Todd Hannula: All in a good cause

For Todd Hannula, success wasn’t enough. A former salesman, dotcom entrepreneur and ‘corporate boob’, as he puts it, Hannula was pursuing a lucrative career in the US when in the summer of 2005 he decided to give it all up.

‘I found it kind of vapid,’ he says. ‘My wife and I had made a decent amount of money, though I realise it’s not polite to say that in this country. We’d done well for ourselves then it was like: “What else? Is that it?” The only answer was to make more money.’

With a history of volunteering for community organisations in the US, Hannula decided it was time to devote his energy to social enterprise. He and his wife moved from Boston to Leeds, and with Chris Hill and Alan Wallace, established figures in the UK voluntary sector, founded the Camberwell Project.

Encouraging greatness

‘We’re on a mission to bring inspiration to entrepreneurs,’ Hannula explains. ‘If we talk to people in [deprived] neighbourhoods we find they don’t have an inspiration. They have celebrities, and they are interested in celebrities, but they don’t relate to them. And there are people from Government organisations who think they know what it takes to start a business – but they have no idea.’

The Camberwell Project’s work has three strands: it develops deserted buildings and spaces into centres for social enterprise and community life; it ‘incubates’ fledgling social enterprises with the aim of growing them into successful businesses; and it works with public bodies to secure and invest funding for social benefit.

From Bill Gates to Anita Roddick, it no longer seems odd that entrepreneurs should turn their attention to social problems. To define social enterprise, though, is to invite debate. Everyone agrees it’s a mixture of entrepreneurial guile and social aims, but the precise formula is open to discussion.

While Hannula is passionate about the need for social enterprise to become more entrepreneurial, fellow co-founder Chris Hill stresses what he sees as a fundamental divide between social enterprises and regular, ‘profit-maximising’ businesses.

‘Profit is incredibly important,’ says Hill. ‘But social enterprise has different drivers. Normal companies set out to maximise profits for their shareholders, which dictates their behaviour. With this form of enterprise, the social aim is what drives us.’

Wherever you place the emphasis, it’s clear that successful social enterprises are adopting not just the techniques but the spirit of business. Julia Ogilvy, the founder of youth volunteering programme ProjectScotland, talks of having generated £13 million for the economy – a figure based on one million hours of volunteering by 16 to 25-year olds.

‘The big idea is that in the end, all young Scots get involved in volunteering,’ says Ogilvy, who quit her position as MD of jewellers Hamilton and Inches 12 months after winning the Scottish Businesswoman of the Year award in 2001. ‘There’s a huge backlog of young people wanting to do this work. We’re going for 3,000 next year but we could place 7,000 young people.’

A turning point

Like Hannula, Ogilvy talks of a revelatory moment when she decided she wanted to use her business skills to make a difference. Inspired by community service organisation AmeriCorps in the US, she approached Scotland’s first minister Jack McConnell, who encouraged her to get started.

The central problem ProjectScotland faced was selling the idea of volunteering to a young audience. Ogilvy hired marketing directors from the private sector to build a brand that would have broad appeal.

‘I approached it as I would any product launch,’ says Ogilvy. ‘We have something we are trying to sell to young people, which is the idea of volunteering so we’ve tried to make it cool and trendy. Some of our latest advertising didn’t quite pass the censors.’

Naturally, professional skills come at a price. ‘Yes, we pay higher salaries than a regular charity,’ Ogilvy admits. ‘But we feel that it’s worth it because we get a very high skill level.’

Brett Wigdortz, who launched Teach First in 2002, understands how necessary it is to keep things professional.

While working as a consultant for McKinsey, he was assigned a research project to see how the quality of secondary education in London could be improved. Having drafted his proposals, Wigdortz decided to quit the corporate world to make them happen.

‘Teaching in challenging schools was seen as a very low-prestige option,’ he explains. ‘I asked myself: “How can we tip it over on its head and make it the most high-prestige option?”’

Career path

Wigdortz decided to put a proposition to university leavers that appealed not only to their better natures, but to the desire of many to pursue a lucrative career. Partnerships with established names such as Accenture, JPMorgan and Deloitte, which provide leadership coaching for the candidates, enable Teach First to sell itself as a path to success in any discipline.

‘What we say to graduates is: “For two years you will make as big an impact as possible [as a teacher]. After that, you can become a leader in whatever field you want,”’ explains Wigdortz.

Six hundred graduates have gone through the Teach First programme, of whom around a third have ended up working for one of the 40 sponsor companies. Even then, they do not leave Teach First behind.

‘Teach First is like the mafia: once you join, you never leave,’ jokes Wigdortz. ‘In the long term, it’s about the movement that we’re creating and that movement is encouraging thousands of future business leaders to make education in challenging areas a priority.’

If social enterprise needs visionary risk-takers, marketing wizards and management consultants, it follows that it also needs investors. The Government may invest directly by forming contracts with social enterprises to provide key services; but for early stage funding, or ‘social venture capital’, one of the UK’s 450 community development trusts may be the only port of call.

Former investment banker Hugh Rolo is investment manager of the Development Trusts Association. He argues that the returns to society as a whole from social venture capital (VC) can be impressive.

‘Our proposition is that the Government will get modest financial returns on the money they give us, but we will work hard on achieving social returns and, in time, offer a VC-style return,’ Rolo explains.

To attract this kind of funding, however, enterprises need to persuade their backers that both financial and social returns are deliverable. This means escaping a culture of dependency on grants, says Rolo.

Hannula agrees. He sees the competition for finance transforming from an ‘ugly contest’ where enterprises are fighting for the funding scraps, to one where tangible returns can be guaranteed.

For Hannula, this kind of thinking comes naturally. He comes from a family of entrepreneurs and has an MBA and years of experience in corporates behind him. But more important than all of this, he says, is the ‘desire’ to make things happen.

It’s in the blood

‘It may seem corny, but you’ve got to have something in your heart that makes you get up and go,’ he says. ‘You’ve got to have a soul that allows you to withstand the absolute lows that come after the absolute highs. If you haven’t got that, don’t become an entrepreneur.’

In this respect, social entrepreneurs such as Hannula, Ogilvy and Wigdortz are just like any other entrepreneur who exchanges a comfortable cruise through the corporate world for the white-water rapids of running their own show.

Hannula adds: ‘At some point you’ve got to start saying, “I’m going to do something amazing here.” Some people do that by starting Google. The guys who started Google didn’t do it to make loads of money, they did it because they thought it was a really cool idea.

‘Our idea was to devote time to growing social enterprise.’

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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