Haaretz: Social venture funds start to make their mark
Jul.20, 2012 | 8:44 AM–In the six months since the Coffee & Company cafe has been operating at Hewlett-Packard’s software R&D center, employees have been doing more than enjoying a cup of joe. They’ve been providing work for youth at risk, who account for about half the staff.
Cafe workers not only receive wages but also a supportive environment, including a staff social worker. It was all made possible by a partnership with the nonprofit group Elem, which helps troubled adolescents, and the social venture capital fund Dualis.
Social enterprises, which use business models to improve human and environmental well-being, are a new trend in the business world. But while the idea sounds laudable in practice, it’s tricky, as the people behind Cafe & Company have discovered.
The idea was first raised about two years ago at HP, recalls Efrat Altman, who’s responsible for social initiatives at the R&D center. She recruited a local cafe chain to manage the operation with Elem, but soon found it hard to reconcile the social goals and the needs of a profit-making business.
She soon realized it would be impossible to run such a big cafe with just young workers. The chain dropped out and Elem suggested that Dualis come in as a partner. Thousands of croissants later, Coffee & Company is a success.
“From a social perspective, the price we paid is that the entire staff isn’t youth at risk, but we are aiming for 50%,” Altman said. “From a business perspective, the place is managed excellently. It’s not easy to find a manager for a business with a social orientation.”
For Dualis, a pioneer in social venture capital, Coffee & Company was the eighth business it has invested in. Funded four years ago, Dualis is a model for how specialized funds can put capital to good use to help people in need.
Allan Barkat, its director, was a managing director at the Apax buyout fund, working on deals like the acquisition of Bezeq. Dualis works on a smaller scale, but it has 10 deals under its belt valued at about $1 million in restaurants, retail and software services that employ the handicapped, Arab Israelis and youth at risk…Read More>>
