Petro Darmoris On How Ukrainian Social Enterprises Are Creating Prosperity
Petro Darmoris is the founder and CEO at Social Economy Ukraine, a member of the board of Social Economy Europe, and a visiting lecturer at the Ukrainian Catholic University.
He received his business education at the Kyiv Mohyla Business School and the Lviv Business School of the Ukrainian Catholic University. He is a graduate of the Catholic University of Leuven (Leuven, Belgium) and the Ukrainian Catholic University (Lviv, Ukraine).
For more than 9 years he has been helping social start-ups to launch their ventures and working with civil society organisations to design their business models and become financially sustainable. Now Petro is working on research projects, developing a social business network in Ukraine and implementing other initiatives for the development of the social economy ecosystem in Ukraine.
Petro discusses growth of the European social economy and how this sector is transforming the lives of Ukrainians living in the midst of a conflict.
Highlights from the interview (listen to the podcast for full details)
[Indio Myles] - To start off, could you please share a bit about your background and what led to your work in purpose led enterprise?
[Petro Darmoris] - I never thought I would be involved in entrepreneurship. I remember from my childhood being involved in various social initiatives. Whether at school or in parish communities, we worked a lot with kids in orphanages, disadvantaged youth, elderly people and other marginalised groups. This continued during my university studies. Somehow caring for the vulnerable and marginalised became a part of my life, but later during my studies at the Catholic University of Leuven in Belgium, I focused more on social and business ethics. I learned more about the concept of Corporate Social Responsibility, ethical banking, ethical reasoning in business, values and moral principles in business decision making, and especially about the social economy. All these concepts were interesting, because it presented the possibility of looking at social issues from a slightly different perspective, how business can have an impact on solving social and environmental issues. That's probably why I found the social business model attractive and effective, because you have clarity of purpose and the financial sustainability that makes this activity self-sustaining. This probably explains why I have stayed in social entrepreneurship and the social economy for more than eight years of my professional career.
As Director of the Social Economy Ukraine, can you share a bit more about this organisation's core purpose and the social enterprise landscape more generally in the Ukraine?
On the one hand, we may say that social economy or social entrepreneurship are new concepts for Ukraine. On the other hand, the social economy in Ukraine has been developing for more than a century. More than a century ago, there were around 15,000 cooperatives in forestry, agriculture, oil, solidarity, and banks. All these organisations worked for the social purpose of preserving and developing culture, education, integration etc As of 1918, these 15,000 cooperatives were organised over 122 years. Unfortunately, all of these were ruthlessly destroyed by the Soviet regime, so the cooperative movement was destroyed completely. Later, after Ukraine got its independence in 1991, entrepreneurial ideas sprouted again in the form of numerous organisations from voluntary movements and charitable foundations, even to what we call today's social enterprises. What are we seeing now is a growing interest in the social entrepreneurship business model on the part of non-profit organisations who are looking for ongoing funding to carry out purpose driven activities. Social entrepreneurship has become interesting to businesses, and, in the current circumstances, the businesses, despite their size, are super pro social.
We also see the social entrepreneurship business model replacing purely charitable and humanitarian activities. This is quite logical, because social entrepreneurship is an economically sustainable solution.
When you are providing purely humanitarian initiatives or support, you can help every single time. But with the social entrepreneurship business model, you can help once for a long time or forever. In terms of the general landscape, we see a plan for development, but it's a pity we have a lack of data. We didn't know much about the approximate number of social enterprises, how many jobs they create and lives they change. This led us to our core purpose of the Social Economy Ukraine. One of our main purposes is for our activities to be creating a data centre. One of the crucial directions of our hybrid activities is to make ongoing research projects, starting from mapping to understand the number of social enterprises, how many jobs they create and what fields they are working in to learn more about their turnover, the social impact they create and so on. We are starting from these mapping research projects, but working towards yearly social entrepreneurship monitoring research to understand and be able to analyse how all this develops in Ukraine. That is one area of our activities.
The second one is networking and creating community. We see there is a trend for launching new business communities on a regional and national scale. But, there wasn’t one especially devoted to social enterprises. We at Social Economy Ukraine initiated the project, which is called Simply Social Business Club, aimed to provide an open national business community where each social entrepreneur can get tailored support, whether its consultation, help, or connections.
The third area of our activities is around advocacy and policy development. In the Ukraine, there is no special legal environment or conditions for social entrepreneurship. Our aim is to initiate and conduct different information campaigns to raise awareness about the concept and promote successful cases working in different fields. Together with the data we receive, we will use this for making an advocacy campaign and to cooperate with the local government or public authorities to push the development of legal frameworks for social entrepreneurship development.
Finally, there is a series of initiatives we are supporting aimed at empowering social entrepreneurship business support organisations. We are providing them knowledge, skills, and consultancy. Let's say there might be an organisation who wants to launch an acceleration incubation program. We may provide support at different stages. It's about providing different services and resources for a social economy supporting organisation.
With the Ukraine's current circumstances in the war, where do you see the biggest, most immediate opportunities for the social economy to play a role in the country's recovery and repair?
If you're talking about the role of social economy in times of war and the post war recovery or reconstruction, I would probably start in 2013. The Ukraine has been in a state of war since 2014, when Russia occupied Crimea and part of the territory in the Donetsk and Lugansk region. Consequently, almost one and a half million citizens moved to the territory controlled by the Ukrainian authorities to seek protection and often just to survive. At the beginning of that in 2014, we had one and a half million internally displaced people. In addition, the new vulnerable groups are increasing. More than 400,000 veterans and their families have been suffering from unemployment and coming back to a peaceful life. They often feel social isolation, and these issues started to be addressed by the social entrepreneurship approach. Veterans and their families founded more than 300 new businesses. The internally displaced people launched dozens of companies in their new places of living, and hundreds of them were employed by existing social enterprises. This observation gives us evidence the social economy plays a crucial role in the social and economic development of local communities and easing suffering from the war for people. Of course, the full-scale invasion caused many more issues. In this context, I would also make some points about the impact of war on Ukrainian social enterprises, because it's necessary to emphasise most social enterprises in the Ukraine are micro and small businesses. The oral data says that during the first weeks of war, about 75% of Ukrainian social small and medium sized companies fully stopped their operations.
In terms of social enterprises, so being mostly mission-driven, most of them also temporarily stopped their business activities and instead started to provide their products like food, drinks, clothes, linen, or services like psychological or legal support pro bono. Otherwise, they just became volunteers. Consequently, the biggest challenge for Ukrainian social enterprises is to reconstruct their business models and restart business operations. At the same time, we also have cases that have not only survived, but even grown by using the potential of available human capital due to displaced persons becoming their employees. Lots of micro enterprises, working especially on the community level, filled the gaps in local markets. Some of them even were able to sell to EU markets.
Taking all this into account, I'm convinced that social entrepreneurship has the momentum now, especially in times of war with its social and economic dimension. Social economy has the unique potential to foster community resilience and empower local initiatives in times of crisis.
This is important especially for those communities who are under occupation and need restoration. At the same time, we can talk about communities that host a big number of internally displaced persons who haven’t integrated as well. Social economy could be an effective solution. Social entrepreneurship encourages collaboration between government, the private sector and civil society. By bringing together stakeholders from various sectors, we can work collectively towards a not just inclusive and equitable recovery, but a further reconstruction of Ukraine.
Social enterprises not only address social issues, but also have the potential to create jobs and stimulate economic growth. The need for economic development is crucial, because we see the communities live or flourish where businesses are working. Even social enterprises in most cases that are micro or small businesses have the potential and capacity to contribute to this economic development on the local level; local communities in general contribute to development of the national economy.
It’s also necessary to mention that social economy becomes a lifeline during times of war, because it provides not just aid, but A means for people to enable and actively participate in their own recovery, to restore a sense of purpose and pride.
I would also mention here we have some discussions in the public sphere that social economy serves as a force for peace building, bridging divides and fostering understanding between communities. This is especially when communities host displaced persons, promoting a vision of a united and harmonious society. In general, I see the social economy becomes the catalyst for transformation and empowerment. It transforms the state even in times of war, so we should not wait until the war ends. By promoting social economy and the social entrepreneurship business model, we can ensure the country's development, even in the conditions of the dark war.
As an upcoming speaker at the Social Enterprise World Forum in Amsterdam this year, what are you most looking forward to?
I'm looking forward to joining the event. I’m looking forward of course to connecting with a diverse community of like-minded individuals who share my passion for social entrepreneurship and driving positive change in the world. I believe the forum will be a meeting port of innovative ideas, inspiring stories, and cutting edge practices from across the globe. I'm also excited to engage in different meaningful discussions, thought provoking conversations with fellow speakers and of course experts in the field. I'm eager to hear about the latest trends and emerging innovations in the social enterprise space, but what I'm most looking forward to is shining a spotlight on the Ukrainian social entrepreneurship landscape. I already mentioned that despite the challenging times of war, Ukraine's social entrepreneurs have demonstrated remarkable resilience. They've demonstrated creativity and a commitment to driving positive change in their community. I consider my participation in some short speech as part of my mission to bringing Ukraine to the forefront of the global social economy map. When I'm talking about the map, it's not about placing a mark on our geographic landscape. It's about creating a powerful narrative of hope, transformation and collaboration. I want the world to see the bravery of the Ukrainian social entrepreneurs who despite facing terrible challenges (even at times with a fear of death) are actively shaping a future and thinking of social impact, sustainability, and inclusivity. I expect this forum will be an opportunity to engage with potential partners, investors, and supporters who recognise the potential of social entrepreneurship and would be ready to invest in a partnership with Ukrainian social economy stakeholders.
What advice would you give to an emerging entrepreneur or change maker looking to grow their social impact business?
What’s most important is to stay true to your mission and the social impact you aim to achieve. It's important to align your actions, strategies, and decisions with your social mission to ensure everything you do contributes to your goal and making a difference.
What's most important is to be true to your mission despite different disappointments. Others may see you as a freak because they don’t know what you're doing or what social entrepreneurship is. But your mission matters much more than the opinions of the others.
The second piece of advice is consider the strengths and importance of having a network. My advice to change makers and social entrepreneurs would be to surround yourself with a supportive network of mentors, advisors, collaborators and like minded individuals who also share your passion for social change. Consider investing in measuring and communicating your impact. The market needs evidence of your effectiveness, so we need to implement a robust impact measurement system to track and analyse the outcomes of our initiatives. Doing this will not only increase our credibility, but will also attract potential partners, funders, and customers who are drawn to measurable positive change. We need to remember growing social impact businesses requires dedication, resilience, and continuous learning, so my last advice would be to stay open to feedback and be willing to adapt your strategies based on lessons learned along the way. By staying focused on your mission, building a supportive network, and effectively communicating your impact, we can all make a meaningful difference and contribute to building a more sustainable world.
What inspiring projects or initiatives have you come across recently that are creating a positive social change?
I would probably answer more generally to this question. The most inspiration I'm getting is from Ukrainian social entrepreneurs. There are often small or even micro businesses like bakeries, cafeterias, restaurants, small sewing factories, and local farms that remain true to their customers and take care of their beneficiaries. Consequently, they care about the economic development of the region they are working in or the state in general. I'm always inspired by businesses launched by veterans or the companies run by people with disabilities or other marginalised groups. I try to learn a lot from their bravery.
In terms of bigger initiatives in the field of social economy, I'm inspired by the Social Economy Action Plan. This is the initiative of the European Commission to promote social economy across the European Union. By implementing Social Economy Plan principles in Ukraine, it shows this action plan works not just within the EU, but beyond. This initiative also aligns with our strategy, and quite often we refer to the actions mentioned in the action plan and in trying to implement them in Ukraine. In terms of providing different opportunities for social entrepreneurship or doing our best in terms of their development, we are also inspired by the initiative which has been implemented in different countries for the last couple of years called Buy Social. We are also in the coming years considering implementing different initiatives within this framework, to facilitate Ukrainian social entrepreneurs in entering national or European markets and to promote their products and services.
To finish off, what books or resources would you recommend to our audience?
I’m personally inspired by Professor Muhammad Yunus, the founder of Grameen Bank; he's one of the role models for successful social entrepreneurs in our times. I would surely recommend his books like Banker to the Poor, where he showcases his pioneering work in microfinance. It details how he founded Grameen Bank and revolutionised the concept of providing small loans to empower impoverished communities.
Another book worth mentioning is The World of Three Zeros, where Dr. Yunus presents a vision of the world with zero poverty, zero unemployment, and zero net carbon emissions. He outlined some practical strategies for achieving these ambitious goals. I’m always inspired by learning and studying different cases. Quite often I’m visiting the resource the Stanford Social Innovation Review. This resource offers a wealth of articles, case studies, resources on social innovation, impact investing, and other best practices in the social service sector. I like the team behind The Pioneers Post, which is a media platform delivering multimedia news features and articles from social entrepreneurs and impact investors. Of course, I assume our listeners are listening to the podcast from Impact Boom. If people are on this resource, you are on the right track.
