• „The importance of the team is highly underestimated!”

    This is an interview with SIA jury member Katharina Turnauer, who’s been financing countless social projects and social business ideas across Europe through her own private non-profit foundation since 2009. Amongst other things, we talked about the essentials when founding a venture in the social sector and why money isn’t always the most crucial point.

     

    Katharina, for more than seven years you’ve been supporting social ventures with your foundation. What motivated you to initiate your own foundation and where does KTP stand today?

    “Getting involved has always been a big desire for me and also my family. We’ve always done it very discretely, without many people knowing about it. In 2009 when the financial crisis emerged we realised that doing good “undercover” is not always the best way to go about it as that could lead to misjudgements with regards to companies and their doing. It goes without saying that not every company is socially engaged or ethically reasonable. However, there are many more companies getting involved than most people think. As social issues have always been part of my expertise, in 2009 I was assigned the task of initiating the foundation and building it up.  In the beginning it wasn’t easy and time needed to pass in order to convince everybody. Today we’re a small but flexible foundation which can tailor to very specific needs and knows a thing or two about how things in the social engagement world in Austria works.”

    In your opinion, what does it come down to when founding a social project?

    “When founding a social project there’s many factors to consider. To my mind, the most important ones are the following: Firstly, a great idea with a decent business plan; secondly, a good and diverse team; and finally, funds and network.”

     “Okay, let’s take it one by one: What’s a good idea in your eyes?

    „A good idea is a clear and practical approach to solving a social issue. It´s important to focus on what is truly needed at the time and in the given context and political situation. It doesn´t make sense to choose a solution that is currently illegal or to solve a minor problem when the world is falling apart. Furthermore, the business plan needs to be specific and feasible. It needs to be understandable and serve as a roadmap and orientation. Of course, some aspects will always need to be adapted to changing realities, but it is pointless to construct a fancy business plan with impressive jargon if it turns out to be useless for implementation.”

    You also mention the importance of the team. What are the key factors here in your opinion?

    „The implementation team is much more important than many people think! The people involved have to work well together, take responsibility for their work, be resilient to stress, have high endurance, and be flexible, ready to learn, and thoughtful. An important question also is, if the team has the knowhow and the resources to realize their plans. In case they lack specific skills they need to answer the question how and by whom these lacks are covered.”

    And what about finances and network, is this the most important aspect?

    „Money always appears to be the most important thing, but it really isn´t! Money is the fuel that drives the car. Whether it´s a jalopy or a Ferrari, though, doesn´t depend on the fuel you use. In other words, an idea or a team isn´t better or worse if it has money. Nevertheless, financial planning or knowing how to get financing is important. It´s also necessary to consider what type of financing I want for my project. Is it a social business, a donation-based project, will it be financed by public or private money or is it a hybrid of various models? In my opinion, this question is too often neglected or not given enough consideration. Every funding source has its own priorities and requirements. I see a good network as very helpful for implementing one´s plans. No one has all the necessary resources from the beginning. This makes it especially important to have access to a wide network that can help and offer a birds-eye view when challenges and questions come up.”

    Many of the initiatives founded and supported by KTP have been successful, because they have linked a social goal with a sustainable financial model for their activities. What tips would you offer young social entrepreneurs to help them achieve financial sustainability?

    „That is an important and difficult question. An important issue is – as I mentioned before – the project’s funding model . That should be thought-out from very early on. There are various ways, from pure donation-based models to so called social business with a return expectation. And obviously there are also numerous hybrid models. Here, it is crucial to differentiate from whom I seek funding – e.g. whether it from public or privat funds as they both come with very different expectations. Whereas the public sector want and must stick to specific processes and standards, the privat sector is much more individual and asks for more details, what exactly happens with the funds and how they are spent. Financial sustainability therefore depends significantly on the relationship  to funders and professional handling of expenses.”

    In your experience, how do people deal with financing in practice?

    „I often have the feeling that it is very tempting for people to think that you can ultimately become a multi-millionaire with a social business. Essentially ‘I can become a social Bill Gates, even he started out small…!’ I think this approach is very risky since you have basically guaranteed disappointment.  The focus should always be on achieving the social goal. This also makes it easier to find people to finance the projects. It is also important to clearly differentiate between the public and private sector. The public sector provides funds according to their grant criteria. The private sector has more of a business approach. Since the private sector generally provides money that it has earned, financiers want to know what exactly they are achieving by supporting a project. Things aren´t simply over once the money has been transferred. In the private sector, people want to know how exactly the money is being used and how economic this is.”

    There continues to be a lack of charitable foundations in Austria. KTP is one of the few successful examples for active philanthropy. Why is that?

    „There are many successful and very active foundations in Austria. What these have in common is that behind each foundation there is a person driving the foundation with their own blood, sweat, and tears. I am more and more convinced that authenticity is necessary. People today are tired of too many marketing slogans and shallow promises of happiness that ultimately don´t lead anywhere. Being genuine is powerful and contagious and people notice. Beyond this you need a good team, a lot of humor, and professionalism.”

    Dear Katharina, thank you very much for your time.

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