How much profits should social enterprises make?

By Leong Sze Hian

I refer to the articles “Social enterprises, cooperatives “help to make for a better Singapore“” (Channel NewsAsia, Mar 6) and “NTUC – Social Enterprise or Profit-driven Business?” (TR Emeritus, Mar 7).

The former states that “Social enterprises and in particular cooperatives help to make for a better Singapore”.

The subject exchange in Parliament aroused my curiousity and so I decided to do some research on social enterprises.

I started with NTUC Foodfare as it was the subject which sparked off the debate in Parliament.

The link on its web site to its annual report has two words – “Coming soon”.

I next looked at some NTUC social enterprises.

Profits of NTUC’s 12 social enterprises?

The profits of NTUC Fairprice and NTUC First Campus were $117.9 and $4.7 million for FY2011, respectively.

As NTUC has 12 social enterprises, how much profits in total in a year, are made by all of them?

Is this total sum considered as too high or too low, for social enterprises?

Can any experts on social enterprises share some input on this matter?

If these social enterprises made less profits, would the society at large benefit more – be better off?

Comfort Delgro was NTUC Comfort?

Comfort Delgro, the largest transport operator in Singapore, started as NTUC Comfort.

How did a labour social enterprise become one of the largest listed companies with record profits of $248.9 million and an all-time high revenue of $3.55 billion, for the year ended Dec 31, 2012?

If Comfort Delgro had remained as a social enterprise, would the society at large benefit more – be better off?

The more or less of social enterprises?

Just imagine how much a few hundred million dollars of profits every year, from these current and past social  enterprises may do to make the lives of the less well-off in society better?

After all, social enterprise has been described as “Many entrepreneurs, whilst running a profit focused enterprise that they own, will make charitable gestures through the enterprise, expecting to make a loss in the process. However, social enterprises are differentiated through transparent evidence that their social aims are primary, and that profits are secondary”.

Do the labour social enterprises in other countries operate like ours?

Singapore Labour Foundation

Some of the profits from these social enterprises are transferred to the Singapore Labour Foundation (SLF).

According to the SLF’s 2012 annual report, its total assets grew to $1.78 billion with a net surplus of $152 million for the year. It had $1.4 billion of total funds and reserves in the previous year (FY2011).

Government surpluses and reserves?

Some of the above questions on social enterprises may by extension be applicable to Governments too. How much profits (Budget surpluses) should a Government make – vide the relentless rise in the prices of basic goods and services like public transport, healthcare, utilities, public housing, etc, and how much reserves should be accumulated?

Singapore has arguably been accumulating its reserves at a greater rate and quantum relative to its population size, than any other  country in the world, in the modern history of mankind.

How desirable is this and what are the implications for Singaporeans?