@JamesGarland is a Director at @DGB. He has a long-standing involvement in #fundraising in the #notforprofit area and #branddevelopment.

He's also a #smallbusiness #owner and #investor.

Dalton Garland Blanchard a boutique agency that works strictly with #forpurpose organizations and groups, large and small, including #startups that have plans to really transform themselves in the communities that they serve.

DGB undertakes #transformationalprojects. Larger scale, more complex growth projects, that help to build #organisationalcapacity. DGB help with #fundraising for those projects.

In our discussion we talk about;

leaving #university and entering the world of #advertising #marketing #mediasales #agencies #campaigns #promotions
Iiving in #london and having a #careerdefining moment from working with a charity involved #childsafety, part of a #UKgovernment program called "Personal, Social, Health Education"
#mum asking "What are you doing? It sounds really interesting. It's very different. It's not what I thought you would do. Is it what you really want to do?"
finding a whole lot more #workmeaning in working with organizations and engaging my #passion and my skills in things that are #changingtheworld, or at least #changinglives of people, rather than #sellingwhitegoods or something else
the #business of #notforprofit
#socialenterprise
#thirdsector #privatesector #publicsector
connecting with the passion of the #why
working at @worldvision @savethechildren
his sense that everyone is starting to realize that our #socialfabric and the #health of other people who are less fortunate actually impacts everybody, that we are in #onebigworld
the estimated (@deloitte) $100B size of the "third sector"
the real #impact of the #thirdsector (not really about #finance or #economics) is on people, the #environment, on animals
why the #thirdsector should really be the #firstsector
how #innovations are really big drivers of some of the #coolest not-for-profit movements that are coming out
regeneration of environment as a real hotbed for innovation, people talking about #plastics in the #cleanocean #cleanerworld
the need for #socialenterprises to make a profit so it can support either its supply chain, or employees
the importance of #valuesalignment in #socialenterprise and who starts it, who runs it, who works in it, and who carries it forward #succession
what happens when social enterprises become so successful - they become brands in their own right, they become really well-known, they become sought-after entities or businesses. The conundrum for #founders when this occurs
the key day to day challenges in the #thirddsector;
- finding employees - really good, highly skilled people who can build relationships
- matching the private sector
- funding
the pivotal role of the #thirdsector - doing what #government can't - taking risks that government and #privatesector can't
why sometimes #failing as a natural outcome of trying to alleviate social issues because you can't roll out a #lowrisk private-style business plan to deal with major societal issues
#foundations @cathyfreeman has done a huge amount of work for #indigenous #kids and #communities
#scaling for #impact
#sophisticatedinvestors
#sophisticated #philanthropists
#goodcorporates quietly funding #multimilliondollar transformational projects, some not heavily publicised at all and done because that organisation believes in something that it's a line with their #mission
#worldchange and a #fairersociety is going to have to come at the cost of hard profits at some point - and the #hope that because people that have had success or intergenerational wealth are more attuned to social need than ever before these #sophisticatedphilanthropists will make the difference
why #gettinginvolved in #communityactivities is highly rewarding for self, and never more important than now because of the #mentalhealth benefits it can bring #selfless #senseofself

@kerrcapital

A full transcript is below.

Michael Kerr: Hi. It's Michael Kerr here, presenting Small Business Banter.

A healthy micro and small business sector means a successful economy and a more vibrant society. Small Business Banter is about helping regional business owners better prepare for current challenges, but also for the next stage of business success.

I'm Michael Kerr, founder of Kerr Capital, advisors to business owners.

Each week, I interview a fellow small business owner or an expert, and they share their stories, their lived experiences, the wins and the losses, and their best advice to help you, the listener, get the most you can from your own business.

Small Business Banter is brought to you from the studios of 104.7 Gippsland FM and is heard across Australia on the Community Radio Network. Thanks also to Kerr Capital, supporters of the show.

Okay. Welcome to another edition of Small Business Banter radio. Today's guest, James Garland. James, the Director at the DGB group, he'll tell you what DGB group does, but he's also had a long-standing involvement in fundraising in the not-for-profit area, brand development. He's also got some personal interest in small businesses and investments.

What we're going to chat about today is the business of the not-for-profit social enterprise, third sector. We're really looking forward to this chat, welcoming James.

James Garland: Hey, Michael. How are you doing?

Michael: Excellent. Thanks for calling in from a car, somewhere in Regional Victoria.

James: No problem. I spent a fair bit of time here, so it's often a car call.

Michael: Yeah. The sound is coming through really nicely. It's great to have you in. Look, I gave a really tight description. Do you want to expand a little bit more on your professional background, and also today, where you are with DGB group?

James: Yeah, of course. I came out of university and went into the world of advertising, marketing, media sales, and working in agencies around State[?] campaigns, promotions, that side of the commercial world. I was over in London, working in an agency, doing live events, merchandising, marketing, and one of my clients was a charity involved in children's safety or child safety. I thought it might be a good thing while I'm away from home and tripping the light, fantastic across Europe, to maybe explore some different things in my career.

I took a job that was offered as part of a big roll out by the UK government around what they call "Personal, Social, Health Education" for kids about being safe, and I just fell in love with it. I was young at the time. I was in my mid-20s, and I think a lot of people get into the not-for-profit or for-purpose sector a bit later in life, but it was really early for me. Out of what I thought would be a career in Commerce, I fell into the not-for-profit world really early, and I've been there ever since.

Michael: It's a bit of a calling, was it?

James: Well, I think I said to my mum, I remember she said, "What are you doing? It sounds really interesting. It's very different. It's not what I thought you would do. Is it what you really want to do?" I said, "Well, I'm finding a whole lot more meaning in working with organizations and engaging my passion and my skills in things that are changing the world, or at least changing the lives of people, rather than selling white goods or something else that, quite frankly, a well-loved[?] fridge." I really connected with the passion of the "Why?" while I was doing the work, and came back to Australia, took a contract at World Vision, Save the Children, worked at Cancer Research, a whole bunch of different not-for-profits on the inside, and loved them all. I went outside to the consulting side, and it's even better. You get to work with a dozen not-for-profits at any one time to, again, try and hopefully make the world a better place.

Michael: Yeah. You really acted on something that came to you in your mid-20s which was something that you couldn't turn away. Working today in DGB across with not-for-profits and for-purpose businesses, what exactly does the DGB group do?

James: Yeah. DGB is really, for guys who came out of advertising, naming it after the 3 principal directors is not exactly super creative, is it? Dalton Garland Blanchard, we're a really boutique agency. We strictly work with for-purpose organizations, so large and small, summer startups, some of the most exciting stuff in a sector's coming out of not-for-profit startup still. We work with those groups, specifically, that have plans to really transform themselves in the communities that they serve. We talk a lot about
transformational projects, not so much your traditional tin rattling or, "Can you give us a gift this time at Christmas so that we can keep the lights on?" We work more so on a really larger scale, more complex growth projects, and our role is to help that organization build capacity, help them get ready, and help them carry out the fundraising for those projects.

Michael: Okay, and bringing that experience you had in marketing and brand development to this sector, which I think, broadly, is called the "third sector" incorporating not-for-profit social enterprise, for-purpose. How big is the third sector, if that's the right term, at the moment?

James: It's big. It's really big, and it's getting bigger off the back of what we've seen in the last few years. Everyone's starting to realize that our social fabric and the health of other people who are less fortunate, perhaps, than others, actually impacts everybody. We're in one, big world, and I don't think anyone could start. There's been a time, perhaps more prevalent than now, that everyone's really realizing that. We don't talk about the third sector much, but you're right. It is the sort of term, the "third sector", "private sector", "public sector", and then this "not-for-profit voluntary sector", but the contribution, economically.

I think Deloitte did a study which was talking over $100 billion in Australia alone is the economic contribution of that sector, but I think the difference with that sector is that the impact is not really about finance or economics. It's actually about impact on people and the environment, on the world, on animals, on all sorts of things.

It's interesting that we are now turning to needing the world to be a better place, in terms of climate, health, pandemics, and poverty, yet we call this sector the "third sector". Maybe it's the third thing that we've really cared about, but I don't know, maybe it should be the first sector [crosstalk] because if we don't have a planet to live on, private and public sectors doesn't mean much, does it?

Michael: It certainly doesn't. It probably is an old term, but I was looking for something to collectively describe what you do, but it sounds like it's at a pretty exciting stage with the energy around startups. Would a lot of those startups call themselves social enterprises? If yes, can you describe what a social enterprise is and how it operates?

James: Yeah, for sure. Definitely, social enterprises, it's more than a buzz. Perhaps I'll come back to that because some of these startups are just traditional not-for-profits that someone's got a great idea, or they innovate. Innovations are really big drivers of some of the coolest not-for-profit movements that are coming out.

Regeneration of environment is big. In fact, environment's a real hotbed for innovation, people talking about plastics in the ocean and developing technologies that can create cleaner worlds, when obviously, some of that sits in biotech and agritech, and those sorts of industries. A lot of people do also go, "Hey, we've got a great idea. Instead of commercializing it, we're going to make a not-for-profit. We're going to allow everyone to invest in this and own it globally. Environments are great hotbeds for that at the moment.

The social enterprise is kind of this next step in not being, a [inaudible] not-for-profit, because really, you want a social enterprise to make a profit. It's there to actually make a profit so it can support either its supply chain of fair trade coffee or the young people that it's giving a job to. It's different because it needs to be profitable, and it should be profitable. It's definitely getting a lot bigger, social enterprise. I think, fundamentally, the public wants all companies to have an element of social impact unconscious[?], and social enterprise is probably the peak of that, I guess, where all prophets, all outcomes, and all impacts go back to that social cause.

Michael: Yes, it's a very clear purpose for that organization or that business if you like.

James: Yeah.

Michael: Yeah. I've certainly had some involvement in advising social enterprises and it's kind of what you said, it has to be a viable or sustainable business model because otherwise, all that energy, all that hope, it can all disappear if you don't have a fundamentally sound financial base. The social enterprise is kind of a blending of business and other objectives, and measures of success.

James: Correct, yeah. I think you've got to have a values alignment around who starts it, runs it, works in it, and carries it forward. I think sometimes, social enterprises can be so successful, they become brands in their own right, they become really well-known, they become sought-after entities or businesses. Your values are going to hold true to, say, you could almost turn it into a retail chain, you could commercialize it. It's difficult because really, the function is there for what it is, a social enterprise. The people that are in it want them to be committed for the long term for it to remain that social enterprise piece.

Michael: I think it could create a conundrum for the founders of these things because it is so successful, it does have value for other organizations. That's some of the experiences I've had with these founders, and they're unsure about how to take it forward.

James: Totally.

Michael: With the DGB group and the work you do, what you've acknowledged, it's a very significant sector. Did I have the same set of issues that for-profit businesses have? At the end of the day, are they struggling under finding employees and other day-to-day challenges that business faces?

James: Yeah, massively. I'd suggest even more so, in particular, in the area of growth of business. If you're looking to recruit people under an award for community services or disability, generally, there's hardships in recruiting those people also, but certainly on the side of the work that we do around big transformational projects, project management, we're putting a different type of business case together for any one of these organizations, and they need really good, highly skilled people internally, who can build relationships much like some of your work around capital and advisory. You're dealing with sophisticated people that want to invest in social change. You need some pretty savvy people. We see a massive shortage of really good, savvy, articulate, strong relationship builders in the sector. The good ones get snapped up very quickly, and organizations that want to connect with philanthropists, major corporates, big businesses with government, they need really good people to be able to build those relationships, and you got to hold those relationships long term. It's really hard to get good people in the sector who probably do have to take a bit of a pay cut, because most [crosstalk] not-for-profits are pretty tight, [crosstalk] so it's tough.

Michael: It reinforces the need, and however transformational the cause is and the energy, it's got to be underpinned by revenue, capital, and profits to be able to survive. [crosstalk]

James: A hundred percent.

Michael: On today's episode of Small Business Banter, we're talking with James Garland, who's a Director at DGB group and a very experienced operator in the not-for-profit social enterprise sector.

Sounds like there's some heavy lifting being done by the sector. Is that what for-profit businesses aren't seeing, what don't want to follow some of these imperatives, and that's the opening for not-for-profit social enterprises to really take on these transformational projects?

James: Yeah. That's an awesome question because it is absolutely rooted in one of the greatest things that the third sector or the full purpose organizations can do, and they can do what government can't. They can take risks that government can't. Private companies owned fundamentally by their shareholders, they can't necessarily always take the risks that are needed to generate social change. The third sector, not the largest, in terms of economic impact, is one of those places where you can play and you can fail, and many do. You're trying to alleviate social issues like child trafficking, poverty, and stuff like that. You can't roll out a low-risk private-style business plan to deal with something like that. You're going to need to adapt. You're going to need to find ways to achieve those goals. [crosstalk] It absolutely has this great role.

Michael: Yeah. Do you need the founder to be totally absorbed, connected, and driven by that particular cause to really see the business, the social [crosstalk] enterprise?

James: Yes. That's an interesting angle, too, because a lot of organizations come from our founders' passion. Over a period of time, what that organization will need will be much more than that founder can give because they're one person. Like in any business, you'll need a multidisciplinary approach to how you're going to tackle the root cause, so they're being great people that have started their own foundations, and people be aware of them are famous athletes, started foundations dedicated to specific issues. Cathy Freeman has done a huge amount of work for indigenous kids and communities, and is super passionate about that. Lots of these organizations start with a small number of founders, but as they gather steam, like any commercial business, they need a really good, strong, well-rounded team to be able to scale for impact.

Michael: Yeah, it parallels exactly. You know what happens in startups.

James: True.

Michael: You need somebody or a team of people to see the opportunity and make it happen. It's got some shortcomings, and then it's a cycle, like a management team or a more broadly experienced team comes in. One of the things that I was exposed to in my work in social enterprise was, there's only so much money to go around from benefactors, foundations, and from government. The imperative was find your own revenue streams, which I think the UK has been pretty innovative in building and fostering the social enterprise sector. It seems like what you do with your client is also taking them to the next level, in terms of raising the money they need to deliver the transformational change.

James: Yeah. We talked a lot about a lot of not-for-profits, and we've all been to the Black Tie ball, the luncheon, or have something arrive in the mail box saying, "Hey, we're a new charity, too. Can you support us?" There's a lot of low hanging fruit that a lot of organizations engage in, in order to try and keep those lights on, and it's all really valued. It's already really valuable investment. We probably look at more sophisticated approaches similar to any business, a startup, or organization looking to raise capital. We work with a lot of sophisticated investors, people that are real philanthropists themselves, and look at how they invest their money in not-for-profits. We work with the government, obviously, who have got to mandate across a lot of these issues to either be supportive, or help drive, and of course, big corporates, the big retailers, and others.

Michael: That is some absolutely fantastic work.

James: As to the banks, probably a lot of the time, we hang it on the banks, big retail, and other groups like that, thinking that they're just in it, making money, but we've seen some of our clients in the last 2 or 3 years, multi-million dollar contributions to not-for-profits from these big corporates, not just pocket change, but absolutely transformational support for different projects. Some of them aren't heavily publicized at all. It's just that organization believing in something that it's a line with their mission, and they invest accordingly. We work on those larger scale projects that really do require multiples of millions, but the impact will be really significant. That takes time, like all good things, you've got to do planning, you need strong budgets, you need to ask yourself all the questions that someone else would ask. It's certainly not as simple as shaking the team in the street, so to speak.

Michael: Yeah. It's next level, I suppose, but I think the future for the social enterprise for-purpose sector is pretty bright because there's a lot of problems and challenges, and they're possibly more exposed than ever. It's that energy for people to take something on, is incredible. It's really wonderful to see somebody connect.

At the smaller end, I think there are a lot of really, incredibly valuable work being done by small micro social enterprises where someone's attached to a cause, and they've created themselves a job, while also supporting the cause. Yeah, there seems to be a host of problems, the sector outlook pretty strong and bright.

James: Yeah. I think that we're going to see slightly new models, too. There's a social enterprise group/organization forming, which I'm a part of, in a voluntary capacity. Traditionally we've seen this move to this, not necessarily be equal[?], but more social enterprise, where people start a cafe and they source all of their products ethically, they employ people with disadvantage, and so every step of their supply chain, they're engaged in social impact. That's great as a standalone business. I think the next evolution of social enterprise will be broadening that, so that social enterprise isn't just hospitality driven, cleaning, or some of those things where there's a logical fit. It will be really great when we have real social enterprise across financial sectors, across potentially, resources, and other services, so that it can be seen as an actual business model for all sectors. It does tend to be a bit pigeon-holed at the moment, but we don't have this, as far as I know, any social enterprise real estate agency chains or car dealerships. There's space for this model to play everywhere, so I think there's still a huge amount of growth in [inaudible].

Michael: What's the cap on that, James? Is it just being brave to take on some of those much bigger businesses in bigger industries, or is that capital?

James: Yeah, it's a good question. It could be all of the above there. I mean, we have a pure shareholder financial return model traditionally for [crosstalk] any business, directorship, or ownership.

Michael: Three monthly reporting and bottom line, bottom line?

James: That's right. More of the single bottom line than the triple bottom line, and then versus social impact in a fair society. Now, there's some really great intent out there, but we've all got to want to change the world and have that fairer society. That's going to have to come at the cost of hard profits at some point, but again, there's still a lot of hope, because people that have had success or intergenerational wealth are more attuned to social need than ever before, and we see that. We call these people, they're sophisticated philanthropists, they are looking at opportunities for this change to be made, and they're not necessarily wanting anything in return. Some underwriting some will invest in a social enterprise, some will just gift philanthropically, but there are some absolutely wonderful people out there who are really putting their money out as gifting seed funding contributions to real game-changing projects.

I think that's where the magic might happen, Michael, where you get those really savvy people saying, "Listen, I'm fine, financially. I don't want for anything. That's a great idea. I'm just going to back it because." There is a lot of that out there, but again, in order to present those cases and in order to excite those people and align their passion with an area of social cause that floats their boat, it takes time. You got to really tip[?] into that, what we call a "case for support", which is fundamentally a business case for the for-purpose.

Michael: Yeah. There's got to be more effort, doesn't it? Anybody that's got a profile and is well-off, I'm sure they get approaches all the time and [crosstalk] for anybody you see, there'd be individuals and companies around, but they are going to have their own processes to use a boring term, but to select who they're going to support and why? [crosstalk] You got any tips for the next generation of business owners, maybe they're in school now, or just out of school, in terms of encouraging them into the sector?

James: As I said, I sort of fell into it early on, but there's a lot you learn from a sector, too, at an early age. In this day and age where we're rightly so looking at greater diversity on our boards and in governance, we want youth representation because everyone understands that young people have a different view point on the future, young people like you and I, Michael, and others even younger than us.

Michael: Younger at heart.

James: Yeah. It's exactly right.

Michael: Yeah.

James: Getting involved in community activities is highly rewarding for self. We often talk about how you can get involved, what you can do, but it's almost the giving to others is being shown that, especially modern days, and I'll bore you with a bit of MRI, health sciences on philanthropy, but it triggers the brain and lights the brain up when you give, you're involved, you give selflessly, and you're engaged in things above and beyond your own self. I'd encourage people to get engaged with this sector, with the altruistic, if we can call it the giving sector, not just for what you might learn and how you might connect with, on boards or in projects, and obviously, just to do really good stuff in the community, but do it for yourself.

The days of mental health, being such a high agenda issue, it's incredible, the goodwill and the feeling that you get. People who are pretty much full-time philanthropists now will say, "The work that I do now is just so much more rewarding than anything I ever did commercially, because it gives me a sense of self."

Michael: Yeah. That's excellent advice. That's a great, unfortunately, way to leave our time today, James, but I think that message is, "Get involved in something," and it's almost wide into you that there's lots of ways you're going to benefit and contribute.

James Garland from DGB Group, thank you very much for your time today.

James: It's a pleasure, Michael. Thanks for having me.

Michael: That is all for today's episode of Small Business Banter. I continue to be inspired, bringing you small business experts and other small business owners, and hearing their stories.

Do you want to listen to any past episode? Jump onto your podcast platform of choice and search Small Business Banter. There, you will find a diverse and fascinating collection of small business owners and experts openly discussing and sharing their experiences.

For any of the links, resources, or information we've talked about on the show today, or to contact me, please head over to smallbusinessbanter.com, or you can find us on Facebook and Instagram.

It would be great to have you tune in the same time next week for another episode of Small Business Banter.

[END]

Thanks for listening. Visit the Owner To Owner Podcast website to subscribe, listen back, or check out any resources or information mentioned on the show.

Search @ownertoownerpodcast on your favourite podcast player to subscribe and listen to the episodes.

Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.

michael.kerr@kerrcapital.com.au

www.ownertoownerpodcast.com.au

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