Why Social Entrepreneurs Are Sea Lions

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Business

Andreas Heinecke is a successful social entrepreneur: Through exhibition formats such as “Dialogue in the Dark,” he has created a profitable business that serves a social cause. In this essay, he shows how social enterprises like his own are falling through the cracks of state support in the Corona crisis. 

There are many answers to the question as to what social entrepreneurship might be. At its core, it always involves an innovation that significantly improves the lives of disadvantaged people and an entrepreneurial personality who scales that idea and knows how to utilize market mechanisms for social change. My blind colleague Daniela once came up with another definition: social entrepreneurs are sea lions.

Neither sea nor lion.

Yes, I am a social entrepreneur. For more than 30 years I have been pursuing an exclusively social mission by offering job opportunities to visually or hearing-impaired people and those older than 70 through the exhibitions “Dialogue in the Dark,” “Dialogue in Silence,” and “Dialogue with Time.” These exhibitions serve as a communication platform for people who, in their normal lives, wouldn’t find much to talk about or whose conversations would falter because of insecurities and lack of experience. Is it alright to say to a blind person “See you soon!,” when I know that she or he will never be able to actually see me? Or may I ask a palliative patient “What’s up?” or wish him “All the best!”?

We employ people who are marginalized. We move them to the center so they can contribute. Shortcomings are turned into potential, prejudice and avoidance are overcome, and pity is changed into respect. All of that has been spreading and bearing fruit: the idea has been exported to 45 countries as a franchise concept. In Hamburg, the Dialogue in the Dark exhibition has been running for 20 years non-stop.

"Shortcomings are turned into potential, prejudice and avoidance are overcome, and pity is changed into respect."
Andreas Heinecke

Worldwide, over 12,000 handicapped and elderly people have earned a wage and appreciation, and in the last ten years at least 10 million visitors have undergone an experience that has led to a shift in their perception of, and intercourse with, others. And here comes the good news. My education and employment programs do not depend on public funding or taxes. In Hamburg alone, we each year generate revenues of 2.7 million euros; most years we break even and are able to pay our 132 employees out of our own effort.

We generate exactly 87% of that amount and only a small percentage comes from funding, donations, and the public coffers. These state subsidies are standard benefits that are available to anyone who employs handicapped people, and the money serves to launch new projects. We contribute to the national economy by paying taxes and social security contributions. Last year, for example, the Hamburg business alone contributed nearly 1 million euros to the public purse.

Andreas Heinecke

Andreas Heinecke

Andreas Heinecke is a serial social entrepreneur. For his creation Dialogue in the Dark (and other exhibitions fostering inclusion of marginalized communities) he became the first Ashoka Fellow in Western Europe. Dialogue in the Dark uses exhibitions as a catalyst for change and to raise empathy for people with disabilities. More than 9 million visitors have gone through this experience, and thousands of blind guides and facilitators find employment through exhibitions and workshops. Andreas Heinecke is also a Global Fellow of the Schwab Foundation of the World Economic Forum. He has a PhD in philosophy and is a professor of social business/innovation at the European Business School in Germany. He is a member of the BMW Foundation Responsible Leaders Network.

This proves that social purpose can be pursued successfully with entrepreneurial methods. It is “sustainable,” as we all call it nowadays. This is what you get the applause and the awards for and what makes you travel the world to spread and scale your ideas.

Until Corona showed up.

This is where sustainability ends, because we seem to not tick the right boxes. Were we a public institution, such as a “normal” museum or any other kind of educational institution, we would have to close, too, but the budget wouldn’t collapse completely, as even without an income from entrance fees, the costs for rent and human resources would be secured.

But we go straight to insolvency, because without the income from ticket sales, no public subsidies will cover for our losses. In Hamburg alone, with monthly overheads of €230,000 (of which €180,000 are staff costs), the end of the road is quickly reached.

Empathetic contemporaries ask me whether celebrities or foundations couldn’t help, given that the business is such a success story. The celebrities I know are currently struggling themselves and are dealing with their own demons, professional decline, and crashing stock market prices. The foundations primarily focus on preserving their current assets and have to support the organizations already in their portfolio. In the final analysis, these foundations cannot offer support in the range needed, and so, apart from the donation of small sums, nothing happens. There is no foundation in Germany whose mission it is to take wounded social enterprises under its wing.

"When market distortions occur, we fall through the cracks."
Andreas Heinecke

This leaves government support. To what extent we too will profit from this support remains to be seen, as the non-profit sector does not receive the same consideration as the purely for-profit sector. Government support includes immediate, small-scale aid and loans. The latter must be regarded with caution, however: in the short run, loans can secure cash flow, but in the long run, the question remains unanswered as to how these loans can be paid back, especially in regard to the high volatility of an undertaking like this.

Moreover, we have never been an ongoing burden on a government budget. We do not receive regular institutional funding such as is received by normal museums or cultural sites. When it comes to the distribution of the already scarce funds, the focus therefore will be on those institutions that are already part of the existing network. Innovative institutions like ours with a clearly proven impact would have to be “nationalized.” But it is unlikely that more burdens will be placed on municipal budgets in a crisis like the one we are in right now.

These are bitter insights. So far, social entrepreneurship has been regarded as the propulsive force in the sluggish social sector; social entrepreneurs have livened things up and proven that one could do good and finance this independently. That a mixture of Mother Teresa and Richard Branson can achieve the perfect synergy of non-profit and capitalism and close an important gap. We have made a socially responsible contribution; we are leaders of ethical enterprises; we are innovative and, as a “not-for-profit,” are able to achieve “more than profit.”

When market distortions occur, we fall through the cracks. Corona provides cruel evidence: in the end, we will no longer be able to be social, as we will have to dismiss all our employees, and we will be unable to continue our educational mandate. Neither will we be able to continue as entrepreneurs, as it is a huge challenge to assert ourselves on the market even under normal conditions. Reserve assets or equity capital are a pious hope, which cannot be realized even after years of successful social operating. What we were proud of – fulfilling an important social mission in Germany and worldwide independent of external help –  is now falling apart. The gap that we have been able to close now is growing into a gaping abyss. And we are falling through this abyss.

Social entrepreneurs are truly sea lions.

Neither sea nor lions.

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