Saturday, 16 January 2016 18:00

Overview

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The beginning
In 1978, BRAC’s flagship social enterprise, Aarong, was created as a support mechanism to BRAC’s existing sericulture programme so that the hand-spun silk they were creating could be successfully marketed at a larger scale. Aarong was established as a retail distribution outlet that offered a fair price to the rural suppliers while introducing the products to urban markets where both demand and consumers’ willingness to pay were the highest. Today, Aarong has transformed into a high surplus generating enterprise, operating as one of the largest retailers in Bangladesh. Other BRAC enterprises also came into existence at various times in similar efforts to create economic space for the poor. Although most of the BRAC enterprises were formed as programme support enterprises, majority of them currently operate as surplus generating ventures while maintaining their ongoing commitment toward alleviation of poverty via empowerment of the poor. Today BRAC operates 16 financially and socially profitable enterprises, across health, agriculture, livestock, fisheries, education, green energy and retail sectors, making significant contribution to local economy through creation of market linkages, entrepreneurs and employment opportunities. By targeting profitable and scalable businesses, BRAC enterprises are able to fullfill their social missions at a much greater scale while increasing financial surplus that reduce the organisation’s donor dependency and support BRAC’s development programmes and other innovations at a greater level. That is why BRAC enterprises continue to exist, expand and innovate through across multiple sectors.

 
The BRAC ethos of social entrepreneurship, the '3Ps': people, planet, profit
BRAC Enterprises strive to strike the right balance between financial surplus and social returns in order to achieve the targeted double/triple bottom lines. By operating as a surplus generating organisation that aims to alleviate poverty through its business operations and supply chain, BRAC succeeds in implementing its vision to serve society in a profitable manner.

Although all of the BRAC enterprises are committed toward achieving financial, social and environmental returns, BRAC takes a unique approach in defining its triple bottom line by focusing on three ideals: people, profit and the planet (the '3Ps'). A BRAC enterprise must meet three criteria in order to be considered a successful and sustainable business:

    It must serve the needs of poor people
    It must be environmentally friendly, and
    It must make surplus to help keep BRAC’s development works sustainable

Social enterprise – our objective
BRAC takes a holistic approach in conceptualising and developing each of its enterprises. As BRAC enterprises have expanded from programme support mechanisms to surplus generating enterprises with financial and social missions, each enterprise has ensured that it complies the four fundamental objectives of a BRAC enterprise:

    Creating job opportunities
    Generating surplus for BRAC in order to minimise donor dependency
    Ensuring long-term support and contribution toward the sustainability of BRAC’s development interventions such as microfinance, education and skills development etc.
    Becoming viable investments in the long run in order to act as ‘hedge’ against future liquidity

 
Advantages gained from social enterprises
Through its unique model and integrated operations, BRAC achieves five distinctive advantages across its enterprises:

Synergy
The integrated network of BRAC Enterprises, Development Programmes and Investments together beget a unique synergy and essentially create a 2 2=5 Effect. The surpluses generated by the social enterprises make BRAC more self-sustaining so that increasing numbers of poor people can become self-reliant.

Cross collaboration
BRAC enterprises maximise synergy, impact and value by their targeted outreach and integrative products and services across multiple enterprises.

Cross subsidy
Although BRAC enterprises aim for financial returns while fulfilling the social and environmental missions, not all enterprises are equally profitable. The cumulative surplus from BRAC enterprises combined are used to re-invest in the BRAC enterprises and support the development programmes, on an as needed basis, not on a pro-rata basis across enterprises.

Continuous innovation
BRAC’s extensive network of enterprises with the capacity to address major social needs allows BRAC to continually identify needs and create innovative solution to fulfil that need and create necessary market linkages.

Holistic support
Because of its integrated network and unique model, BRAC has the advantage, ability and capacity to provide holistic support and truly take care of its stakeholders, i.e. the entrepreneurs involved with the BRAC enterprises.

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