A sustainable business model for social enterprises or purpose-first companies is a challenge for many entrepreneurs. I was drawn to Jen Baughan, who converted a grant-funded project for education into a sustainable business through building partnerships with companies.
The company, Solutions for the Planet, delivers the Big Ideas Programme, which is a STEM and enterprise programme with a focus on sustainability issues that matter to young people. Delivered in secondary schools in the UK and using employee volunteers from their business partners, the programme develops creativity, encourages teamwork and develops wider employability skills in students.
Here is my interview with Jen, the CEO of the company.
AltCap: How did Solutions for the Planet start?
Jen: Back in 2013, when I was doing my Master's in Business and Community at the University of Bath, I was really interested in the relationship between business and community, and sustainability has always been a passion. I was introduced to someone who sat on the board of an organisation that ran a project called Solutions for the Planet. This project was 100% grant funded by the Lottery. When the grant ended, there was no money left and the decision was made to shut down the business. At that point, Kat (the other co-Founder of Solutions for the Planet) and I were both in transitions. We thought that one of the challenges here is that this project in itself was not sustainable. So we needed to come up with a funding model that could sustain itself.
We put together a funding model that we pitched to the then board to turn the project into a business. The board approved the idea, appointed us as Directors and that's how we started. In some ways, we were lucky because the timing was great. In the first year, we had GBP 14,000, and we inherited two relationships with businesses and six schools.
AltCap: What is the problem that you are trying to solve?
Jen: The Big Ideas programme brings businesses into schools, giving young people exposure to employees. In terms of careers guidance in the UK, it wasn't so structured when we started. We are creating space for young people to be creative and to problem-solve. In our programmes, compared to the silent lesson format, students connect with themselves, people, and the planet around them, take responsibility and learn from and with each other. Both mentors from businesses and young people find the programme mutually beneficial.
We are also tapping into the challenge of a lack of young people coming into the workforce with key employability skills with a particular focus on STEM skills, critical thinking, and problem-solving. So we are focused on skills rather than subjects—it's not about science or technology, but the skills behind that, and how they can be applied for a positive purpose in a business. Students are learning how to put together businesses designed to have a social and environmental impact at the age of 12.
AltCap: So, what is the business model? Are you a non-profit or a business?
Jen: In many arenas, we are still thought of as a not-for-profit. But in my view we are clearly a for-profit business. As a legal structure, we're a company limited by guarantee. We're a social enterprise because we have environmental and social aims in our articles of association, and we have an asset lock. We are committed in our articles to reinvest over 50% of our profits back into the business. But we actually reinvest 100% of our profits back into the business. Our profits are ploughed back into our environmental and social aims rather than our personal gains.
AltCap: So, how do you create revenue for the business? One of the challenges for social enterprises is the funding gap—finding the paying customer to fund the impact you want to create for beneficiaries.
Jen: When we started, we sat down and wrote all the features of the Big Ideas programme. These included mentorship, community, and sustainability. Then we mapped the features out to key companies, particularly in engineering, construction, and manufacturing. What were the challenges they faced and will face in the future? They have an aging workforce and face challenges around diversity with not having enough women, black or ethnic minority backgrounds in their workforce. These issues could lead to stale thinking when people are in a business for a long time.
We identified the program's advantages for such companies and looked at how they could benefit and how much they would pay for the value they received from these advantages. For example, talent development, innovation, and sustainability--often, we find these three areas and teams are not integrated. Through our programs, companies have started to see the connections and embed these areas together.
We also help companies look at sustainability and social value and how these tie in with the companies' work.
Third, we support businesses in communication and business development. The companies can build connections and network with other companies, suppliers, and customers through our programme as well as their own employees. The national finals take place at Westminster Palace, where the businesses get to meet with MPs. So this is another great way to add value and enhance relationships with other businesses.
AltCap: How did you come up with the pricing?
Jen: This has been a huge learning journey for me. We started off with cost-based pricing but it has become clear over the years that this is not the best approach. We are all about delivering value and so we have re-worked our pricing to be value-based rather than cost-based. We thought about how much businesses spend on learning and development for their employees or how much they spend on innovation training and most importantly we spoke to them about what they valued and how much they were willing to pay for it. These are not always easy discussions but are vitally important.
AltCap: What scaling challenges did you experience?
Jen: Initially, the biggest challenge we faced was capacity. There were only two of us, and we had to deliver the programs and do business development at the same time. In order to grow, we needed to invest more time and energy in the business development side while continuing to deliver high-quality programs.
We solved that in year three of operations through a GBP 50,000 grant, which allowed us to hire two people, allowing Kat and me to do more business development. This was a huge leap for us. We went from GBP 50,000 to GBP 160 K in sales because we could focus on driving sales.
Second, managing expectations with companies as to what we could do now with our resources is important to scaling sustainably. For example, one of our corporate partners wanted us to open in a new region, but we were not ready at that point in time with our team. So we agreed on a realistic timeline for the launch, working together to bring in the right people for the growth needed. So being able to say no and have those conversations with businesses is important.
AltCap: Do you have any examples where there has been a conflict of values of sustainability with your partners?
Jen: We have an approach of working together rather than work against each other. Let’s work together to find positive solutions. If our partners were not engaged with the impact that they’re trying to have, then that would be a conflict of values to us, and we would question that partnership seriously.
We take our values of creativity, innovation, sustainability, integrity, transparency and responsibility very seriously. We don’t want to hide away from challenges.
One example is Tarmac, our Big Ideas Programme national partner. We found out three years ago that they procure the majority, if not all, of the energy they used from renewables. That said, they are a significant CO2 emitters in the UK through their manufacturing process, but they don’t shout about the fact that they procure their energy from renewable sources to offset their massive CO2 footprint, and they are always looking for ways to reduce that CO2 footprint. With our partners, we always look for integrity holistically.
AltCap: Why have you not raised investment?
Jen: Sustainability is important for me as an organisation. Our business is not so much at the moment that we make massive amounts of profit to repay the investment. The relationships we build are intimate, and the quality of the relationships is important in making the Big Ideas programme work effectively.
When you've got very clear environmental and social aims, you have to be very careful about where investment comes from, and particularly a large bit of investment. What are the motivations behind the investment, and how can you ensure you can pay it back.
The external investment would not be sustainable for us at the moment, and we would lose legitimacy and integrity by not having a sustainable model. Being on that hamster wheel looking for the next round, and all the reporting that would come with that is a time black hole.
AltCap: How have you grown from working with this young generation?
Jen: Young people are constantly absorbing, learning new things, and asking questions—and this definitely rubs off on you. I'm constantly learning more and challenging myself and our team. We also start to imagine the art of the possible rather than the impossible. I've also become much more comfortable in not knowing things. When I first became CEO, I thought I needed to know everything. But I've learned that it's not about what you know it's about who you know and how you engage with them.
AltCap: How can The Altruistic Capitalist audience help you?
Jen: First, if you are a corporate engaging with a social enterprise or social entrepreneur, try to unpack and think about the value they can bring. For example, if an organisation needs volunteers from the corporate, they don't typically charge for them. But there are bottom-line benefits to a corporate in terms of mentoring, upskilling, employee retention and engagement, and demonstrating social value and there are costs to the organisation managing the volunteers. Corporates and social enterprises need to work together and create a shared language to understand the value of purpose and profit and their relationship.
Solutions for the Planet is looking to grow in the UK and internationally. So please reach out to me at firstname.lastname@example.org if you are a company that wants to engage with schools in sustainability.