Ms Deirdre Mortell:

I thank the committee for the invitation to appear before it. It is exciting to know that the Seanad Public Consultation Committee is taking an interest in the development of social entrepreneurship in Ireland. I will speak about One Foundation's role in the development of social entrepreneurship and, more particularly, why we chose to get involved in it and what we think social entrepreneurship contributes to Ireland. I will discuss One Foundation's establishment in 2004, when nobody in Ireland had heard of the phrase "social entrepreneur", and the role it has played more recently in providing growth capital for the market. I will also discuss the barriers and opportunities we see for social entrepreneurs and how the committee might be able to contribute in this regard.

One Foundation is a private philanthropic foundation established in 2004. We are funded by Mr. Declan Ryan of the Ryanair family and the fields in which we provide grant funding are children and families, youth mental health, the integration of minorities and social entrepreneurship. We fund social entrepreneurship in Ireland and Vietnam. Ours is a limited life foundation, which means we will close at the end of this year. This will inform the remarks I will make on some of the opportunities and barriers for social entrepreneurs. We believe we are part of a philanthropy relay race, have played our part in the past ten years and that the next generation of philanthropists will pick up the baton from us and play their role.

We became involved in catalysing the social entrepreneur movement in Ireland in 2004.

I wish to explain what it was that we saw occurring and what we believed was missing that led us to believe that doing so was important. In 2004, I took a learning trip to the USA to try to find out what I felt I needed to know and I heard the term "social entrepreneur" for the first time. When one considers the term, what it is and why a social entrepreneur is important are obvious. We all accept that entrepreneurs are key to a healthy economy and innovation. Consequently, social entrepreneurs are key to social innovation and a healthy society and social economy. However, if they are so important, why could we not see them in 2004 when we were looking? It is obvious that we had them even if we did not have the term. We are all familiar with people such as Ms Mary Davis, Sr. Stanislaus Kennedy and Fr. Peter McVerry, but we could not see where the next generation of social entrepreneurs were. I wondered where the people of my age, young entrepreneurs, college graduates or even teenagers were. I could not see them emerging as the next generation of leadership following those who got involved in the 1960s and 1970s. I was well networked in the social sector through my background in Oxfam and Barnardos, but I could not see such people around me.

It occurred to me that the entrepreneurs I mentioned started in the 1960s and 1970s when times were different. Many of them had backgrounds in the religious orders. If one is in a religious order, one does not need to worry about having a roof overhead or a hot meal every evening. This factor influenced why the next generation was not coming through. We were at the height of the Celtic tiger in 2004 and 2005 and parents and peers were more concerned about life choices that built people's status in society or ensured economic security. Perhaps there was no room, moral support or encouragement for people who wanted to pursue other avenues, regardless of the financial aspect. There seemed to be a need to consider how to cultivate the next generation of social entrepreneurs by creating space and providing moral support, credit and practical supports.

While in the US, I was given a copy of a book with which Mr. Paul O'Hara will be familiar, How to Change the World: Social Entrepreneurs and the Power of New Ideasby David Bornstein. It is based on the Ashoka story. It was hot off the press at the time. The case studies involved certain people, but I was worried about the next generation. It seemed like a fit for our perceptions of Ireland at that moment.

Mr. Declan Ryan, my co-founder in One Foundation, has an investment background and understands how to back entrepreneurs and expand their businesses and innovations in an Irish as well as a global context, mainly in terms of aviation but also other areas. My background is in the voluntary sector, raising finance for organisations such as Barnardos. It was clear to us that backing individuals with entrepreneurial qualities and innovations could solve some of the social problems that were either entrenched or increasingly emerging in the middle of the Celtic tiger era. Someone needed to act.

The model seemed simple. Social entrepreneurs need the same supports as entrepreneurs. The model did not need to be invented. We have venture capital funds, angel investors, Enterprise Ireland and many other supports for entrepreneurs in business, but there was nothing along those lines for social entrepreneurs or people acting in the social sector. There was no practical support, targeted financing or, in particular, moral support. When children in the generation after mine left college or did their leaving certificates, their parents did not tell them to consider what they could do for society. There was a great deal of pressure to be a doctor, lawyer or banker. People were not being encouraged to take that risk as a career or life choice.

To cut a long story short, we invited Ashoka to come to Ireland and supported it in its early years. We also incubated Social Entrepreneurs Ireland under Mr. Seán Coughlan's leadership. Later, we decided to replicate Social Entrepreneurs Ireland in Vietnam. What have we learned after ten years? Mr. Coughlan, Mr. O'Hara and others have led the social entrepreneurship movement and we have stepped back as a result. We have focused on growth capital for not-for-profit bodies. I wish to discuss our work to date and some of the barriers and opportunities presenting.

In ten years, One Foundation has provided more than 35 organisations in Ireland with growth capital to make a step change in their impact on the fields of youth mental health, children and families, minority integration and social entrepreneurship. We set ourselves eight ambitious goals, one of which was to transform youth mental health services in Ireland. I will explain why we provided certain supports. We call them our investment model. I will outline a case study instead of giving a long theoretical explanation. We have used a model of support that replicates the support provided by venture capital backers in business. We know that high-performing entrepreneurs and not-for-profit organisations have the same needs as for-profit companies, namely, growth capital of a meaningful scale, technical supports that enable them to put that money hard to work - business planning, impact measurement systems, etc. - and networks that can bring other inputs to the table - for example, board members, capital, recruitment and talent.

My example is that of BeLonG To Youth Services, with which some Senators may be familiar. Based in Dublin, it provides youth services to the lesbian, bisexual, gay and transgender, LGBT, community. These services were originally only available in Dublin, but they have been extended throughout Ireland. We "invested" in BeLonG To Youth Services. I use inverted commas because we are a grant maker, in that we do not look for financial returns from the grants we provide, but we always view it as investment because we want to be able to name and measure the social return on our grants. We invested in BeLonG To Youth Services to help it expand its network of youth services for LGBT young people outside of Dublin. When we first became involved in 2006, it was providing Sunday afternoon drop-in programmes on youth work. People were getting the bus from Donegal to Dublin and back again on the same day, they were so desperate to access the service. That the service was necessary was obvious, but there was no money. If 5% to 10% of the population is LGBT, 42,000 people in Ireland between the ages of 14 and 23 years could not get support if they lived outside Dublin. From other evidence, we know that mental health problems are most likely to emerge during adolescence and that this age group has a higher risk of suicide and self-harm.

We invested €1.425 million in BeLonG To Youth Services over six years. It is a big number, but we did not invest it all in one go. We broke it down into three-year investments - they were really grants - that focused on different stages of the organisation's development. We wanted it to expand its youth services from Dublin to nationwide, ensure that the Department of Education and Skills came on board to combat homophobic bullying, change public attitudes, promote solidarity among young people - befriending, basically - and increase the organisation's fund-raising capacity so that it could be strong after we left. In line with our investment model, we first provided €100,000 over a year to strengthen the organisation's core staff and tested its ability to deliver. It did great. We then paid for BeLonG To Youth Services to draft an ambitious business plan in which it could set out in writing and drill through the details of its ambitious goals and how it was going to achieve and measure them - for example, how long they would take, how many more staff would be required and what those staff would be doing. This planning is harder than it seems. We liked the plan when we saw it and contributed €750,000 at the time to hire the staff necessary to expand services nationally and train youth workers in other youth organisations to fund-raise, handle communications and campaigning, etc.

It was all about strengthening the organisation to achieve its big mission. It was an investment in the core strengths of the organisation. Much of the time this is referred to as "overhead" but to us it is growth capital. I want to draw the committee's attention to the fact that organisations are often informed - in the media and other places - that they have too much overhead. In business that is not referred to as overhead, it is what one needs to grow and to build one's mission. Overhead, in terms of the way it is defined, is often a good thing and not a bad thing. We are very happy to support that.

We followed up with a second round of investment of €500,000 to take the growth to the next stage. The organisation is now involved in dialogue with the political parties and the Department of Education and Skills on a campaign to tackle homophobic bullying in schools. Essentially, it has achieved all the objectives in which we invested. The guidelines were produced by the Department of Education and Skills, which is engaged with combating homophobic bullying in schools. BeLonG To has expanded nationally and reaches 2,700 young people each year. The number it probably needs to reach is 3,000, so it is very close to its goal. We are really happy with BeLonG To's success. It is a brilliant organisation. We are of the view that we, together with the State, put in the right money at the right time in order to make that happen.

What we did was invest the risk capital. It is extremely important to consider the role of philanthropy in a social democracy such as Ireland. We can be the risk capital. The State has the Comptroller and Auditor General crawling all over its money. It is very difficult for the State to take risks. This is because risk capital will sometimes fail. It will fail quite often, actually. It is very difficult for the State to take that risk. However, philanthropy can take it and this can take the form of growth capital. When that proves effective, for example, once BeLonG To has grown and we can see that the services it provides actually work, then the State can choose - if it believes in those services - to pick up the baton in the context of funding them. Basically, we have taken the risk.

What have we learned? Ireland can hold its head high with regard to its track record on social innovation. Senators will hear some examples in that regard in a few moments. Many of these have been developed by social entrepreneurs but barriers remain. The first such barrier is the lack of growth capital in Ireland for the next generation. We only worked in very specific areas and we did not work in lots of others. There is a lack of philanthropic growth capital in Ireland, particularly at the scale required. Our average grant was €750,000. That is a great deal of money. Not many philanthropies in Ireland are giving out that kind of money and we are closing down our operations. It is not possible to grow an organisation based on funds committed year by year. That is how the State works at present. There is not enough growth capital and it is drying up.

The second barrier is that the model of supports provided by venture capital for entrepreneurs is just not available to social entrepreneurs in this country. Again, this is not at the scale it needs to be. The funds provided need to be structured properly and they must be available for what is called - but what is not - overhead. I refer in this regard to management, salaries, marketing, IT, etc. Technical supports must be wrapped around these. The committee will hear much more about that from Social Entrepreneurs Ireland and Ashoka Ireland. Entrepreneurs require access to mentoring and to networks.

The third barrier is that State contracts for social services need to be clearer in their commissioning criteria in order to give new entrants a fighting chance of winning them. Funding should, in particular, more often be contingent on the outcomes that are delivered rather than on historic funding relationships. We see that happening right across the commissioning bodies throughout the State with responsibility in the area of social services, including the Departments of Health, Education and Skills and Social Protection, agencies with responsibility for housing, etc. We need to move away from the approach which states that "We have always funded them so they must be good and we know them well" to one where we evaluate - based on outcomes and value for money considerations - who can be the best provider of the services required. We have not yet made that move in Ireland. It is a significant challenge but it is something which we must do.

Ireland's Forum on Philanthropy and Fundraising has been developing a national social innovation fund, which will be launched later this year. The role of this fund will be to provide more growth capital into the market, not just in specific areas but actually for Ireland's best social innovations. The latter could be in any area. This is being developed under the auspices of the Minister for the Environment, Community and Local Government, Deputy Hogan, who appointed the Forum on Philanthropy and Fundraising to consider how to stimulate philanthropy in Ireland and put it to best use. The Seanad could really help by getting behind that initiative as it emerges. We believe it should be launched at some point in the second half of the year. As everyone is aware, however, nothing is launched until it is launched and Ireland is experiencing hard times. We believe the money can and will be found. However, we would welcome anything the Seanad can do to back that initiative. We can have all the networks and technical supports we like but if we do not have the growth capital that goes with them, they will find it difficult to make a difference.

I thank the committee for its time.