New Zealand Red Cross on running as a social enterprise

1 December 2015

New Zealand Red Cross is celebrating a century of care in Aotearoa.  During the last 100 years the organisation has worked through unprecedented social, political and economic upheaval and has seen a century of growth, development and expansion.

Part of that development has included becoming a formidable player in first aid training and second hand retail, establishing vital partnerships with forward thinking companies and exploring new models of operating that don’t leave the charity vulnerable to others’ ability to give.

Garth Dawson, General Manager Social Enterprise, says that adopting a social enterprise model for parts of the Red Cross frees up sustainable resources to better help the people that need it most.

 “Growing social enterprise income creates financial sustainability so that we aren’t relying on donations. It means that if we’re running a special appeal or there’s a disaster, we need to raise money so that 100 per cent of the donations go directly to the cause.”

Red Cross’ retail business is a key part of a balanced social enterprise portfolio and is an important source of regular income. Garth says that as well as being sustainable and keeping clothing out of landfill by giving it a second life, there is a significant social impact.

“We’re keeping textiles in the value chain for longer and are providing good quality, low cost clothing for people that need it. As well as that we are providing opportunities for people to enter the workforce when they face challenges to do that. We also provide an engaging and welcoming environment for volunteers to work in our retail stores alongside Red Cross staff.”

The social enterprise model comes with its challenges and none more so than the competition in the retail industry. Garth says it’s easy to assume Red Cross’ only competition is similar second hand clothing stores but it faces competition from the broader retail sector as well.

“We’ve got to be very clear on what we want to achieve commercially and balance that with those really important outcomes we’re trying to achieve in the social impact space.”

He says that differentiating Red Cross from its competitors is critical to its success, but not having as much control over stock (Red Cross Shops can only sell what’s donated), or the economies of scale of the competition, puts Red Cross in a position where it needs to be creative to stand out.

“We’ve got to improve the experience of shopping at the Red Cross, engage people with our cause and promote the value of recycling and upcycling and extending the product lifecycle. They’re important stories, and we’re trying to tell them in an engaging and compelling way.”

Social enterprise, therefore, demands innovation and as Red Cross celebrates 100 years in New Zealand Garth says he wants to see the organisation here for at least 100 more. With support from partners and social enterprise incubators and thought leaders Garth is looking to lead the charge.

“We’re looking to grow social enterprise at Red Cross and to develop a model that’s closely embedded in community outcomes. Rather than just income transfer from running the business on one side of our organisation to investing in vulnerable communities on the other, we want to focus on creating direct, sustainable and repeatable social impact through our community-based social enterprise activities.”

This is an important direction for Red Cross and will help the organisation stay relevant, Garth says, and it’ll be achieved through a collaborative approach to social enterprise investment, support and empowerment.