Flush with funds: Why the pandemic might not send not-for-profits to the toilet

23 September 2021

On paper' toilet paper doesn't look like a hot investment prospect.

And until recently' investors felt the same about Australian social enterprises' or businesses run to achieve a social purpose.

But a CQUniversity expert is tipping the success of Who Gives a Crap' an Australian toilet paper business run to generate funds for sanitation not-for-profits' may have shifted the fortunes for the wider social enterprise sector.

CQUniversity's Head of Course for Sustainable Innovation Associate Professor Olav Muurlink says news of Who Gives a Crap's recent $41.5 million capital raise is exciting for the sector' especially as the pandemic has created some tough conditions.

"As a social enterprise' Who Gives a Crap is a hybrid between a profit-making business and a charity' and last year the company gave away $5.85 million for building toilets and other sanitation projects' helping prevent waterborne illness and diseases that kill an estimated 3.4 million people a year'" Prof Muurlink explained.

The huge donation was due to a sevenfold profit increase' in part thanks to pandemic-inspired toilet paper frenzy that gripped the nation. But Prof Muurlink says the pandemic could also be driving new interest in social enterprise' and passion for contributing to its work.

"Though the pandemic has hit some traditional charities hard' and research points to times of economic uncertainty generally being bad for good causes' the COVID crisis has perhaps surprisingly not derailed the sustainability agenda' and individuals' commitment to social causes" he explained.

While Prof Muurlink cites some studies linking a feeling of happiness to generous "prosocial" behaviour' he said the globally grim mood created by the pandemic is driving determination to make a difference.

"Research on affect' or mood' and attitude is illuminating: while bad mood leads to selfish behaviour' selfless behaviour is remarkably effective at improving mood'" he said.

Working in not-for-profit himself' leading Bangladesh-Australian charity Co-operation in Development which builds schools' wells and toilets in southern Bangladesh' Prof Muurlink admitted not for profits were battling with reduced income in the pandemic.

Last year' a Social Traders survey of the Australian social enterprise sector showed more than half of respondents had lost more than 25 per cent of revenue due to COVID-19 impacts – but nearly 10 per cent had seen revenue increase.

Prof Muurlink said a growing pool of social enterprise supporters in the pandemic showed the Australian community was determined to make its dollar go further in supporting a cause.

"Social enterprises give people an opportunity to behave in a pro-social way' while engaging in an act (whether buying a coffee or toilet paper) that is already part of their routine behaviour'" he said.

Prof Muurlink said there's growing evidence that The Who Gives a Crap raise could bode well for Australian investment interest in other social enterprises.

Last week' Australia's first First Nations-owned beer business Sobah Beverages opened its private offer for crowdfunding' and is well on its way to raising $1 million to fund growth.

The Kombumeri country-based (Gold Coast) non-alcoholic beverage social enterprise has already received interest from hundreds of investors since going live on the Birchal crowdfund platform.

Sobah co-founder Clinton Schultz has shared his social entrepreneur insights as part of CQUniversity's iActivate' a short course launched last year to meet demand for upskilling in the social enterprise sector.

In his role' Prof Muurlink is also part of CQUniversity's mission' as Australia's only Ashoka U Changemaker University' to inspire and equip a new generation of changemakers' through social innovation education for students' staff and the community.