VILNIUS, Lithuania—People rush in and out of the grocery store. Smartphones in their hands and earphones in their ears, the uniformed crowd members are too buried in their busy worlds to notice a woman in a red vest sitting among them. With curly black hair and a melancholy gaze, she sits alone behind a cardboard-lettered stall. The magazines on top of it are left untouched. Today, she has yet to sell a copy.
“We have had quite a journey, from [selling] 5,000 copies to 500,” explains Aurelija Dzedzevičiūtė, a founder of the Human.box, a social enterprise that has brought to Lithuania the idea of homeless-sold magazines “with a social side.” Not an easy undertaking, as the nation is stuggling with what is and what isn’t a social enterprise. After an ambitious start, the founders had to choose between giving up on the enterprise or continuing to publish. The latter won: Despite dramatically plummeting circulation, the magazine is still fighting for its place in the sun.
Photo courtesy of Tony Smith/Flickr
Across four continents, marginalized people peddling magazines “with a social side” have become a symbol of the entrepreneurial spirit. Will they be able to do the same in Lithuania?
“We don’t meet all of the criteria of [a] social enterprise,” says Dzedzevičiūtė. “We are not financially sustainable, but this is normal—we have just started.” At the moment, the amount of money collected from selling the magazine barely helps to make ends meet; after paying for publishers, it is just enough to cover the vendors’ share, and everyone else (including the founders of the enterprise and its journalists) works for free.
Originally, such a business model was intended to benefit both the seller (for whom, in some cases, it is the only way to survive) and the developer, as vendors buy the magazine for half the price they sell it for and get a chance to earn the difference.
“But September [2013] wasn’t the best time to start,” Dzedzevičiūtė admits. Without professionally developed training and motivational programs and no social workers as part of the team, the project has little chance of becoming self-sustainable. “Like many other … startups, it’s financial resources we need to work on the project,” she admits, citing Human.box’s Lithuanian and foreign industrial siblings, which struggled similarly in their beginnings.
One of them is The Big Issue, a street magazine of the same ilk, currently being peddled by marginalized people across four continents and offering financial support for other social enterprises via its own Big Issue Invest arm. It received a significant $50,000 seed investment from The Body Shop, a big and socially active name in the beauty industry that promoted fair trade products way before it was cool.
Photo courtesy of Human.box.
The third issue of Human.box (Žmogus.dėžė in Lithuanian) magazine.
Big names never backed Human.box, but that didn’t mean the business was over before even starting. Still, it’s usually the case that social entrepreneurs cannot bring forth social value without early financial incentives.
“Yes, you still need capital at a first stage,” says Uday Thakkar, CEO at Red Ochre, concurrently a social enterprises consultancy and its own social enterprise. “But there’s lots and lots and lots of money waiting for you out there,” he adds, putting the figure at an impressive $14 trillion (U.S.). But to partake in that bounty, he says, a condition exists: “You just have to be good in the inside as well as outside.” In other words, you cannot just claim to be a social enterprise; you have to really act and feel like one.
It’s not as easy as it might seem. First, you have to have a working and solvent business model, which took over a year for the founders of Human.box to develop, even with the necessary working blueprint from similar existing companies. Then you have to aim for long-term sustainability and an ability to create impactful social change. At the same time, you have to ensure you maintain a virtuous public image in people’s minds. “This is like banging on the door while doing some heavy lifting,” Thakkar says, laughing.
But it’s certainly possible, says Karen Lowthrop, the “copreneur” at Hill Holt Wood, a small woodland operating as an environmental social enterprise. “We haven’t borrowed a penny, we don’t have an overdraft. It’s simple—[if] we didn’t have the money, we didn’t spend [it].”
For the first 30 years of her social business, she didn’t receive a single grant. Instead, she did her best to make the social enterprise pay off while playing on the same field as other businesses. “We didn’t labor on [why] we didn’t have any money. We made people believe in our idea and buy in,” Lowthrop says.
For some, the idea of profitable social enterprises is far from straightforward. But Thakkar makes it clear that “it is not wrong to make a profit; it is what you do with it that makes you good.” As The Big Issue has shown, social enterprises can offer a hand up and not just a handout.
“If you would like to take care of others and give [the] homeless a bowl of soup, you would be a charity organization. Now you give them a chance to go to the garden, pick up the vegetables, wash them, cook the soup and eat it,” says Lowthrop. Or, in Human.box’s case, you give them a chance to sell magazines to then buy the soup.
“I say to my vendors, We are partners in this, it’s not me who provides help for you,” says Dzedzevičiūtė. “I give you a product, your job is to go and sell it. You are the face of this magazine.” Without everyone putting out a best effort, there is no “next month’s issue.” This has already been the case. Since September 2013, when the Human.box launched, only three issues have been published.
These are the times when everyone’s best isn’t good enough, and social enterpreneurs blame private companies for being too reluctant to slice part of their profits, despite the trendy “corporate social responsibility greenwash,” as Thakkar calls it, overtaking the scene.
But resources to do good can come in a variety of forms; one just has to find a way to play around the financial side. “The less it is about the money, the better,” says Thakkar. “You have to go there with a proposal. If you can only think where you need help, you will find the company willing to help you.
“But this won’t work out if you say, ‘Give me money and I’ll come up with an idea,’” he explains. This wouldn’t make you a social entrepreneur anyhow. Social entrepreneurs know how to sweat.