The recent liquidation of Nanogirl Labs has been sobering news for the social enterprise sector in Aotearoa. While it is important to acknowledge the disappointment, it is equally important to recognise the positive impact Michelle Dickinson and her team had in inspiring a generation of young people in STEM. Their work reached thousands and made a real difference, and it also highlights vital lessons for social enterprises in New Zealand about building resilience and stronger foundations for the future.
As BVO Audit Director Alex Houghton explains, the Nanogirl experience also highlights important lessons for boards, funders and leaders of social enterprises. With an estimated 2500+ social enterprises operating in New Zealand, the sector deserves special attention.
Balancing heart and discipline
“Social enterprises carry the discipline of a business and the heart of a charity,” says Houghton. “That combination can be powerful, but it also creates tension. When funding shifts or demand outpaces income, the model is put under real strain.”
For Nanogirl Labs, the mission was clear: deliver STEM experiences widely. When government funding reduced, costs did not. Scaling to meet demand without adequate revenue proved unsustainable.
Planning for resilience
The lesson, says Houghton, is not to be less ambitious, but to prepare more rigorously. “Scenario planning, diversification of income and regular independent assurance are essential. Audits in particular are not a cost to be avoided. They are an investment in sustainability. They highlight risks early and provide discipline for boards and management alike.”
Separating profile from discipline
One risk for many social enterprises is reliance on a charismatic founder. Passion and visibility can attract support, but they can also lead to groupthink and over-optimism.
Alex points to the John Kirwan Foundation as a positive example. “Sir John is a powerful advocate and public face. Behind him is a professional management team that ensures financial and operational rigour. That separation of roles allows the organisation to combine profile and purpose with accountability and discipline. It works well.”
The need for collective support
Stronger sector-wide representation is also needed. The Akina Foundation once played an important role in advocating for social enterprises but then changed strategy, and unfortunately, has also recently closed its doors. A representative body could advocate, educate and help boards navigate the unique challenges of hybrid models.
A new generation of opportunity
Despite the risks, Alex is optimistic. “Younger generations are demanding more transparency from organisations and more meaning in their work. They want to play a part in enterprises that deliver both impact and opportunity. That shift opens the door for social enterprises to thrive, if they are built on strong financial and governance foundations.”
Key take outs for social enterprises and boards
- Recognise the hybrid nature of social enterprises and build governance skills that reflect it
- Treat audits and financial reviews as investments in resilience
- Plan for risk with scenario planning, reserves and income diversification
- Balance founder charisma with professional management discipline
- Support the development of a sector-wide representative body
“Social enterprises are vital contributors to impact in New Zealand,” Alex concludes. “With the right balance of passion and discipline, they can thrive.”
