©Startnext (Fotograf: Kristoffer Schwetje)

Promoting Social Entrepreneurship: Interview with SEND Chairman Markus Sauerhammer

Markus Sauerhammer sits on the board of the network Social Entrepreneurship Netzwerk Deutschland e.V. (SEND) and spends his days working to improve conditions for social entrepreneurs in Germany. We spoke with him about his commitment, SEND’s concrete objectives and also about future prospects. According to Sauerhammer, policies play a particularly decisive role.

Hi Markus, please briefly introduce yourself and tell us about what you do at SEND!

I originally completed training to become a farmer and then landed in the startup world by way of detour. What I’ve primarily worked on in recent years has been building bridges between established players and #neuland-GestalterInnen (new territory creators).

While working for the crowdfunding platform Startnext, I particularly noticed that ideas that were of significant social benefit had a really difficult time developing. Regardless of whether it had to do with suitable financing instruments, targeted support offers or further development of legal conditions. Wanting to change that was what led to founding Social Entrepreneurship Netzwerk Deutschland (SEND), which I’m the chairman of.

What main goals is the network pursuing?

You might say it’s about transferring our values as a social market economy to the present day. We and particularly our members are working to ensure that society as a whole benefits from progress and that the focus of our actions is to solve the challenges faced by society.

The key objectives of SEND are to network the social entrepreneurship sector, to continue to work towards further professionalization and to make the sector’s players more visible. We’re also working with politicians and ministries on further development of framework conditions.

Germany has been too passive about the topic of social entrepreneurship

To what extent are you calling on politicians to reach your goals? What do you think needs to change in Germany and internationally?

That is one of the biggest areas in need of improvement. While politics in many other countries have made a lot of things happen in the field of social entrepreneurship and social innovation, Germany has been very passive when it comes to this key issue for the future. This is illustrated, for example, by the study “The best Country to be a Social Entrepreneur”, in which Germany came in 12th among the 45 economically strongest countries. In terms of “government policy supports social entrepreneurs,” Germany was in 34th place. Other studies have also highlighted the passivity of our policies so far towards this key issue of the future.

But if you look at the three coalition agreements from last year (federal government, Bavaria, Hessen), you can see a change in thinking. Improved support for social entrepreneurship was incorporated into all three agreements:

“Social entrepreneurship plays a role of increasing importance in solving current societal and social challenges. We want to encourage and support social entrepreneurship more than has been the case.”

Coalition agreement of the German Federal Government

When it comes to concrete implementation, however, there’s still a lot of room for improvement (editor’s note: see SEND statement regarding the government reply to the “Short Question” from Bündnis 90/Die Grünen). While other countries have already developed national strategies, their own financing programs or legal forms specifically for the target group, we’re still a long way from achieving that.

That’s why we’re all the more pleased to see more emphasis being placed on the subject as part of the startup initiative by BMWi. In Bavaria as well, the coalition has stipulated improved support for the sector. It’s important for politicians to take action! Society is becoming more and more divided, and in many areas, more is being done to deal with the consequences of societal challenges as opposed to dealing with their root causes. That approach might keep us afloat for a few more years, but it isn’t a long-term solution.

Results highlight the high level of innovation in the sector

The network initiated the first German Social Entrepreneurship Monitor (Deutsche Social Entrepreneurship Monitor – DSEM) last year. How do you think it turned out and what is your forecast for the next few years?

The results speak for themselves – both in terms of potential and obstacles.

Our results highlight the high level of innovation in the sector, which was quite clearly emphasized recently in a study by KfW Research. The main focus is on local solutions, but many players already have a global scaling strategy. The players are working to achieve the 17 sustainable development goals (SDGs), which means they are increasingly establishing themselves as a key creative force for implementing the 2030 Agenda.

Just under half of the founders are female

What I find interesting is that participatory organization models are of great importance. Many players in the sector are pioneers in the field of New Work and are creating the working world of the future based on a culture of participation and involvement.

Something I’m particularly pleased to see in the startup scene, which is quite often dominated by men, is that the number of female founders is just below 50 percent.

Social startups are at a disadvantage when it comes to financing

When we get to talking about obstacles, I could give you a whole list. If you just focus on access to financing instruments that come directly from the government or that work with the government hand in hand, a comparison between the results from the German Startup Monitor (Deutsche Startup Monitor – DSM) and the results from the DSEM clearly shows that social startups are unable to make use of many of these instruments:

• Government support: 35.2% vs. 9.1%

• Business angels: 21.1% vs. 3.4%

• Venture capital/Impact investing: 15.3% vs. 3.0%

• Bank loans: 12.2% vs. 2.7%

The greater challenge in terms of financing is also confirmed by the results in the study already mentioned by KfW Research. So it’s not surprising that the DSEM participants only gave politics a school grade of 4.6 (roughly equivalent to a C-/D).

In terms of forecasts for the next few years, it’s already become evident now that the sector is not only growing rapidly, but that it’s also quickly becoming more professional. That isn’t a German phenomenon, but rather a global trend. An important factor for further development of the sector is improving the policy framework! That also means that politicians need to take decisive action!

Social startups as “agile speedboats”

What is the network’s and your vision for the future for social entrepreneurship?

With digitalization, we’ve entered the era of permanent change. This new era brings with it major potential — but also challenges. The changes not only affect the classic digital solutions, but also spill over into many other areas. This is where innovative competence will become one of the most important key qualifications.

In the future, we’ll be seeing a lot more cooperation between social entrepreneurs and players from the realms of politics, social service, business and civil society. Social startups can be developed and tested as “agile speedboat” solutions. The best solutions can then work together with established players to scale the impact, which in turn enhances their societal potential. Moreover, working together will strengthen established players’ innovative competence.

What’s important is that none of it will happen on its own. Future policies have a lot on common with my agricultural roots. The same applies to both: We reap what we sow.

So with that in mind: Let’s finally work with the necessary emphasis to create a future that’s fit for our grandkids!

Thanks so much for the interview!