Cutting costs

The treasurer is at the center of your enterprise when it comes to advising on

how to reduce costs and on how to make your money go as far as possible.

The treasurer knows better than anyone else how much money the group

has, how much will probably be received, and how much will have to be

spent paying bills and financing projects. But unless your treasurer is some-

how intimately involved with every operation in your enterprise (an impos-

sible requirement in large organizations), she likely doesn’t know where

costs can be cut while still retaining optimal effectiveness in reaching the

enterprise’s goals. The people who know best what could be cut are the ones

routinely working in a particular operation.

 For example, in an enterprise whose mission is to interest children in the fine

arts, the person responsible for the media-based publicity of its programs may

have a good idea where money could be saved without seriously reducing the

effect of the publicity. Maybe publicity expenditures in a certain newspaper

could be cut, because few parents or teachers who are interested in the fine

arts actually read that paper. Or maybe Internet advertising is now more effec-

tive than TV advertising, and a savings could be found by switching to the

former. These details aren’t the kind that treasurers are normally familiar with.

 Try to schedule regular meetings between your treasurer and various leaders

in your enterprise. Doing so raises the chances of finding great ways of cutting

costs, and also integrates your treasurer better in the organization.

 Try to keep the goal of reducing costs in perspective. Cost-cutting should not

be the end-all and be-all of your organization. A good rule to follow is to reduce

costs where the reduction would save money that could be used to pursue

other organizational goals — but not where the reduction would weaken pur-

suit of one or more of those goals. Budget cutting sometimes becomes a goal in

itself. Your enterprise has important social goals to accomplish, and too little

money available for this purpose will eventually spell failure.Who’s the fairest of them all: Treating

your team members fairly

Fairness is probably a more elusive goal than honesty because what’s consid-

ered fair is often a matter of interpretation. In theory, people act fairly when

they treat others impartially or equitably according to commonly held rules

or standards. A main problem in applying rules or standards of fairness is

that some people may feel that they’ve been applied inconsistently or out of

ignorance of certain critical information. The manager accused of unfairness

may disagree, arguing that she is consistent or is aware of the information.

The best advice we can offer is that you recognize that, as a leader in your

enterprise, you may at times be called unfair. Do your utmost to avoid

this charge, of course, but having made the effort, you may still arrive at

an impasse with an employee or volunteer claiming that unfairness has

occurred. At the same time, catering to any particular person because he’s

crying foul may smack of favoritism. If a belief that favoritism has occurred

gets around, it can undermine the larger organization.

Usually when one employee cries “unfair” about a policy or other employee,

it’s because she wasn’t told about how she would be judged. For example, in

giving a promotion to a recent but hardworking employee, a more tenured

employee may complain or cry foul, thinking that the promotion should go to

whoever had been there the longest. The problem in such a case is that the

staff wasn’t told the criteria for how promotions would be given.Empowering the target of benefits

One of the goals of your enterprise may be

to empower your target of benefits, as in

the example of Principia (see the sidebar,

“Principia’s mutual healthcare,” at the end

of this chapter). Professor Marie Lisa M.

Dacanay is Program Director of Social and

Development Entrepreneurship at the Asian

Institute of Management (AIM) Asian Center

for Entrepreneurship. One of the goals of AIM

is to encourage practitioner-oriented research

that produces practical and easily applicable

results.

Dacanay’s work at AIM concentrates on

empowering the poor and other marginalized

people to benefit from their own social enter-

prises. She works with them to help them start

and successfully run these organizations.

Dacanay points out that the communities where

the enterprises operate often experience posi-

tive social change, stemming from the fact of

created jobs and an increased sense of well-

being among employers and employees.

As always, at their best, social enterprises

become a catalyst for broader changes in

the community. For more information about

the goals and accomplishments of AIM, go to

www.aim.edu.ph.

What does empowering the target of benefits

have to do with teams in social enterprises?

Well, the goal of teams is often just that — to

produce results that empower those targets.

The Principia example shows how this can be

done in the field of healthcare. But empowering

a target doesn’t always need to be reached by

way of a team in a social enterprise. Dacanay’s

work suggests that her enterprises foster

empowerment of their targets through efforts

of the entire entrepreneurial group