I'm lovin' it (but I'm not sure I should?)

"What's your motivation for doing this?" is a key question I ask new and emerging social enterprises and social entrepreneurs, in start-up programmes for them that I'm invited to support from time to time.

And while everyone always talks about impact in some way, there will always be some who reply that it's because as a social enterprise they can create more impact than a private business can. And for those people, I set a challenge, that (so far) no-one has ever been able to beat:

"Go and read up on McDonald's UK's impact - and then come back and tell me how you're not ashamed when you compare yourself to them as a private, for-profit, business."

In the 20 years of my setting this challenge, no-one has ever come back to me.

That's because McDonalds UK has done a pretty good job of:

• examining how they've designed their supply chain and invested in their suppliers; 
• thought about the behaviours of their customers and staff at a local level in how they can be the best 'corporate neighbour'; 
• as an employer, designed processes and systems which (amongst other things) mean they regularly win awards as one of the best large employers to work for, and also won the contract to train all of the changemaker volunteers at the last London Olympics (to the shock of all volunteering support and training bodies); 
• have a strong stance on animal welfare; 
• model a lot of good and best practice in how they're approaching how they manage their impact on the natural environment; 
• undertake national programmes to encourage childhood literacy; 
• are the biggest non-charitable supporter of community sports; 
• and the list goes on...

But they don't seem to use any of the above as part of their core marketing messages or reasons why we should eat with them (in contrast to the cause-relating-marketing messaging of most organisations in the social economy) - they're simply doing these things because they recognise that there's a strong business case for them to, other than what their customers seem to prioritise in their buying decisions.

But why am I sharing this here, now, if I've been apparently so enthralled by this fast food chain for so long?

Well, they've recently published what I think may be the first impact report that takes a 50-year perspective (organisations usually only publish their impact reports based on the last year, or a specific funded project) -   

https://www.mcdonalds.com/content/dam/sites/uk/nfl/pdf/uploads/mcdonalds-at-50-social-and-economic-impact-report.pdf  

(They've also been quietly producing annual impact reports since 2016 on all aspects of their business model, and the impacts they're creating -

https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/impact-strategy-and-reporting/performance-reports.html)

Which can't help me start to wonder - as well as setting a quite high bar on what impact and good it's possible to create within a trading model that isn't reliant on grant income or support (as many social enterprises are), is McDonalds now shaming the social economy further by how its approaching understanding its impact from such a 'whole life' perspective?

However, perhaps I should share a slight possible bias about my apparent extolling of the Golden Arches in this post - although I think there's better tasting burgers to be had elsewhere, and will always prioritise eating out in locally owned independent cafes and restaurants when I can, we do share the same landmark birthday. 

And as an unpaid carer who's also self-employed, it was in one of their restaurants that I chose to (belatedly) celebrate mine with them, by treating myself to their birthday 'cake'. 

how the law is perversely stopping charities and social enterprises from being able to 'trade they way out' of the crisis (unlike private businesses...)

I blogged recently about why we need to stop using the word 'pivot' - but we should keep encouraging everyone to think about how they might make changes to what they do and how they do it (one thing most people seem to agree on is that whatever world we emerge into from this pandemic, it won't be the one we were in when it started...).

And for private businesses, this is fine - they're designed to be orientated to changing marketplaces, and their legal forms mean that they can diversify (relatively) easily.

But this isn't necessarily the case for charities, and social and community enterprises - many of whom are on the 'second line' behind the NHS in supporting communities and people in need.

Now, just as there have been lobbies on government to widen the eligibility of business support schemes that have been introduced, and to introduce new ones, so there have been attempts to get the State to also develop support packages for social and community businesses to help them get through these crisis months.

But there's something else that this all brings up that no-one seems to be talking about (or maybe doesn't want to, because it's too uncomfortable?) - MANY CHARITIES AND SOCIAL ENTERPRISES ARE NOT ALLOWED BY LAW TO CHANGE HOW THEY TRADE. 

Let me explain: 

- private businesses are usually incorporated with governing documents that say they can trade however they want (as long as it's legal).

- charities have to prove to the Charity Commission when they form, that what they are being set up to do (and how they will achieve this) is in keeping with charity law. And there are clear and strict rules about how they can approach undertaking or developing trading activities within these. Even if they think they will be able to make a change within these, then they need to get the agreement of the Charity Commission first. If they fail on either of these points, then what they're doing will be technically illegal - I don't know of any grant making bodies who would be happy to fund a charity that was doing something illegal. The same also goes for insurance policies: if you needed to make a claim and its discovered that you weren't supposed to be doing that activity because of charity law, then the policy becomes void and the charity is left exposed to its Trustees carrying unlimited personal liability...

- But this doesn't just apply to charities - Community Interest Companies (CICs: the much hyped and promoted legal form for social enterprises) has similar restraints as set out and enforced by the CIC Regulator (albeit with much less clear guidance).

* The Charity Commission shows that there are over 150,000 charities in the UK

* Social Enterprise UK says that of the nearly half a million social enterprises in the UK, nearly 1 in 4 are CICs (so roughly another 170,000)

That means that of the organisations who are stepping up the most in this global emergency to support local communities, roughly 320,000 of them are constrained by law from being able to easily adapt to introduce new trading services or to best respond to meeting the changing needs of people.

And that's why there needs to be more explicit and dedicated support to the sector from the State.

why do we keep insisting on keeping social and 'regular' entrepreneurs apart, when both have the same sh!t to deal with..?

In my experience of supporting various start-up programmes throughout the UK over the last 20 years, and having walked alongside many for part of their journey, most entrepreneurs don't call themselves that. 

They're simply people trying to make a go of an idea to either help them fix a problem they see in their community or help them get a bit more financial security for themselves (usually both).

So I'm increasingly frustrated when I keep seeing national sector bodies re-enforcing a narrative that social and non-social entrepreneurs need special treatment that somehow doesn't seem to apply to the other:

• the School for Social Entrepreneurs recently posted about the 5 ways that social entrepreneurs best learn - but if you took out the 'social' in the title, you'd instantly recognise them as being exactly the same way that any non-social entrepreneur prefers to learn too...

• and the recent Good Deals conference emphasised the impact that being a social entrepreneur has on their mental health - echoing the findings of the World Economic Forums' own research into the mental health of all entrepreneurs around the world... (but not seeming to make any reference or links to this...)

It therefore seems that if you identify as social or not as an entrepreneur, you're probably going to be sharing the same needs, concerns, and preferences for how you access the support you want - and this isn't anything new either: cross-sector research I did into social enterprises, charities, and private businesses all the way back in 2003 (an era of dial-up internet!) found that regardless of which sector people identified as being part of, they all had the same development needs and shared preferences for how they accessed learning and training.

And to my mind that suggests that we're continuing to miss a trick in amplifying the impact that entrepreneurs could be making on society's problems, and the wider economy - why are we creating this artificial segregation of entrepreneurs based on their founding motivations, when the support they need is the same.  And surely by learning and growing together they might better encourage, inspire, challenge, and ultimately "be" more than the sum of their respective camps..?

In the enterprise programmes I've been fortunate to have been able to manage and lead over the years, I've always sought to encourage such a 'mixing it up' philosophy, and although none were ever evaluated on the grounds of it being mixed-sector entrepreneurs, no-one in them seemed to have any problem in undertaking their journey as an entrepreneur with the others who had differing visions or motivations to their own.

So when we will we start to see (social) enterprise support agents admit that these divisions between sectors aren't really that valid or justifiable, and in doing so, be able to be more inclusive in releasing support into our wider communities and economies for the benefit of all..?

will current trends in csr ultimately see charities and social causes losing out..?

Corporate Social Responsibility ("csr" - or also, 'not being a d!ck') has been around for as long as there have been businesses : it's the equivalent of what companies do against our giving to charity or volunteering for causes important to us personally.

It's also something that can be mired in suspicion, scepticism, acclaim, legislation, policy, and so on - although interestingly, recent research by the Institute of Business Ethics finds that our trust in businesses to 'act ethically' is at all time highs (despite high profile backlashes to do with tax, and workers treatment, by some global firms...).

But in the main, the csr initiatives that companies 'do' (either gifts in kind, sponsorship, corporate volunteering, and such like) are at the direction of the business itself that's doing the giving - in much the same way that we as individuals decide which charities we want to give money to, or which causes to volunteer with.

A few years ago, a company in America called Tom's Shoes refined this csr model into a key plank of its marketing strategy: 'buy one pair of our shoes, and we'll give another pair to someone in need of shoes who can't otherwise afford them' (aka 'Buy 1 Give 1' - B1G1). This model of csr offered a way that we as individuals could more easily assuage any concerns that we have personally that we should somehow be trying to do more to give to those in need, without having to actually give anything, or make any effort beyond our usual consumer purchases (some might say, a very effective way that the private marketplace has made it easier to be philanthropic painlessly).

Subsequently, this model of B1G1 has been adopted by lots of other companies and platforms, even though studies suggest that this model of philanthropy may ultimately actually do more harm than good.

But Tom's shoes has now revisited it's csr model in a way that makes me think that we may be starting to see a sea-change in the face of csr (and possibly to the detriment of the charities and causes we want to try and support) - the company is now offering customers the choice over what the value of that other pair of shoes that are being gifted should be used for: either giving a pair away as before, or contributing to a choice of social causes that the customer can pick.

Now, this model of customers choosing the recipient of a company's philanthropy isn't entirely new: the Co-operative Group, and Tesco stores invite shoppers to vote for which local charity should receive a financial gift from their trading (albeit as part of a wider csr programme).

But it marks the first time I'm aware of, a company changing the way it does csr because of what it's customers are telling it - in effect, it's co-producing it's csr with its customers, being increasingly led by our personal interests, whims, and fashions.

And is that a good thing? Well, it fits with classical marketing strategy of responding to/being led by customers, but if more and more companies start to follow this lead (as they did with the B1G1 model), then we start to risk some causes and issues 'losing out' because they're not as visible or popular as others, but are nonetheless equally important.

Csr plays a distinct role in the wider fabric of community and voluntary support, but supplements what we choose to do as individuals. If we as individuals start to direct the businesses we buy from as to the causes we want them to support, then we're likely to give less to those causes ourselves: after all, that cause or group will still be getting something from our purchase price, right? 

But it's unlikely that any private business's csr will ever equal what we collectively give individually, so this crowdsourced approach to csr may ultimately start to see more of us giving less to charity, and spending more as consumers... 

is 'responsible lending' starting to mean investing in private businesses more, and social enterprises less..?

Since what seems like forever, there has always been the provision of 'alternative finance' - people and communities coming together to support each other financially when either the banks said "no", or because they wanted better terms than mainstream lenders were offering them.

Over time, this has led to the creation of what's now named and recognised as 'alternative finance' - pioneered by early co-ops, community businesses, and charities through things like credit unions, the formation of the Charity Bank, and such like. And then attracting global interest through the rise and populism of 'micro finance'.

But this isn't a post about the history of this sector (although there are some good stories to tell - like what happens if Quakers set up a bank to offer a more ethical alternative in the 17th century, only to have it suffer 'mission drift': we know it as Barclays bank today. And what happens when all the studies and research starts to show that micro finance doesn't deliver on its promises to lift people of of poverty?).

Instead, this is about my wondering if the recent performance of alternative finance providers, as reported by the sector body, Responsible Finance, is showing that social enterprises are increasingly moving away from such ethical alternatives, and that we're seeing private businesses making better use of these lenders designed to step in when mainstream banks and lenders said 'no'. And in doing so, are we also starting to see an evidence base emerging that shows private businesses are better at creating social impact than social enterprises...?

As readers of previous posts like this may recall, I don't claim to use any statistically significant variance analyses - I try and take a simple layman's approach: looking at the data as it's been published, and sticking it into some simple charts.

To do this, I've drawn on 4 years of annual reports published by Responsible Finance, and also one of Social Enterprise UK's 'state of the sector' mapping reports too.

And to try and break the flow of this post, I've copied these charts below, with some summary observations further down:

Now, taking a 'layman's approach' - these charts seem to indicate some trends. Namely:

• social enterprises have been more volatile ('bust and boom') in their performance in comparison with private businesses ('slow and steady')
• the private sector offers better value for money in creating and sustaining jobs (but it's been argued elsewhere that this is because social enterprises tend to employ people with higher needs than a typical company would be willing to invest)
• responsible/alternative lenders don't seem very keen to lend to start-ups if they're a social enterprise, but are far more willing to do so if it's a private business

Now I mentioned having also looked at another data source - Social Enterprise UK's mapping of the sector. In 2017 this reported that nearly 1 in 4 of all social enterprises were actively seeking to take on a loan of some type (with 83% who applied to do so, receiving an investment = approximately 14,000 enterprises), and those that did were able to secure a median amount of £60,000. But against the comparable year from the responsible lenders, the average amount was £391,185, against 363 borrowers. Which suggests that most social enterprises are NOT going to alternative and social lenders to raise investment, and those that are, are far larger than the typical social enterprise is.

All of which seems to paint a picture of responsible/alternative finance being a good thing if you're a small private business looking to start up. And for these lenders themselves, private businesses would also seem to offer a more stable client base to build on in the future too. These private businesses would also be good to show to policy makers to boot, with their offering better apparent value in helping to create and protect jobs in the wider economy.

But there's lots of other data in these annual publications too, which suggest that there's other things going on around responsible/alternative finance too, not just this dichotomy in performance between social enterprise and private businesses who take loans: 

• the total number of borrowers has fallen by over 50% in the last 4 years 
• the average loan to a private business is up by nearly 90%; whilst to social enterprise borrowers it's only up by 5% over the same period

All of which makes me wonder if alternative finance has gotten too good at being 'alternative' - in evidencing to the wider marketplace of mainstream lenders and high street banks, that those enterprises and people who they previously said "no" to, can now be said "yes" to?

But this is a layman's take on annual reports published by industry bodies. As with my previous posts like this, my hope is that rather than start a revolution and change the system completely, is will instead provoke some further reflections and conversations, and help contribute to making sure that the support and services we offer to businesses (be they private or social), can remain most relevant and current in meeting their changing needs, and by association, the people they employ and the communities they serve.

All I've done here is what I don't see happening that often amongst policy makers and sector bodies - looking at trends over time, and starting to cross-reference other data sources to try and better understand the picture.

if you want support for your startup, you'll likely need to ignore your ethics...

I find myself in an unusual conundrum as an enterprise advisor who also has a pretty explicit set of values and ethics in how I approach the way I work:

Over the last few years, government has consistently reduced the amount of resource and support available to people who want to start up different types of businesses as a route to employment, generating jobs, changing the world in new ways, and such like. This has meant that the support that so many entrepreneurs of all types need and value is increasingly scarce.

At the same time, high street banks and financial services bodies seem to be moving into this business support space through creating startup grant funds, developing (free) incubators and workspace, and sponsoring national thematic enterprise support initiatives.

All seems pretty straightforward? And economists would probably point to this as an example of how market forces are creating responses that people and enterprises need, without the need for state intervention.

But here's the rub - a recent survey of the 'ethical-ness' of high street banks seems to suggest that those who are scored as 'most unethical' are the ones doing the most around these startup and social enterprise support initiatives. A case of 'buying your way out of a guilty conscience'? (http://www.thegoodshoppingguide.com/ethical-banks-and-building-societies)

And for the entrepreneurs accessing this support - some won't care where the money's coming from, but I see that people increasingly are interested in how that money has come to be on the basis of choices about where they choose to invest their own savings, suppliers they choose to procure from, and the places they try and recruit their staff from.

Market forces are all well and good, but remember that the market isn't a person - it doesn't have ethics or values like you or I. And that likely means that entrepreneurs' difficult choices will only be added to in the future when they start to weigh up the ethics of accepting the support that they know that their enterprise needs, but comes at a cost of having been raised from investing and trading in practices that they'd otherwise be very uncomfortable with...

another example of how the private sector continues to stay ahead of the curve (and also ahead of charities and social enterprises...)

A lot of work I do is in support of the wider church of co-ops, social enterprises, charities, and public sector mutuals - but from time to time, I do also with privately owned ('traditional') businesses;

And something that continues to strike me is just how often the social/third sector presents itself as a paragon of virtue and practice in comparison with private business, when in my experience, private businesses are actually doing a better job of being transparent, creating impact, and living the values that social ventures espouse, but seem to struggle to actually do...

Case in point - Mcdonalds, Puma, and City-based pension fund managers to name but a few.

And the latest in this list is the Greater Manchester Chamber of Commerce.

The Chamber of Commerce has recently published the findings of its regular evaluation of its Board. which reflects on how capable its members are in discharging their role, and how well its performs. How many charities or other social sector bodies do you know of who are so transparent in how competent their Board are?

'enterprise accelerators' - the blind leading the blind?

I've noticed a growing trend for 'enterprise accelerator' programmes over the last few months, and usually dismissed my curiosity to investigate further as they mostly seem to be based in London (I'm a Northern lad..)

However I recently had the opportunity to attend the opening workshops of one that's being delivered by an "international professional services firm" so thought it'd be a good idea to see what sort of support qualifies being labelled as 'accelerator', and from the private sector (as most of the enterprise support programmes I'm involved in have been publicly funded).

 

Sadly I was very disappointed and even shocked.

The opening workshops of this 'flagship scheme' explored basic marketing principles (understand what your customers are interested in, and be able to present the benefits of your service not just its features), and some initial basic concepts of good meeting skills.

Now, I'll agree that such basics are important for any start-up enterprise, but to form the basis for an 'accelerator' that's targeting aspiring high growth businesses in high value industries?

What made me more concerned was that of the start-up entrepreneurs present, none really had any aspirations to scale the enterprises they were thinking of setting up beyond their immediate community, but the cuts by government to enterprise support meant that they couldn't find any other type of free training or advice.

 

But what really stunned me were the 'expert presenters' of the workshops: a communications officer on temporary contract who introduced their subject using the phrase "I don't really know about these things myself, but I'm led to believe...", and another who closed with "...and these are all a few ideas based on my experience of internal meetings with colleagues."

So in actuality, the content of this flagship enterprise accelerator programme was more 'start-up101' than high-growth, and those leading the sessions had no real understanding or first-hand experience of either start-ups or high-growth ventures.

And yet there were glossy brochures and banner stands which make it appear professional and trustworthy.

 

 

If this is the future of enterprise support, I fear for the future of our economy and business communities.

 

why are private businesses supporting and promoting models of enterprise that are completely opposite to their own?

there’s a lot of talk and examples recently of how big business is starting to explore ways in which it can support and encourage the next generation of social enterprise and social entrepreneurs – either through direct sponsorship, or, as in the case of Coca Cola, using under-utilised capacity within its supply and delivery chains to reach those people that others just can’t reach...

and that’s great – right? Governments and NGOs don’t have the resources alone to address the needs of our world, so it’s great to see resources and cash being mobilised out of private hands into the public good.

but... I'm struck by a historical parallel and a philosophical question in all of this. What’s in it for them, and why are they promoting models of business (social enterprise) that are at odds with their own ownership and profit distribution structures?

Go back a little while in history and we see the British Empire setting up co-ops in all the countries it ‘managed’, telling everyone that these were the way to go in terms of economic prosperity for all, sustained wealth, etc, etc – but why then did the British Empire not do more in Britain to promote and support co-ops for its own citizens?

Tellingly, although credited with succeeding in shifting cultural attitudes to the co-op enterprise model, these ‘Empire co-ops’ have largely struggled to realise their potential. And its only now, several generations on, that bodies like the Co-operative College are having the opportunity to be able to revisit these nations and seek to fan the flame of what remains of the co-op legacy...

Without a clearer lead from national and international social enterprise bodies, I'm concerned that we’ll see big private corporate firms start to rush in, create loads of social enterprises that will ultimately collapse (or be stifled in what they could really achieve) – so perhaps the most pressing question is for those private firms like Coca Cola: why are you promoting models of enterprise that are opposite to your own? If you really think that they’re so great, why aren't you changing the way you’re structured as well?

Why charities should look to private business for inspiration...

As much as it pains me to disagree with her, (and at the risk of upsetting my 666th follower on twitter - for she has that dubious honour), I find myself at odds with Deborah Allcock Tyler's view of looking to the private sector for models and ideas in her column of Third Sector Magazine on 12th April 2011 (préci’d = charities are better at what they do than private business is as what it does, so we shouldn’t bother to see what we might learn from them that might benefit us) - surely we should be open to cross sector discussions, especially when some of their management practices put ours to shame (take a closer look at McDonalds), they have happier employees who are less likely to take them to tribunals than us, and have a workforce who are valued better by their employers based on more of ours expecting to leave our sector in 5 years than theirs...


just as there are some 'bad charities', and these are the exception to the norm, there are some 'bad businesses' who are the exception - it’s just a shame that they're mostly in the finance industry...


And surely, we’re both faced with similar challenges: dealing with recession, government expecting us to do more to strengthen society, managing costs, supporting our people – why does there seem to be such an engrained cultural resistance to exploring and addressing these together in the third sector/civil society?

how businesses can actually benefit from the 'Big Society'

or..."Why i agree with the chief exec of the RSA - but not because of his thinking"

Matthew Taylor’s Comment section in the current issue of the RSA Journal calling for businesses to play their role in Big Society through engaging more with their local communities in relationship rather than token gesture is spot on. But I’m not sure I agree with the basis for his argument being solely on moral grounds.

I think that there are better arguments to be made for businesses to develop better relationships with the communities they based themselves on purely economic grounds:

1. Family firms – over the years this model of business has been seen to be amongst the most sustainable and long-lived, and amongst some of the best models of business to weather recession. Why? Because it roots itself in its local community. Local employees, local customers, local suppliers – all of whom understand the interdependent relationships they share with each other.

2. Compliance with legislation – companies are now legally required to show how they consider their local communities in the decisions they take (perhaps the most controversial aspect of Companies Act 2006)

Ask any business leader to sign up to a way of working based on a moral argument, and it’ll be an uphill struggle. Show them how building stronger relationships with their communities makes them comply more easily with legislation and create a stronger economic base, and they’ll bite your hand off...

Half of social enterprises will be lost in the next 5 years – and it’s our fault!

About a year ago, I argued the pressing and urgent need for social enterprises to value their people more or risk losing them.

Sadly the latest national salary and careers survey seems to suggest that these warnings have fallen on deaf ears:

• More people expect to be working in the public sector or private enterprise than in social enterprise in 5 years time...

• There will be fewer career opportunities in social enterprise next year than in the private sector

• We pay our staff at least a grade less than their counterparts in the private and public sectors

• Social enterprises are worse at training and developing their people than charities, private companies and local authorities and public bodies are


All of this means that we’re likely to see a growing exodus of people and talent from the sector – indeed I’ve started to see more practitioners leaving their social enterprise employers to join or set up private practices (like I did myself 6 years ago – but that was out of necessity rather than a deliberate career choice, and a story for another time...).

But what of the next generation of social entrepreneurs I hear you cry? All of these new up and coming starlets being born out of the teaching in schools and colleges, who’ve been learning about the wonders of social enterprise? Well, if people have any sense, then they look at employers carefully before committing themselves – and if you had to choose between an employer who paid you less, invested in you less and offered you fewer development opportunities than a private firm or public body, who would you choose?

What Shakespeare can teach us about social enterprise – better ‘to be’ or simply ‘to do’?

Many charities and local authorities are now running services and activities under the banner of ‘social enterprise’ to contribute to their sustainability (both as services and organisations).

This perhaps helps to explain why there’s such confusion about what social enterprise is: some organisations presenting their structure and form as the basis for their identity, while others present their actions as their basis.

But... if it means that communities are benefiting through these ‘branded’ trading activities by groups not structured as social enterprises, then how far should we feel ‘protective’ over our identity? After all, there’s a compelling and logical argument along the lines of “as long as they job’s getting done and supporting people is at the focus of what we do, what does it matter how the organisation is structured...” however, taken to its conclusion this argument surely takes us down the path of the end justifying the means (something the Prince of Demark wrestled with famously in Hamlet).

Muhammad Yunus has waded into this historical debate with his refreshed definition of a ‘social business’ (broadly speaking - that as long as you’re primarily benefitting people in need then you ‘tick the box’). But there’s surely a risk with such loose definitions that many privately owned businesses will start to add to their ‘green-wash’ with ‘social-wash’, and that charities will further muddy the waters by having an ongoing reliance on grants and subsidies while presenting what they do as ‘social enterprise’.

Social enterprise is surely about being a sustainable business that’s rooted in the open marketplace and which exists to principally benefit those in need; it shouldn’t matter who’s in its employ or on its board – these things are fixed and immutable. Otherwise, as officers change, markets, customers, and society become confused by different peoples’ values changing the focus and purpose of what that organisation does and how it does it.

But confusion aside, that social enterprise has challenged and inspired such a growing change in common business practices amongst private businesses and charities is surely an impressive achievement and something we can take pride in?

Where next for social enterprise in the 'Big Society'?

There’s increasing interest from politicians and investors for social enterprises to enter ‘non-traditional’ market places (apparently there’s a belief that social enterprises don’t usually foray out of construction, catering or childcare into markets like telecoms, IT, financial services, etc etc...), especially into industries where private businesses have failed.

So – leaving aside the argument that if other businesses fail in these markets, where is the logic in us entering them?, this may seem fair enough, but ask any actual trading business about their entering new marketplaces and they’ve very hesitant. This is because this strategy for business growth is proven to be the most risky, and most likely to fail.

Therefore we need an incentive – if the state wants us to take such high risks, then they should recognise the cost to us for delivering their agenda (assuming that we decide it’s actually a good idea to enter new marketplaces). This doesn’t and shouldn’t be through grants, but maybe through tax and investment reliefs, interest free loans, and so on – possibly the need that the big society bank that’s being created could meet?

But if we do diversify and enter these ‘non-traditional’ market places, ultimately it should be because we see that there’s business sense in doing so – otherwise we change into charities or subsidiaries of the state and loose our distinctiveness.

why we shouldn't listen to the experts at the Financial Times...

so the FT thinks, in its wisdom, that social enterprises should conform more to the accepted norms of the private sector in order to be able to elicit more support (money) from the established order (see SE Livewire story here)

Well - maybe I'm missing something here, but isn't it because of the 'established order' and traditional private sector that we've had recessions, are driven by profit margins rather than balancing compassion with costs, and generally see the rise in societal inequality?

I think it should be US that's talking to the FT and its consitiency to show them that its their structures that are flawed and don't make sense - after all, on what basis should people who are already wealthy be able to invest money in companies and then sit back, do nothing, and become even more wealthy while those lower down the food chain struggle to make ends meet on a weekly, or even daily, basis?

Maybe the time for revolution is drawing ever closer... or maybe its just time for me to get down from my soapbox.


and this also links back to a published article I wrote a little while back that questions the need for our sector to rely on financig by external bodies when we've such a good track record of doing it for ourselves - link here