to share in a $1 million investment fund.

The Crunch initiative, launched by Social Traders, is matching nine innovative Victorians with some of the country’s leading companies in a unique social enterprise development challenge.

The entrepreneurs, with the support of business mentors and Social Traders, will develop a fully-scoped plan for their business idea and pitch for a share in a $1 million investment fund.

David Brookes, Social Traders Managing Director says The Crunch incorporates the fun elements of competition and creativity with serious business thinking and investment opportunities.

Brookes says the nine entrepreneurs and their mentors have four months to do the hard work of turning promising ideas into the makings of a viable social enterprise.

He says it is a targeted approach: it is not a grant or a handout – they must develop a business model for an enterprise that is financially sustainable with a social mission at its core.

He says each enterprise will emerge from The Crunch confident that they have a plan to make their social enterprises work and a pitch to help them secure the investment they need to get it off the ground.

The Crunch, modelled on a highly successful UK program called the Spark Challenge, is open to enterprises addressing a broad spectrum of social and environmental challenges. It is being piloted in Victoria in 2010-11 and Brookes hopes it will be expanded to other states in future years.

From a highly competitive field of 79 applications from across Victoria, nine enterprises have been selected to participate in the pilot:

• Activate Australia, a Not for Profit organisation based in Broadmeadows, wants to develop a social enterprise that involves young people in leadership programs for the corporate world.
• Brunswick Industries, a social enterprise that employs 60 people with a disability in a retail quality packaging business, wants to expand their business into food packaging to generate more jobs.
• Campfire has an idea to build a business that promotes cultural, spiritual and racial tolerance through short films.
• Creative Clunes, a Not for Profit community organisation actively working to generate growth and renewal in the village of Clunes.
• Energy Innovation Cooperative Ltd is helping Gippsland communities to adopt renewal energy technology that is affordable and appropriate.
• North Yarra Community Health wants to establish a for-profit family medical clinic to help fund and expand their community-based health and welfare programs in the Cities of Yarra and Melbourne.
• Hub Melbourne, based at Donkey Wheel House in the CBD, is developing a business model to bring the international Hub concept to Melbourne.
• Our Shed Community Resource Centre, based in Eaglehawk, wants to develop a business recycling discarded wooden pallets to help fund the centre and its community activities.
• Renew Australia wants to develop a business to make empty retail spaces available to artists and community initiatives leading to significant urban renewal.

The Crunch partners in 2010-11 are Telstra Foundation, Australia Post, Leadership Victoria, Melbourne Business School, Transfield Services and Westpac.

Richard Leigh, founder of Campfire, hopes being part of the Crunch will help him to understand what is needed to turn his idea into a viable business model.

Richard Leigh hopes being part of the Crunch will enable him to build his Campfire enterprise into a viable business.  (Photo: Ryan Witcombe, Pro Bono Australia News)

Over the last three years, Campfire has operated as an online and live hybrid film festival exploring matters of faith, religion and spirituality. The new business model includes introducing school subscriptions for film downloads, bringing Leigh’s multi-faith short films into Australian classrooms.

Leigh says he found out about the Crunch when looking for grant opportunities online, and was amazed to find a program that fits so well with what he is trying to do.

He says he look forward to working with his partners from Australia Post and Melbourne Business School, as well as learning from the other social enterprises through a series of workshops.

John Montague, Chief Executive of UK-based TREES Group, established the Spark Challenge in 2007 with Big Issue Invest founder Nigel Kershaw. Montague says they saw the need to change existing attitudes towards the private sector that were common in the Not for Profit sector, so that organisations could see the potential of forming partnerships with the corporate world.

In creating the Spark Challenge, Montague says they were guided by two principles – to use Government as an enabler, not as a doer; and to form complimentary partnerships with corporates.

Three years on and Montague says the Spark Challenge is now ingrained in the plans of business partners – to the extent where businesses have more people applying to be part of the partnership program than can be placed.

He says the opportunities and lessons learnt from the partnerships have been more valuable to the social enterprises than the investment funds.
 

John Montague started the Spark Challenge in the UK, which the Crunch is modeled on. (Photo: Ryan Witcombe, Pro Bono Australia News)

Montague says after 3 years, it is evident that the program is a success. Out of 15 winners of the Spark Challenge, only 1 has closed down. He says their own analysis of the social return on investment of the programs shows that each pound of investment has received a 4 pound return over only 2 years.

Social Traders was established in 2008 with seed funding from the Victorian Government and a private Foundation to support the development of social enterprise in Australia.

The $1 million will come from the Social Enterprise Development Fund, which has been established by Social Traders and corporate and philanthropic partners.

Follow the nine teams and their journeys between October 2010 and February 2011 at www.thecrunch.socialtraders.com.au

Keep up to date with the Campfire project at www.campfire.org.au