profiting from despair - the unfortunate truth about how social enterprises become successful?

There's a common narrative that social enterprises step-in where private businesses can't or won't, and when public services are lacking, to plug gaps in order to ensure people have access to support and activities that they need - something that has been re-iterated in every government national policy document for/about the sector since their first one in 2001.

And ongoing surveys by the likes of Social Enterprise UK into the sector show how it appears to be more resilient and diverse than its counterparts in the private sector.

But...

I've come across a few studies and research reports recently which make me wonder if we should be having a discussion about the ethical implications of this, rather than keep congratulating ourselves each time the updated State of the Sector report is released?

And also, if we should be re-visiting our expectations and understanding about the factors that help drive the growth and successes of social enterprises? 

- A research paper about social enterprises in France found that they prospered more when the wider economy was suffering, and tended to simply 'get by' when the country's economy was performing well (in contrast to private businesses, who grew when the economy grew, and struggled when the economy struggled): https://emes.net/publications/conference-papers/9th-emes-selected-conference-papers/ownership-structure-over-the-business-cycle-evidence-from-france/ 

This trend would also seem to be evident here in the UK, based on data reported by the ongoing VCSE Barometer study, which shows that charities seem to have an opposite hiring trend to private businesses: when private businesses slow the rate at which they're investing in growing their staff, charities are increasing their recruitment, and vice versa:

Could this suggest that social enterprises are a bit like spider plants (also sometimes referred to as the entrepreneur in plant form): if you tend to it too much, it'll wilt. It tends to prosper best when faced with harsher circumstances (less water, less light, etc) than most plants need in order to survive. 

And this is potentially a key understanding - we know our economies go through rounds of repeating recessions and boom periods, as part of natural cycles that will always happen (despite what politicians might like to otherwise hope and believe).

And we know that just as booms tend to create more opportunities for people, recessions tend to see jobs being lost, firms being wound up, etc.

We therefore need to recognise the important role of social enterprises in helping to 'prop things up' in those times of recession (a period when the data seems to suggest that they perform at their best), to help mitigate the negative impacts of the downturn in the wider economy; and crucially to provide a hope and assurance that things will keep going and remain open for people.

But what is it about such harsher trading environments that force private businesses to struggle, but enable social enterprise to thrive?

 

- Also, Social Enterprise UK's State of the Sector mapping raises some potentially important questions that may merit exploring further, through an ethical lens?

* while social enterprises are more likely to have women, BAME, and people with disabilities in leadership roles than private businesses, those that do are usually smaller and generate less income than those that don't.

* those social enterprises that are based in areas of higher deprivation are more likely to be profitable than those that aren't. And as most social enterprises' main customer is usually the general public, this surely prompts a question about how far should social enterprises go in ensuring that they're financially sustainable by generating a profit, but how much should that profit be, if it seems to be increasing where their customers are in greater need of support?

* and social enterprises seem to be less present in sectors and services relating to supporting employment, housing, and social care - areas where there's widespread agreement about there being the most need. 

As with (mostly) all of my blog posts like these, this isn't intended as a bashing of the sector, or the bodies that support and advocate for it - but a reflection on what various sets of data are potentially highlighting. 

That's because I've an idea that we need to get better at looking at numbers like these, if we're to properly understand how to best make sure that we're enabling social enterprises to realise their full potential for all of us - and surely we can only design support that we can be sure works for the benefit of everyone, if we keep asking questions like these?

merging not closing - the future of charities?

Regular readers of my blog will know that I enjoy analysing a good data set - and trying to turn them into simple charts that usually make everyone who seems them stop in their tracks and start to rethink what they thought they understood and knew.

Well, it's time for another 'pause and wonder' moment, as I turn my spreadsheets' gaze on charity mergers...

In the past I've looked at data on the 'churn rate' of charities (how many are being wound up each year, and also in comparison to the extent to which other legal forms are being wound up) - but recently, I came across the register of every charity merger since the end of 2007!

Now, despite my having been involved in 'refereeing' some mergers between charities in the past, it's always felt to me that there's something of a taboo about charities merging - Trustees don't usually seem that comfortable wanting to talk about it (unless their charity is in immediate threat of going bankrupt), by which point any other charities doesn't want to entertain taking it on as a liability which would drain and distract from their existing resources. Perhaps this is why about 3% of all charities are wound up each year in comparison to the 0.2% who merge. Does the variance in these figures suggest that charities are finding it easier to wind up, rather than be able to successfully merge with another charity?

This hypothesis, coupled with the time that a merger between charities can take (6-12 months if you want to do it properly?), seems to suggest that merging as a means for a charity to continue to see its purposes achieved beyond it's own existence is usually not taken up or enacted, even if it may transpire to be the best choice: Trustees are simply leaving things too late in the hope that something will magically resolve before feeling they can start talks with other charities about a merger option while there's still plenty of time (and reserves) to do things calming and in a less risky way.

But what of this 16-year data set about charity mergers I teased you with at the start?

Well, here's the chart:

And to help you make sense of the squiggles in it 

• the blue line shows the number of charity mergers happening each year. Interestingly, these started to significantly increase in the years BEFORE the Covid pandemic, and have now started to drop, even during the cost of living crisis. This suggests that massive financial shocks to the sector are not having any influence on charities exploring merging.
• the orange line shows the average number of mergers each year over the last 16 years. 
• the dotted line is the next one of interest: it shows the linear trend of charity mergers over the last 16 years - admittedly, it's rising very slowly, but it's rising nonetheless, which suggests that ever so slowly, more charities are starting to pursue the merger option to best safeguard their purposes and support for their communities. For example - in the period 2016-2022, the likelihood a charity would merge increased by roughly 75%, in comparison with the likelihood a charity would be wound up increasing by approximately 10%. 

But is it too little too late?

We're still seeing only 0.2% of all charities completing a merger each year in comparison to the far larger 3% who are wound up.

Perhaps this chart and the notes below it will help more Trustees start to explore the merger option sooner rather than later, and so better protect the people they were originally set up to support?  And if they do, could this see a flipping of the current numbers, so that in the future, more charities merge than are wound up?

Does social value make us more sustainable?

This is part 2 of a blog chain I started previously, exploring further some of the queries that were put to me following my 'opening provocations' at Social Value UK's recent member exchange conference.

(for the back story see - https://thirdsectorexpert.blogspot.com/2023/10/is-our-social-value-our-legacy.html)

This post focuses on the second question that was posed after my opening ramblings: "does social value make us more sustainable?"

Having slept on this one since the event, I'm not sure that I've changed my position on what I said at the time:

- Social value is of interest to different people in different ways, and at different times. For example: if you're reporting your social value to increase your chances of winning contracts, or being awarded grants (to support you be financially sustained), then the social value priorities of those people will be changing every few years. Does this mean that your approach to social value should be constantly changing too? While that may not seem like too much of an initial problem, let me put it this way: what if you changed the way you did your financial accounts and reporting every few years?

- And when do you know you've become 'sustainable'? Statistics show that most organisations don't make it past their first 5 years, so the technical definition/benchmark for your having become 'sustainable' is that you're still going after 5 years. But the world keeps changing around us (see above point); and just because most organisations don't get to their 5th birthday, doesn't guarantee that those that do will always be able to continue riding off into the sunset... 

- For me, sustainability is about the relationships we have with each other (a continuation of my idea in the previous blog/question), and my idea is that understanding our social value, and how its come to be created, means we can better manage, engage in, and ultimately sustain these relationships so that more good stuff can hopefully keep happening as a result of them.

All the other questions put to me at the time, I think I resolved and answered in a way that I was happy with - it's been these 2 questions (about legacy, and sustainability) that made me pause in the moment on the day, and I wanted to revisit to make sure I'd best considered them.

But MemEx2023 was live streamed and recorded - there's a chance that people may yet reach out to me in the future with other questions that the ideas and arguments I shared provoke... And if they do, then this is the place where I'll share what I think might be the really interesting ones.

Is our social value our legacy?

Earlier this month, I was invited by those nice people at Social Value UK to speak at their annual members conference about the promise and perils of how we approach creating a financial value to represent the good stuff we deliver and create through the work we do - suffice to say, not everyone participated in the customary applause when I was ushered off the stage, but others came up to me throughout the rest of the event to thank me...

However, a couple of questions were put to me by the audience in the room, and those watching along on-line, that I wanted to reflect on here.

The first of which went along the lines of "is the social value we create and report our legacy?".

My initial response to this is that I tend to try to not think about how people in future years will remember me (after all, chances are that 50 years from now, no one will even remember my name, let alone what I did or didn't do) - my interest is therefore in the relationships I have today; and my interest in understanding the social value and impact I'm creating in different ways, is in how this helps me to develop these relationships to realise their full potential.

But I realise that that's a very blinkered response, and very biased on my part - after all, as a business, I'm not trying to influence or lead systemic change (get laws reviewed etc), but other people are. And in their cases, then absolutely, their identifying and reporting their social value is a crucial way of helping them to make sure that they're achieving this as part of helping them manage how they work in pursing this goal.

So on balance, social value isn't our legacy, but it can be a critical element of helping us make sure we create the legacy we may be striving to leave to the world after our time is up.

As for what the other question was... you'll have to check back in with this blog later! 


(kudos to Natasha Jolob for snapping this pic of me unawares, hence the lack of usual dramatic posing! 

https://www.linkedin.com/feed/update/urn:li:activity:7119974691779293185/)

in praise of the laundrette

In the past, I've waxed lyrical about how great libraries are.

And if you've ever been on any sessions I'd led about getting to grips with bookkeeping, or feeling more confident in how you can understand accounts, you'll know I also rave about museums too.

But I now want to create a trilogy of destinations that are often overlooked, but which we should all really recognise and value more - laundrettes.

Once a bastion of high streets, they still offer a critical and unparalleled role in our communities, when you consider what they represent and offer (beyond the ability to do a large load): 

• they are meeting places = offering people a neutral space to come together and so help tackle social isolation, and facilitate community cohesion through enabling people to share time, and conversations together who might not otherwise meet.  
• they are warm spaces = in an age of increasing fuel poverty, a bank of tumble dryers will definitely keep the chill off, without having to use energy to turn on additional heaters.
• they help us reduce carbon emissions and reduce environmental impacts = every so often, I hear about a community somewhere that's launching a tool library (how often do you really need to have a power drill?) Surely better in lots of ways to be able to borrow one occasionally, rather than buying it and only using it once a year. Laundrettes offer us that option of shared equipment that we all need to varying degrees of frequency, but may struggle to otherwise (1) have the space for, or (2) afford.
• they act as community hubs = no laundrette I've ever visited has ever not had noticeboards and information about local events and services.
• they offer economic inclusion = machines are usually not contactless, instead relying on coins. And that's important, because here in the UK, over 1 million people don't have a bank account (about 1 person in every 70).
• And on a purely personal note, who doesn't love the smell of freshly laundered sheets..?

So please - next time you're passing one, even if you don't have any bags of laundry with you that need a quick rinse, just as with libraries and museums, step inside and savour them.

They've been closing at the rate of about 4 every week for the last 45 years - when the last one goes, we'll loose all of the above, and probably won't realise just how important they were until it's too late...

why not being an academic means university students get more benefit from my teaching

Over the last 25 years or so, I've found myself approached from time to time to speak as a guest / associate lecturer within within various universities and faculty schools. And sometimes, I've also been asked to help design new degree course content around themes of social entrepreneurship; social innovation; and there's even a podiatry degree that now has an enterprise start-up module in it thanks to me!

The feedback is always that students enjoy my sessions, and they seem to get more out of them than they do in their usual taught syllabi (a group of students who were part of a startup bootcamp I was part of told me that they'd gained more useful knowledge from the 2 day sessions I'd delivered, than they had from the last 2 years of their business degree!). 

However, despite this consistent appreciation and validation from students, I'm sometimes not invited back...

So there's obviously a dilemma here: students enjoy it, but the university doesn't.

This relates to the old-school marketeers story of the bakers dilemma: understanding that your customer and consumer are often two very different groups of people, each with their own divergent expectations and needs: 

- students want new experiences, they want to learn in new ways, they want to develop their own critical skills in new ways;

- but further and higher education is a regulated teaching context, where curriculum content has to be covered, and assessed in pre-determined ways.

I'm therefore always trying to walk the line between ensuring a university is able to ensure compliance with its teaching requirements, but at the same time, students get an experience different to what they might usually enjoy.

But I also recognise that I'm not 'academically gifted' in the traditional sense: I scraped through school with a clutch of GCSE passes; similarly limped through College with only 2 A-Levels just about passed; and was only offered a place at a business school through clearing (which subsequently saw me graduate with a 'Desmond'* after 5 years) - but I've since gone on to create, co-design, and develop curriculum content and modules for a number of universities and international colleges; influence national policy and company law, etc. 

And all of this means I carry a prejudice and bias about how I see the value of taught curriculums and formal education - but in turn, this means I'm more emboldened to take risks and do things very differently to how students might usually experience learning in academic institutions. And it's this difference that they seem to appreciate and enjoy: having someone who not only talks about how things can be done differently, but physically models this too, encourages them to re-examine their own wider learning and how they are engaging with it, and in doing so, get even more value and benefit from it.

* if you don't know what this is, then I'm obviously far older than I'd like to think I am for making this cultural reference...

Nihilism, safety goggles, and the number 6 - freelancing with imposter syndrome

I've blogged in the past about the risks that being a freelancer can have on your confidence, and also highlighted in my book about imposter syndrome how working in this way can also mean you appear to be more prone to such feelings of self-doubt.

It was therefore exciting and encouraging to have been asked by Freelance Heroes (who are ultimately responsible for my writing the book in the first place), to lead a session to share and explore some of the ideas in my book - in hopes of helping offer fellow freelancers some encouragement and practical ideas for how they might get more out of working as such.

And whilst it's always exciting to share the books' ideas with new people to get their views on my arguments, and what these are based on, I also find it valuable to 'gather some more stories' about people's experience of feeling like an imposter - not just for the sake of possible 2nd edition, but more importantly to share with others through this blog, in hopes that they may be of encouragement to others I'll never meet...

People in the session shared that they'd signed up to it, in recognition of some of the impacts that feelings of self-doubt were having on their freelance careers, and which they wanted to try and do something about:

• not charging as much as they could/should/(needed to), and so financially struggling more than they recognised that they perhaps needed to;
• not pursuing contracts or projects that would help raise their profile and secure future work, for fear that they did not hold the right qualifications for it (despite simultaneously acknowledging that they had significant relevant experience).

There was also a key point that one person made about the confusion and overlap between feeling like an imposter, and having a lack of confidence.

It was also interesting and challenging to hear of some of the practices that some of the freelancers in the session had created and adopted, in how they currently deal with feelings of imposterism:

• phoning a trusted friend for a 'sanity check';
• adopting a nihilistic mindset, and disassociating themselves from their work, to try and protect themselves against the potential risk of things not working out as they might hope they would.    

As we wrapped up the hour together, everyone shared that they'd found the time together of encouragement, and all committed to take a range of actions as a direct result of it:

• increase their knowledge about specific areas of their existing work (libraries are always a good place to start for this!);
• explore and better understand the 'origin stories' of what their doubt about their skill may be rooted in, so that they can design more effective ways to better manage it;
• create feedback loops with clients and others;
• talk about these feelings more openly with others, after realising that everyone feels them, to be able to hear others' experiences, and through these, better understand their own;
• adopt a practice of self check-in questions with themselves when they think they may be feeling it, to help better manage these feelings of doubt and move through them;
• experiment with different ideas to see which might work best for them (but as with any experiment, always make sure you wear safety goggles, just like when you were at school!).

What also struck me about the session was the number of people who were part of it - normally, on-line sessions and events I've been part of, or heard about, seem to attract (or need to book on) upwards of 15 people - we were a perfectly formed '6', which seemed to naturally allow for everyone to feel they could easily speak, and have the opportunity to explore and directly apply ideas and prompts to their own personal circumstances and situations.

So if you're thinking of joining a session to explore some of these ideas or feelings in the future, perhaps try and avoid the 'sell-out'/'big ticket' types, and hunt out the smaller groups as you'll likely get more benefit and encouragement from them (but only if you're really serious about wanting to do something about feelings of being an imposter...)