COVID-19 has rapidly spread around the world impacting economies, healthcare systems and daily life. The challenges that it poses are real and consequential. To help policymakers and donors better understand the impact on Asia’s social sector, CAPS (virtually) sat down with our partners across the region to understand the challenges they are grappling with, the strategies they are employing to contain the fallout and their take on the future of the social sector.
A recent survey by the Korea Social Economy Federation found that almost 85% of organizations have seen a 20-80% decline in sales as a result of the outbreak. To get a better understanding of the on-the-ground situation in Korea, CAPS spoke with Youngjoo Kim, Global Program Advisor, and Jihye Ahn, Global Program Director, at Underdogs on 9 April 2020. Founded in 2015, Underdogs is the first and leading startup builder in Korea for social innovation businesses. The organization seeks to nurture sustainable social enterprises enabling them to create impact at scale.
CAPS: Youngjoo and Jihye, thank you for taking the time to speak with us. What is the situation on the ground in Korea? How have people been coping during the outbreak?
Underdogs: This has been a challenging time; schools have been closed for over three months and people are still adjusting to working from home.
The impact is being felt most heavily by the country’s underprivileged and elderly communities. Inequality and the digital divide have been brought to the forefront. We’re seeing that families who are not equipped with WIFI at home are struggling to access online school and work from home. The elderly have been unable to benefit from government initiatives, such as a recently launched mobile app which allows tracking of pharmacy supplies, because they don’t have a smart phone or are not digitally literate.
CAPS: How is Underdogs coping at this time? How have you been impacted by the outbreak?
Underdogs: Currently, we have better cash flow compared to other social innovation startups. This is because we received new contracts in early January before the outbreak. Despite this, our programs and workshops which are traditionally conducted in person have been canceled or delayed. We’ve started conducting some courses online, but this has proven challenging from an execution standpoint.
CAPS: Given that you work with early-stage social enterprises, what has their response been? What challenges are they coming up against?
Underdogs: At this time, the priority of social enterprises and social ventures is to survive. Access to funding has been a major challenge and has only exacerbated organizations’ concerns. We are also seeing some conglomerates and corporate social responsibility initiatives reallocating funding to Covid-19 related response efforts.
The government, for its part, provides monetary support to these organizations. However, such funding is linked with training programs. And as training programs have been postponed, it has also delayed the distribution of funds. This has made it difficult, particularly for very-early-stage social enterprises, to maintain regular operations.
In parallel, we are seeing rising need in regions that are particularly hard hit. We are seeing funding being channeled to these areas through nonprofits and local governments but not through social enterprises.
CAPS: What about the corporate sector? How have they been supporting the social sector and citizens?
Underdogs: There are some examples of large companies stepping up to help. For example, SK Group has donated US$5 million to vulnerable groups in addition to providing lunch boxes for school children.
Many corporations are opting to donate to nonprofit organizations working on the ground via the Community Chest. Established in 1998 by legislation, Community Chest is a Korean nonprofit organization that plays a critical role in helping underprivileged citizens who need community support. It has grown to be Korea’s largest community-impact charity.
CAPS: How are social enterprises coming together in these trying times?
Underdogs: Online crowdfunding initiatives are gaining traction. BPlus, for example, is helping struggling social enterprises and social ventures by providing them with small donations sourced from individuals.
Social enterprises are also working to support each other, and we are seeing a growth in the number of organizational networks. The Korean Social Economy Crisis Response Collective Action is one such network of organizations that is coordinating their response to the outbreak. These organizations have also committed to purchasing products and services from fellow network members that are struggling. The Social Economy Solidarity Network is another network of companies that has committed to retaining all employees through the duration of this health crisis.
CAPS: How do you think the outbreak will impact Korean society?
Underdogs: A positive outcome that we might see is Korean companies being more open to flexible work arrangements, such as remote work and working from home. In addition, this might also be an opportunity for the education system to examine how it can be more flexible and resilient and prepare for future pandemics or crises.