*Other vehicles to create social change are available

I've just put Frank to bed - far past his normal bedtime.  He came with me this evening to a talk by business author and social entrepreneur Robert Ashton.  I like Robert - he's a human-scale entrepreneur on a talk-circuit dominated by supposedly super-human entrepreneurs who most of us find it hard to relate to.  He talks a lot of sense.

He also had a picture of Frank in his presentation, much to his delight.  I'd seen Robert at Voice10, and I'd told him that I was bringing him along - and his photo turned up by the power of Facebook, to illustrate a point about what the world may look like in 2100.

Robert was talking about social enterprise as tomorrow's enterprise.  Someone asked a question at the end, which I've summarised here:

"When we tell people that we run a social enterprise, they don't understand.  They just say, "Why don't you just run your own business?"  We say it's because we care, but that doesn't seem like a good enough answer.  What's a snappy way to tell people why we run a social enterprise?"

I'm sure it's a question that many people ask - why don't you just set up your own business?  I think it's a valid one, and it's one that I ask people when they come to me, asking me to help them to set up a social enterprise.  It isn't for everyone.  It also isn't the only business model for creating social change.  

I imagine there are value judgments in the statement "it's because we care".  The assumption is that people who don't set up social enterprises don't care - they're just fat cats out to make a fast buck at the expense of everyone else.  Those people exist - but there are also plenty of people who run businesses which aren't structured as social enterprises (as we tend to define them in the UK) and who are doing good.  And I think there are plenty of others who are coming round to the idea that they could do more good in their business, but aren't wholly sure where to start.

This is one of the things that concerns me about the Social Enterprise Mark.  The world's in a right mess.  And the social enterprise movement seems to be setting itself up as THE vehicle to get us out of this mess.  The Mark will, in their words, represent businesses working for social and environmental aims.  

Except it doesn't.  It represents businesses working for social and environmental aims which spend at least half of their profits on socially beneficial purposes.  So there's a value judgment there about profit, which rules a lot of us out.  

I think in many cases profit-distribution and ownership are red herrings.  Often they make sod-all difference to how much change is created, and, at times, can get in the way.  At other times they magnify the change created by the business. So, for example, I will soon set up a business as a social enterprise - because I think that particular business will achieve more good structured that way.  But social enterprises aren't (as I think the questioner above is suggesting) inherently good - or necessarily better at doing good than other businesses.  

I'd be right behind a Social Business Mark which was awarded to businesses which have clear social aims, and which provide externally verified evidence of their impacts.  I'd even be happy if the businesses which had certain "social enterprise" structures got a further tick in the box.  But given that my interest is in social change, and is not ideologically driven by a dislike of profit distribution, I am finding it hard to get enthusiastic about the Social Enterprise Mark.

Comments

[Robert Ashton]

I agree with your criticism of the social enterprise mark. More so having met a passionate and successful social entrepreneur at Voice 10 who'd failed to pass the assessment. Social enterprise doesn't need a kitemark. It's what you do that matters, not the logo on your letterhead.

As with any so called 'quality mark' once you achieve it there's less incentive to follow it. In my view, it's the way you conduct yourself and your business that defines you as a social entrepreneur. Ilike the idea and the discipline of feeling the need to demonstrate my values each and every day. The only recognition I want as a social entrepreneur will be delivered by those whose lives I change.

[David Floyd]

Like both of you, I find the Mark highly problematic. I see the point of Fairtrade Mark because it's based on specific criteria related to the social impact of a product so, the customer can decide for themselves whether they Fairtrade represents their view of fairness or not - and whether they think the impacts in delivers are worth paying more money for.

While I understand that not everyone would be interested, I don't think it's impossible to do something similar based on specific business structures. A Co-Op Mark makes sense because it has a clear specific meaning. And people either would or wouldn't care whether or not a business they bought from was a co-op.

In principle, I think having a Mark which attempts to create some criteria based on the subjective notion of social goodness and the idea that this directly relates to organisational structure and profit-distribution is an idea that's doomed to failure.

It's too soon to say just how doomed this particular effort is but I think making it a centre-piece of social enterprise lobbying is a serious mistake.

[Lucy Findlay]

Hi Rob et al,

Thanks for all the comments - it's really encouraging to see such passion among Social Enterpreneurs around the launch of the Mark.

I was hoping to address some of your concerns in the hope of clarifying some of the issues around this debate.

While defining social enterprise is always a contentious issue, it is important to do so if we are to ‘get it out there’ in the mainstream, with clarity and robustness. The criteria has been through different rounds of design and testing, including extensive testing during the 2-year South West pilot. Requiring a %age of profits to be used for social/environmnental objectives has always been widely agreed upon and has not been a significant problem for organizations interested in applying.

The Mark has sought to find the middle ground when agreeing the criteria. For example, take a look at the recent Senscot take on this: http://www.senscot.net/view_res.php?viewid=9128

They are taking the opposite position, so understandably we are not going to please all of the people all of the time.

The previous Social Enterprise Mark project delivered by RISE in the SW in fact required 65% of profits to be used for social/environmental objectives. The Community Interest Company structure which was also formed after wide consultation also requires 65% of profits to be used for social/env objectives. (This remained the same even after the CIC Regulators recent extensive research and consultation into this area.)

The new Social Enterprise Mark has loosened this to 50%+. This was agreed because it is a direct translation of the (widely accepted) definition: “Social Enterprises are businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or community, rather than being driven by the need to maximise profit for shareholders and owners.” i.e. “principally” equals 50%+

Social enterprise is a model whereby social and environmental objectives are safeguarded in the business through: the aims and objectives, the use of profits and the asset dissolution clause. That is what the Mark is identifying as an offer to the customer. Other models also exist and we feel diversity is a good thing!

I've written more about this on the Social Enterprise Mark blog over at www.semarkblog.com (which will soon be moved across to the main Social Enterprise Mark site), so feel free to leave any comments you have there but I'll also look out for any further comments here.

[David Floyd]

Lucy,

In a general sense, if you're being criticised from all sides you're probably doing a pretty good job but, in terms of the challenged of convincing the commentators here I think you're probably on to a bit of a loser.

That's in the sense that none of the three of us seems sold on the idea that what we really need to focus on is promoting social enterprise as a thing done by organisations called social enterprises.

I understand that that's the agenda of the Social Enterprise Coalition but I open and respectfully don't support it.

I happen to run an organisational that uses 100% of its profits for social/environmental purposes but I don't regard not paying dividends as having any specific social value.

What I do support is both business solutions to social problems and everyday business being done in a way that achieves positive social outcomes.

Structures might play a role in helping organisations to achieve either of those things but they don't necessarily and structures aside, I don't currently see how the Mark represents anything that has any objective meaning.

But if promoting organisations called social enterprises is the aim, I fully accept that it could be the right way to do that.

[Geof Cox]

I do so agree with David's comment - hope Rob won't mind if I quote here a very apposite post from my own blog, which started from a question I received in an e-mail last week:
"I'm going to the SE conference in Cardiff next week. On their registration form they have Charities and Social Enterprises listed in different delegate fee categories. I thought that Charities (or more specifically their trading arms) are SEs? Am I easily confused?"
I get a lot of questions like this at workshops and seminars, and you can read my own attempt to cut through the definitions confusion here: http://www.geofcox.info/index.php?q=node/75
But this particular asking of the question did make me think a bit harder - because it came from a lady who has worked for years at a high level in social enterprise - actually for one of the employee ownership apex bodies - and who is currently researching her Masters in Ethical & Responsible Tourism.
Do we just have a definitions mess - or is there a bigger tragedy going on here? Have we actually succeeded in taking our wonderfully clear and simple and popular message - that you can do business to do good - and muddying it up so thoroughly that hardly anybody can now understand it?

[Robert Ashton]

This is all good stuff, but I am still pretty sure that it's what you do, not the logo you sport or the structure you adopt that counts.

Social enterprise, like beauty, is surely largely in the eyes of the beholder.

[Jeff Mowatt]

Agreeing with Robert above, there are many ways to propagate social good, each having their own strengths and suitability in a variety of circumstances.

Discussing this recently on Third Sector Forums, I asked whether the cooperative principle of cooperating with other cooperative might not have validity in the seemingly highly competitive world of social enterprise.

On the mark itself, I can be both pleased and displeased. First because it's what we described and published online 14 years ago in as a proposal for an alternate paradigm in a critique of Western capitalism, yet at the same being aware that government who funded it, has been the greatest obstacle to inplementing it when we introduced it to the UK 6 years ago.

We now find ourselves working overseas to leverage social enterprise in support of some of the worlds most vulnerable and needy, with UK government funding others to re-invent the wheel and seemingly wanting to airbrush us out of the picture. It has the consequence of sweeping our social target under the carpet along with it.

To illustrate precisely what we're up against, here's our report on the conditions which were discovered in a home for disabled children.

http://eng.maidanua.org/node/581

[MJ Ray]

I'm really surprised to see Lucy Findlay write that "Requiring a %age of profits to be used for social/environmnental objectives has always been widely agreed upon and has not been a significant problem for organizations interested in applying"

Does that mean that I imagined the co-ops who have been told they don't qualify for the Mark because of the arbitrary %age rule?

Myself, I work for a co-op which was interested in applying for the mark, but the %age is one significant problem among many.

[Socialbusiness]

The co-op point was one raised by Vivian Woodell, chief executive of The Phone Co-op, at Voice10. He said he was asked to apply for the Mark but his organisation doesn't fulfil the criteria. This is ironic given that The Phone Co-op was named social enterprise of the year by the Coalition in 2008.

[Dave Dawes]

I have no problem with the SEMark being "A Mark" but it will never work as "THE Mark" because so many widely-recognised-as-social-enterprises are inelligible. It's like CICs (which were designed as THE social enterprise legal structure) and work for some social enterprises but not others.

The Mark as it currently stands seems a fairly natural fit for large CICs and some large Industrial Provident Societies (but not all). Trading subsidiaries of charities would be ineligible as would publically floated social enterprises (Social Stock Exchange anyone?) and it is too high a threshold for start-ups.

There is also a wider point about who the audience is and it seems to being pitched as a marketing tool for public sector comissoners, may of whom (in my experience) think that social enterprise is synonymous with CICs.

[adil]

i've got to agree with the author. we describe ourselves as a 'social innovation' company because we're interested in finding new ways to make society function better. in huge, ambitious, world changing kinds of ways. but we want to get paid for it too. which is why we're not a social enterprise, but i'd like to think that doesn't make us bad, or any less worthy of support or recognition. i'm thinking aloud whether social enterprise structures mean they have an in-built limit to their scale.

the author also talks about other structures. here is a description of ours. essentially, a design consultancy, which feeds a series of subsidiary entreprises. http://2eh6.sl.pt

[Geof Cox]

As with co-ops, I have raised the issue within Social Firms UK that not all recognised Social Firms can qualify even in principle (some because they are co-ops, others for other reasons).
Part of the problem is that the SE Mark propagates much of the government's fundamental confusion about the nature of social enterprise - for more on this see:
http://www.geofcox.info/index.php?q=node/100