Co-ops will never succeed until they start demanding more money from people who want to join them

The co-operative movement is often referred to as having emerged from Rochdale in 1844 (although it's history goes far further back than that) - a time when the average life expectancy was a mere 21 years; and most people died in the streets wearing nothing but rags.

The co-operative society that was formed then did two very powerful things that have since resonated through history: one has defined the movement globally (documenting a set of core values and principles); and the other has come to limit the interest of people in not only becoming members of co-operatives, but subsequently also not being interested in being actively involved in their governance (the setting of a membership fee of £1).

Whilst those values have gone on to be argued about, expanded, refined, and ultimately codified by the International Co-operative Alliance as the acid test of what makes a co-op a co-op, that membership fee has largely remained resolutely steadfast at £1 in nearly all co-ops.

Today, most people in the movement would argue that it should remain £1 - this is the lowest amount the law will recognise and allow, and allows for inclusivity: after all, no matter what your circumstances, you can scrape £1 together relatively quickly and easily.

But adjust for inflation, and that £1 should actually now be £128.

However, inflation only looks at the nominal buying power of that £1 - it doesn't recognise the extremes of poverty and deprivation people whom that co-operative in Rochdale was created for, and how those might transpose to our society of 2021.

A couple of quick google searches identifies that in 1844, people were most likely to be factory workers or labourers, with an annual earning of around £20.

Compare that to the average UK salary in 2021 which is £29,600 (as at 18th March).

And suddenly we start to some some big differences.

If I were to join a co-op in 1844, it would cost me 5% of what I could hope to earn in a year = roughly 3 weeks earnings (nearly a months wages) .

3 weeks wages today would be equal to £1,700.

Suddenly it becomes apparent just how radical the co-op of Rochdale was, in what it represented that meant people were willing to give up so much of what they would have otherwise spent on their rent, meals, and health (no NHS in those days!).

If you invested nearly £2,000 or a month's wages in something, you'd want to make sure you were getting value for money and a return on what you've otherwise have been spending it on (insert your favourite vice here). You'd want to make sure your voice was heard: you'd engage with any and all opportunities the organisation offered you to be part of its governance and decision making.

In short - you'd be actively involved, because it had hurt you financially to be part of it.

Most co-ops today struggle to not only recruit members, but also to encourage and maintain their involvement and engagement in their co-op's governance and activities.

Could it be because the movement hasn't paid enough heed to its history, and forgotten just how much it asked of people who wanted to be part of it, in order to keep this cost of membership current and relevant?

If co-ops today suddenly made the cost of membership £1,700 (after all, they all echo nearly everything else that the Rochdale co-op mandated and advocated), I suspect we'd seen an initial drop in member numbers. But those that did become members - how active and dynamic would they be in the democracy of their co-ops?  

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.

defining success in enterprise support means not measuring what you think you should

We need a way to check that everything we spend money on, or invest our time in, has worked - otherwise, how do we know if it was the right thing to do? how can we learn from the experience otherwise? and if we don't have some type of indicators of success, how can we be accountable to the people whose money we've spent doing it?

Some readers of my blog will be aware that I have a slightly unusual business model as a freelancer, in that I always try and find, and work though, funded programmes when supporting clients - I have an idea that as well as making my work more transparent and accountable, I'm also helping someone else 'tick their boxes' with regards to helping them spend their budgets where it might be of most benefit.

But within any funded support for enterprises or charities, there's an element of reporting against 'indicators of success': how many jobs were created, how much more turnover does the organisation now generate, what new products or services have been introduced to the marketplace, and such like.

However, I've always had a concern that having such reporting measures, while useful for the reasons I've referred to above, risks the supported organisation starting to focus on doing the wrong things.

Case in point: in recent years, there has been a rise in interest in encouraging more charities and social enterprises to take up the option of 'social investment' (loans and debt) to help them grow and do more good in the world. This has been through programmes offering funded consultancy, workshops and training, and such like. And having been involved in supporting the delivery of several of these, the reporting of any group who accessed support through it has invariably focused on how much of an 'investment' the organisation has now secured.

But the problem with this focused approach to reporting on the success of the support is that its prejudiced and biased - my experiences (and that of many others) through programmes like these, is that many organisations receiving subsequently support find that their business model will never be able to generate the financial returns, nor satisfy the diligence requirements, of investors, however good the support they receive has been.

So they, and their funded supporters, face a quandary: 'fudge' the reporting to suggest that a loan deal is imminent (but never quite materialises), or be honest, and risk the funder asking for their money spent on the support back, with it apparently having failed to achieve what they wanted it to.

And it's a pattern I've seen in other funded business support programmes in other sector over the years as well, with private businesses in initiatives aimed at stimulating job creation and economic growth.

So does this mean that funded enterprise support will never achieve its aims, or that we can never trust what these funders share as the collated impact of their programmes, in many of the reporting of it's activities being 'less than completely transparent'?

I'm inclined to suggest that there's a third option we have, and it's one which I'm encouraged to see some providers of such funded enterprise support starting to take: funders of these programmes starting to openly recognise that the way they measure and consider the success of their intervention should consider a wider range of outcomes, rather than a simple binary measure as has been traditionally used. 

And a leading example of this is the Social Investment Business, whose reflections on 5 years of programmes supporting social enterprise access social investment is identifying this:

"Success should not be solely defined by growth or whether investment is raised. 

Instead, improving resilience should be the primary aim."

So perhaps we can all take encouragement from this and have a little more courage in future when reflecting on the benefits that come from engaging with offers of business support and how we report this, and be open to the good things that happen when we do?

crowdfunding grants for your project - the shape of things to come or a dystopian future?

I find myself talking a lot about crowdfunding these days - partly because I'm starting to deliver more training and learning programmes around strategic finance and managing accounts, but also because it seems to be a space where more grant makers are moving into...

I've always held that the main benefit you can derive from crowdfunding isn't about the money, but rather proving interest and demand, and building a tribe of supporters. I've also always argued that it's a lot of hard work to make a crowdfunding campaign a success (most fail to reach their targets, or come anywhere close to them...)

Recently though I've started to notice grant making bodies starting to increasingly move in the crowdfunding space - offering 'top up' grants to groups and projects who raise either a minimum amount, or who offer to match the amounts raised in this way (step forward Power to Change Community Shares Booster, Santander's changemakers, el al). And in some ways this makes sense: grant making bodies only have so much cash to go round, and want to make sure that their money makes the most impact where they spend it. So to have a project that shows it has high levels of public and community support from people already donating to it, would seem to be a good indication that it will do very well in having a body of people already wishing to support it and see it succeed.

And there are also calls from various national sector bodies that even if charities don't integrate crowdfunding into their income generating strategies, everyone should try it at least once... 

But... crowdfunding can be a fickle game. It takes a lot of time and skill to be successful at it. It's also a form of popularity contest in trying to get a community to support your project over someone else's. And what about those projects and activities which, while we all agree are worthy and needed, are also those which we might struggle to otherwise offer support to if they started crowdfunding?

Crowdfunding can generate all sorts of benefits and unexpected outcomes. It can also be a large waste of time and effort. But is a space that people and funders are increasingly interested in - and if we haven't tried it, how can we have any credibility when we try and subsequently argue that its not for us?

Like Oscar Wilde (or someone like him) famously may have once said - try everything once, apart from Morris dancing; but I'd say just make sure you go into it with your eyes open and don't believe all of the hype...

the Korean perspective... (I may be funnier than I think I am?)

I had the opportunity this summer to spend a week mentoring a cohort of South Korean social entrepreneurs as part of the UK leg of their international MBA. And while pictures have been shared on instagram, twitter, and such like, as to the various adventures and activities that people got up to, I thought it might be useful to reflect on what I think that South Korea can teach us about how we do social enterprise in the UK, having spent a week thinking about it from their perspective;

at the end of the week, all the entrepreneurs shared what we mentors had offered and challenged them over which has caused them to rethink either their business models and assumptions, or how they'll launch and scale their enterprises in the future. This was though all giving short presentations to us as the mentors, as well as to their fellow student entrepreneurs, and university professors. And while all agreed that they greatly valued the time we had been able to offer them as mentors, and shared something different in relation to their own specific enterprises, there seemed to be some common themes around:

• the benefits of mentoring in getting 'back to basics' - its good to have assumptions challenged, and start to simplify things to make them more manageable
• testing enterprise ideas with a wider group of mentors, all of whom have different backgrounds and perspectives, is valuable in identifying new options and opportunities
• having a range of mentors to draw upon (rather than a single mentor as many other enterprise support initiatives offer), allows access to a far wider range and number of contacts and other models and initiatives of direct relevance and benefit
• there's also a cultural difference as to what constitutes a 'social need' in South Korea that the UK would struggle to recognise as being relevant for a social enterprise to have as its mission, but perhaps this echoes some of the confusion we still have here in the UK as to the different ways in which we define and recognise a 'legitimate' social enterprise by the forms it can adopt?
• Many also seemed to espouse a new mantra that we mentors think may be attributable to their session with Nick Temple of Social EnterpriseUK - J.F.D.I.

• (and there were also some nice comments that students directly made about me as part of their presentations:
• "As we all came to realise, Adrian is very humorous"
• "Adrian was a great encouragement to my self-esteem as I realised that this enterprise will be the hardest thing I ever do in my life")

I also reflected on some of the themes that seemed to regularly come up as part of the mentoring sessions I was delivering. It's telling that these seem closely related to issues that are also particularly pertinent and relevant to all (social) enterprises in the UK today?:

1. Mapping and reporting the impact we create offers a range of benefits that we don't usually recognise it for:
1. it helps prioritise service and product development
2. it contributes to marketing activity
3. it helps to identify potential future customers who benefit from what we do, but aren't paying us!
2. Branding is an often undervalued and underused 'tool' in helping us to not only differentiate ourselves from the competition, but also between the services we offer were they are targeted at different customers and beneficiaries, to mitigate possible confusion about us in our marketplaces

so perhaps as a sector, social enterprise has more 'common currency' globally that it might think it has - but how can we encourage and support that? Initiatives such as this that are hosted by Sheffield University are by far the exception, but all involved recognise the immense value it offers to everyone who was a part of it.

(And I'm also indebted and grateful to Darren Chouings for pulling it all together, and also my fellow expert mentors - none of whom I'll share the embarrassing pics I took of you here...

Jamie Veitch

Dave Thornett

Morgan Killick

Nickala Torkington

Andi Stamp)

maybe social investment isn't that different after all..?

I was able to make it along to this year's "Working Capital" conference that was recently staged in Sheffield - a day to immerse myself in reflecting, arguing, sharing, and further exploring the wonderful world of 'social investment'.

Depending on who you speak with, Social Investment is either the next big thing (and has been for a few years...); is a market that's suffered failure in the past and needed interventions from government; or a smoke screen for covering the cuts to grants that sustain many charities and social enterprises...

money might not grow on trees, but these desktop garden
pots from Key Fund mean you can grow most other things 

The day offered a range of perspectives and stories: Cliff Prior of Big Society Capital stating openly what many are starting to whisper in hushed tones - social enterprise should be moving more towards retail and consumer markets because public commissioners are very tough nuts to either crack, or to change their behaviours; and Hazel Blears encouraging those same commissioners to do more to learn from each other to progress the social value act (but in doing seemingly having forgotten previous national initiatives over the last 20 odd years that were designed to do just that...).

But the impressions I'm left with (initially at least - as always, I'm open to others coming back to me to challenge me on these points) are:

• most of the specialist lenders to social enterprise make it difficult for the sector to borrow from them because they usually have repayment terms of only 5 years maximum. But in the private sector its not uncommon to 'refinance' a loan - it can often be hard to get a loan because you've no history of repaying debts; but once you start to, you can flip your loan to another lender on better terms... So what's to stop social enterprises getting what seem initially expensive loans in comparison with the high street banks who see them as being too risky, showing they can manage repayments, and then transfer the loan to their high street bank on better terms?

• the things that are important to those seeking investment (quick decision, affordable terms, flexibility), are the same as for any other type of organisation in any sector seeking a loan

• as a general movement, social investment seems to be a little bit too 'introspective' for my liking: NESTA undertake regular national surveys of social and alternative finance, which no-one referenced today. Without understanding how different 'flavours' of social finance compare to other finance types in how widely they're being used, how can we hope to make a best informed decision about where we should be investing our time in pursuing investment?

But but in all, a good day to reflect, see some friendly and familiar faces, and hopefully the start of most other enterprises' journeys into investment that will ultimately help them create bigger and better impacts on, and for, their respective communities.

does pursuing social investment reveal a weaking social enterprise sector?

As some of you will know, I'm an approved provider for various enterprise support programmes, one of which is Big Potential - funded development support for social enterprises to better explore, and develop their businesses cases to pursue, social investment.

There are various aspects of this programme that continue to impress me, some of which I've written about before, but one that I keep coming back to is its transparency and openness about its data. It's committed to undertaking an annual evaluation of both its performance, and the profiling of enterprises whom it engages with. (It's also started to publish performance data about how well us approved providers are doing as well...)

Last year, I blogged about the first of these published reports, seeking to better understand what it's data might tell us if we compared it to 'typical' social enterprises (spoiler alert: Big Potential seems to be attracting social enterprises who are younger, more ambitious for growth, and more locally rooted than your typical social enterprise). But this years' data gives us a bit more to consider as we can now start to compare year on year data - and my cursory analysis of the data tables while on the train seem to suggest that while Big Potential may either be getting more generous in awarding support or the sector is getting better at targeting whom it should support for support, (there's an increase in initial enquiries from social enterprises who go on to be awarded a development grant: 2.16% vs 0.6%), there are signs that the wider social enterprise sector may be weakening:

1. enterprises being supported typically have a turnover that's 7% less than last year
2. typical net profits have fallen from nearly £18,000 to £3,000 (equivalent to net profit margins falling from 6% of turnover to 1%)
3. assets held by enterprises are roughly half of what they would have been expected to be in the previous year
4. the self-reported standards of current social impact reporting, and assurances over data used within it, by applying social enterprises has fallen by 9% compared to the previous year
5. the overall average investment readiness score of applying social enterprises has fallen from 59.3% to 48.7%
6. and there have been increases in the incidences of poor governance, and poor financial performance on the part of social enterprises being the reason as to why Big Potential hasn't feel able to award support to them

All of this would also seem to reflect a wider narrative and sense of 'struggling' amongst charities and community groups in light of prolonged austerity and recessions...

But... there are also signs that the Big Potential programme is doing what it set out to do - as well as supported social enterprises securing around £3/4m in investment of different types, they are also reporting increases in turnover in the region of nearly £100,000. However, most of this increase seems to be from growing existing services, rather than entering new marketplaces, and the sample on which this part of the data is based is so small - 4% of enterprises supported, it can only be taken as highly anecdotal at best?

For those of us so inclined, there are also some other findings in the data of interest:

• ventures are less likely to be hyper-local than they were previously
• social enterprises are more likely to be structured as 'straightforward' companies limited by guarantee, than CICs (a sign perhaps that CICs are starting to loose some of their initial appeal?)

But these are only my initial playing with the tables in the report while on the train heading out of London this evening - as with my previous initial analyses of evaluation reports like these, I hope others in the sector will pick these up and explore them further, and in doing so, help us all to better understand this sector, and how we might best continue to support it in the future.

statistically speaking, turns out I really am "better than your average consultant"!

As someone who’s self-employed with no line management, one of my challenges is trying to figure out just how good I really am – client testimonials are great feedback (and always appreciated), but I recognise they’re also very subjective. For example, not everyone likes marmite – and I’m aware that not everyone appreciates my approach at times (as evidenced by the rare occasions when my bendy people[1] have been thrown back at me during training courses I’ve delivered…)

And this desire to reflect truly on my ability isn’t just for vanity’s sake – as a freelancer I need to know how I can best pitch myself to clients, and I also need to know where I should focus the investments I’m able to make in myself, to further enhance the service I can offer to said clients.

That’s why I’m always keen to find ways to benchmark myself against my peers and others. Earlier this year, this saw me publicly share the results of my having my approach to reporting my impact compared against the internationally agreed principles of social accounting[2] – pleased report that compared with other consultants, and enterprises of a similar size to me, I seem to be well ahead of most others out there doing work around impact reporting.

It’s also why I try and offer my services through third parties and funded programmes – having an impartial project manager or broker between myself and a client can offer a more objective view of my services and performance. This is because they’ll have similar pieces of work to that I’ve undertaken to compare me against. One such programme is Big Potential[3] – offering awards to social enterprises to allow them to ‘buy in’ specialist support from the likes of me, in their ambitions for growth and in exploring the relevance of social investment as part of those aspirations.

Unusually for such funded programmes, Big Potential annually publish a ‘performance table’[4] of all us consultants who it engages with, in supporting social enterprises. While this is a relatively simplistic table of measures (the number of our clients we’ve support to apply for awards from the programme vs. the number of those clients they’ve agreed should be supported by their chosen provider), it’s nonetheless a useful reference in offering another of the types of benchmarks that I’m looking for.

And the latest table reveals a few interesting themes when I looked at the figures – I seem to be the only active freelance consultant on the approved provider list (the others being larger firms), and there’s no correlation between how many clients a provider supports the applications of, and the likelihood of them being awarded support for them:

Oh – and running the numbers to create some simple averages, it seems that I’ve supported more than the typical average number of clients to apply to this programme, and they’ve had a greater than average success rate when I have!

So – as well as (most of) my clients saying nice things about how much they enjoy my working with them, there’s also a growing body of statistical data that shows I’ve better than the average consultant.

My mum will be pleased.

---

[1] https://www.flickr.com/photos/adrianashton/albums/72157624272560700

[2] http://thirdsectorexpert.blogspot.co.uk/2016/09/how-far-is-my-social-impact-reporting.html

[3] http://www.bigpotential.org.uk/

[4] http://www.bigpotential.org.uk/provider-performance

latest research suggests CICs are still trying to make their way in the wider world of social enterprise

So - as some of you know, I can be a bit of an anorak when it comes to sector governance, and statistics. Not just because my brain seems to enjoy doing it, but because I think that sometimes it's hard for us to get a proper understanding about what's really going on in our sector unless someone looks at published data afresh and offers an alternate view. (David Floyd and Nick Temple are both great at this, and also much more thorough too - I tend to look at headlines only here on my blog)

Anyway - every so often, someone publishes a survey about their part of the sector, and inevitably they never benchmark their charts against other peoples findings... This makes it hard to understand what might be really going on in the context of the 'bigger picture', and therefore how we can best support and celebrate each other.

So in spare half hours, I try and find a comparison against which to try and make sense of such published surveys.  Last time I did this was on the Big Potential programme from the Social Investment Business. Comparing their report of social ventures supported against the wider sector suggests that they've been very successful in engaging a 'new breed' of social enterprise.

But this time I'm interested in CICs, because the CIC Association has recently collated and published its 10 year survey of this form of social enterprise. Now, I want to be very open and honest here in that I've never been completely sold on the idea of this legal form for various reasons, but I've always been open as to why, and also supported some clients to gain this legal form (see other posts here tagged with 'CIC' for more).

The CIC Association survey contains lots of charts and headlines, and in trying to make sense of if these show this type of social enterprise to be in 'good health' or 'having some cause for concern' I've compared it to the wider Social Enterprise UK 'state of the sector' report.

But - a few words of caution before proceeding further:

1) the CIC survey was published in spring 2016, and the SEUK survey in autumn 2015 so there's bound to be a little 'drift' in the sector over that year

2) the CIC survey is concerned with CICs only; the SEUK report includes CICs as part of the wider response base, so there's also some variance and risk of some 'double counting'

However, for my own purposes and interests in trying to stimulate some wider discussion, I'm not too hung up on such technical variances as I think the 'broad brush' comparisons are what are interesting:

• CICs are more likely to be trading directly with the public (75%) than other forms of social enterprise (30%)
• CICs are more likely to fail in their applications for finance (43%) than other forms of social enterprise (20%)
• CICs are more reliant on grants - 25% have them as their main income compared to 11% of other forms of social enterprise
• CICs are likely to be smaller than other forms of social enterprise - most have turnovers under £10,000 compared to in excess of £50,000
• CICs are more likely to be structured to have share capital (private ownership) than other forms of social enterprise (34% vs 11%)

• Both CICs and other forms of social enterprise prefer grants as the preferred option for financing growth
• Both CICs and other forms of social enterprise are likely to be micro enterprises (less than 10 employees)
• Both CICs and other forms of social enterprise are growing year on year in similar ways (60% and 52% respectively)

So there's potentially some clear markers here that make CIC very different to their wider family of social enterprises (more public facing, more open to having private ownership), but also a lot of common ground too (size, growth, and preference for grants to support growth).

However, might there also be some contradictions emerging within this latest survey of CICs too? Potentially they could be seen as a weaker form compared to their 'cousins' in the wider sector, based on their being:

- more likely to be reliant on grants,

- seen as a riskier proposition by investors (based on the extent that they're able to access finance applied for),

- more likely to be marginal businesses (based on most having turnovers below what the average salary in the UK currently is..,)

- that 28% of CICs saying that this form has not had a positive effect on their business.

But its still relatively early days for CICs: while their 'honeymoon' period looks like it might be starting to wane, other forms of Social Enterprise have been around for a few hundred years longer, so investors and funders are probably still getting to grips with the CIC form.

And as I caveated earlier, the above are very much 'broad brush' findings that I've drawn out in a half hour over a cuppa.

However, my hope is that this will help to contribute to the wider discussion, debate, and further analysis. The aim of which should be to help us to better understand how to best support and encourage this (and other) form of social enterprise, so that they can realise their full potential. And in doing so, help bring about a slightly shinier, fluffier, and groovier world for all of us to enjoy.

"we're going to sack our accountant and swear more..."

I had the pleasure this afternoon of spending time with the soon-to-be-graduating cohort of the School for Social Entrepreneurs North West's #scaleup programme - over the last year, this group of social entrepreneurs and social enterprise leaders have been exploring how they might best grow their respective ventures to create even more transformative impact in their local communities.

I'd structured my session with them to be largely open so as to offer anything that they might still need to learn with regards to specific pieces of information, contacts, and suggesting approaches to issues that they might not have considered before (including encouraging them all to watch Yes, Minister!). But principally I wanted to help them to formally reflect with each other on what they'd got out of being part of #scaleup, and what they'd be taking from it as they entered the next stages of their respective journeys, both personally and as an enterprise.

Many took the time to personally thank me as they left the session (always a good sign!), but what I felt was most useful from the session from my perspective was asking them all to share what one thing they'd now learnt that they didn't know when they woke up this morning, or one thing that they'd now do as a result of the day. This helps me understand the impact I've had, and while some of their responses were encouraging, I can't help wondering if I may have (accidentally) gone too far with some of them...

• we're going to find a social investor
• we're going to apply to Power to Change
• I'm going to start claiming more allowable expenses from HMRC (specially in relation to mileage rates for bicycles)
• we're going to change our accountant
• we're going to apply for Social Enterprise Investment Scheme tax relief
• we're going to apply for membership of Locality
• we're going to make changes to our financial management
• I'm going to eat more salad
• I'm going to go 'back to basics'
• I'm going to swear more

What social entrepreneurs personally gained from being part of the programme

How social enterprises have benefitted from being part of the programme

widening gulf in social enterprise sector revealed by new support programme evaluation?

I always try to support enterprises at whatever stage they’re at, and with whatever aspirations they may have – to this end I’m an approved/registered provider through a number of programmes, including Big Potential:  a national programme enabling social enterprises better explore and pursue social investment as a means to support their growth aspirations.

Usually, such support programmes only reflect on their success and impact at the end of their life, but encouragingly some, like Big Potential, are taking a more dynamic approach with annual evaluations to help them enhance their impact over their lifetime.

And Big Potential has recently released the first of its annual evaluations on its performance, and me being me, I wondered what its findings might tell us if taken with some additional external benchmarking (something which many programme evaluations omit to include). And that’s because without this benchmarking it’s hard to gauge how far any evaluations' recommendations may be pertinent in the wider context of the population of enterprises they’re aiming to engage and support.

So, what did I find?

Well, there’s lots of mapping of social enterprises that are published annually, but these are usually exclusive to particular types of social enterprise (co-operatives, development trusts, etc) rather than all of them (which Big Potential is concerned with), so I chose to look to Social Enterprise UK’s latest published mapping as the most relevant benchmark. Admittedly, it’s from 2013, and while a refresh of it is scheduled for sometime this coming autumn, as an initial rough reference I felt it’d serve its purpose for doing some comparative analysis over lunch...

And rather than bore you with various comparison tables here, there’s some striking headlines that seem to appear when you compare Big Potential’s profiling of the social enterprises they’re engaging with against the wider population:

1)    they’re bigger – a typical Big Potential social enterprise’s turnover is £298,405, a typical social enterprise turnover is £187,000; also, the average investment (borrowing) they’re ultimately seeking is about £100,000 greater than for social enterprises in general;

2)    they’re younger – 7 years vs. 24 years;

3)  they’re more hyper-local: the proportions of Big Potential’s social enterprises whose reach is at both neighbourhood and local authority area is higher than the national trend.

So – is Big Potential seeing a new class of social enterprise emerging: new kids on the block who are much more locally focussed and ambitious that the wider sector is? But is there also a potential concern regarding that ambitious growth within this: if their reach is so local, that surely means limited potential for future growth, unless they start to monopolise local marketplaces and so reduce provider diversity and choice?

Of course, this is all highly tentative based on some headline published figures from the first annual snapshot of a new programme that I’ve looked at over a cheese sandwich, but it does seem to suggest that Big Potential is getting it right: it’s only capturing those enterprises who are ambitious for growth - an ambition that isn’t necessarily reflected in the wider sector with nearly half of all social enterprises who approach Big Potential being deemed to be ineligible to apply for support, and only 1.5% of those who are, going on to make a successful application. I'm looking forward to their next years' evaluation and the updated mapping of the wider sector to see what might come next...