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Taiwan's enterprising social services

Publication Date : 02-12-2013

 

Buy a magazine from a homeless person, have your car washed by a burn victim, shop for a bag made with fair-trade yarn.

A multitude of social enterprises, which prioritise jobs and a steady livelihood for the underprivileged rather than maximising profits, have sprung up in Taiwan in recent years.

The trend is fanned by growing awareness of how commerce can be harnessed to help marginalised groups, as well as a government keen to keep jobless rates low in the face of global economic uncertainty.

The enterprises offer a wide spectrum of products and services, from cakes and ornaments to agricultural cooperatives and contract cleaning.

One of the more prominent ones is the cleaning service launched in 2011 by The First Social Welfare Foundation, a 33-year-old group which trains, counsels and rehabilitates the mentally disabled.

Called The First Environmental Cleaning Social Enterprise (FECSE), the service has won contracts from government agencies like the National Science Council, the Taipei city government and Sun Yat-sen memorial hall.

Of the service's 318-strong workforce, 62 are disabled while the rest include middle-aged and older workers, single parents and former convicts.

Lai Mei-chih, a co-founder of the foundation, told The Straits Times the workers earn over the monthly minimum wage of NT$19,000 (US$642) compared with the NT$4,000 to NT$7,000 they used to make before the enterprise arm was launched.

"Previously we were given only ad hoc jobs, and the workers had to go to different places to work almost every day," said Lai. "Now we can bid for contracts like a normal company, and get paid more."

The outfit made NT$34 million in its first year.

This year, it is set to make NT$110 million, NT$30 million more than expected, she said.

The government hopes for more such success stories. The Council of Labour Affairs has been offering subsidies and consultation to social services and charitable bodies islandwide for 10 years to help them transform into social enterprises or create business arms.

November - designated Social Enterprise Month by the ministry - saw seven large-scale events combining forums and bazaars held across Taiwan to promote the idea.

Prominent business figures like Acer founder Stan Shih extol the model as a way social services and industries like the arts could become more self-sufficient.

"The essence of enterprise is to use limited resources to maximise value," Shih told a forum on social enterprises organised by accounting firm KPMG and GreTai Securities Market in October. "Through this way, we can make more efficient use of the government's resources."

Hsuan Min-chih, vice-chairman of United Microelectronics Corp, meanwhile, encourages young Taiwanese entrepreneurs to leverage on the model for their start-ups.

Fines Lee, 43, embodies the latter. A Web designer and co-owner of a blog hosting website in 2009, he discovered The Big Issue, a non-profit magazine which originated in Britain 20 years ago and employs homeless people as street distributors.

Keen to try his hand at traditional media, he promptly flew to England, got the authorisation from the magazine's publisher, and launched Taiwan's Big Issue in April 2010.

While admitting his main motivation was not charity, Lee said the fact that the venture could also benefit the homeless was a big push factor.

"Three years ago, few people in Taiwan were familiar with the concept of social enterprises. I thought it would be great if we could introduce something that had been working in Britain for 20 years," Lee told The Straits Times.

He recruited his first distributors from shelters and halfway houses for the homeless.

From a few thousand copies for the inaugural issue, the monthly magazine - which features reports and commentaries on international issues written by Taiwanese contributors based around the world - now sells more than 30,000 copies at NT$100 each.

With half of that going to the distributors, that translates to an income of NT$1.5 million for the 70 homeless people who now work for the company.

But as social enterprises grow, more people are calling for the sector to be regulated to prevent abuse.

There is no law defining such businesses and their attendant legal and financial obligations.

And the authorities are hard-pressed to say exactly how many groups can be classified as social enterprises. Estimates range from 150 to more than 5,000.

FECSE, the cleaning service staffed by the underprivileged, will pay 6 per cent in taxes this year, said Lai, compared with the 17 per cent for comparable for-profit companies.

In the long run, said Lee, the most important factor is the quality of the product or service.

"In the beginning, people may cut you some slack or support you because you're a social enterprise. But eventually you have to be competitive to survive," he said.

"You can't force consumers to buy your stuff if you're no good."

*US$1 = NT$29.59

 

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