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Luck Factory for the Unlucky - Thoughts on the German Social Sector

Updated: Aug 30, 2019

On the corner across from the train station stands a beautiful old red-brick building - a typical Hamburg region architecture. The store taking most of the first floor is called “Glückwerk” or “Luck Factory” in English. This is my favorite store in a town called “Glückstadt” about 100km north of Hamburg. For several years, our family comes to the town in summers, visiting my husband’s family who has lived here for generations.

The Luck Factory sells elegant hand-crafted souvenirs and home decors that reflect the essence of northern Germany: fish, boats, lighthouses, and sheep (who lead the most idyllic life wandering the Elba river dikes). It has a beautiful storefront for the merchandise, a flower shop and a small cafe selling hot drinks and light lunches. It’s one of those stores that could be recognized as a “best-kept secret”, even better than any shops in the trendy “viertels” (neighborhoods) of Hamburg. I love the rustic, comfortable and modern atmosphere. The artistry and craftsmanship of the merchandise are among the best I have seen in Europe. I am a little surprised to learn that the Luck Factory is, in fact, a nonprofit social venture helping to provide employment and training opportunities for mentally and physically disabled people. The store is one of twenty or so small commercial establishments in Glückstadt and Itzhoe region that belong to a larger nonprofit organization. The bicycle shop around the corner in the same building is also a subsidiary.

The German taxation structure which is more socialistic than Canada has provisions for the inclusion of the disabled. Nonprofits with a social cause like this one (disabled people together with children and senior support are by the law supported by the government through taxation) receive fundings from the government in addition to self-generated revenue from the market largely through social ventures, not donations.

Although there are criticisms of German social support system limiting the market possibilities of social ventures, the concept of the financing model with a mix primarily made up of government grant and good business practice is something of a norm here. Social services completely relying on charitable donations (hence vulnerable to more variables other than market conditions) are rarely seen. What impressed me the most, however, is the quality of products and services offered by these nonprofits.

I happened to visit another nonprofit society that runs a small museum in the “composer quarter” of Hamburg called the Johannes Brahms Museum. The design of the experience and the quality of storytelling media (video, signage, listening posts) are quite impressive and comparable or even better than those I have seen in Canada.

Quality defines my experience with the social sector in Germany (in many ways I didn’t even realize I am interacting with the social sector) and is definitely not a word we associate with social services in Canada. The scarcity mindset had made the Canadian charitable sector, for lack of a better word, cheap. Thrifty shops, bare industrial spaces, rundown offices, and hand-me-down equipment comes to mind when we think of the charitable sector in Canada. And the scarcity mindset comes from organizations running on “free money” (donations).

The social venture mindset prevalent in Germany is healthier and more sustainable.

Because of self-generated revenue coming from the marketplace, charities also look at being competitive with top quality services and products that are no different from any for-profit organization. This ensures charities with business acumen to innovate and to evolve. I look forward to the day we get out of the “thrifty” mindset and start offering beautiful experiences to clients and employees alike in our charitable sector and finding innovative solutions to social problems.

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