'Modern investors and consumers are more altruistic and want to create a better world instead of just improving their bottom line,' says MaGIC CEO Dzuleira Abu Bakar.
HELPING vet companies committed to effective positive change is the Malaysian Global Innovation & Creativity Centre (MaGIC).
There are many perks for getting the social enterprise status, including having an edge when participating in the government’s public procurement tenders, getting help in seeking funding, and receiving support from MaGIC, said its chief executive officer, Dzuleira Abu Bakar.
Although social enterprises are encouraged to be profitable through their business, the government is also incentivising other organisations that help them via donations.
Companies that make a contribution may qualify for a tax deduction of up to 10% of its aggregate income and individuals are eligible for a 7% tax relief.
“We are looking to expand more on these perks to advocate the social enterprise way as a choice of entrepreneurship,” she said in an email interview.
She admits that social enterprises may seem less competitive due to having objectives beyond just pure profit unlike traditional entrepreneurs.
However, she counters that modern investors and consumers are more altruistic and want to create a better world instead of just improving their bottom line, giving rise to the concept of “impact investment”.
This change in mindset is encouraging investments in organisations that make a measurable, beneficial social or environmental impact alongside financial returns.
“We see that in the social enterprise business model, the company is only financially viable if it’s making a social impact, and it can only drive change when it’s financially viable. This adds a cyclical bottom line that sets it apart from traditional models, ” she said.
The Social Enterprise Accreditation Guidelines was launched by the Entrepreneur Development Ministry on April 12,2019.
So far, 22 companies have received accreditation, while 202 have yet to apply for the status.
Also, social enterprises are required to reapply periodically to maintain their status, as the accreditation is only valid for three years.
“A good social enterprise is one that has clear goals with a verifiable track record and able to sustain both its social and financial goals for the long run, ” she said.
One gauge is Social Impact Measurement which measures a social enterprise’s effect in areas such as community development, environment, economic access, poverty alleviation and education.
Dzuleira says companies usually come from a pool of startups that have gone through MaGIC’s programmes.
