David Floyd (beanbags and bullsh!t) presents a witty little contribution to the debate about the “social enterprise” badge being promoted by Rise asking what all the fuss is about and why such a badge – the “social enterprise mark” – is needed.
As it happened I had been talking with a colleague about how much I hate the term “social enterprise” oozing as it is with superiority and smugness (although my distaste for this term is dwarfed by my loathing of the term “third sector”). Are all the world’s other enterprises anti-social just because they have the gall and cheek to make a profit?
Now it seems, some organisations that fit a preordained set of requirements can stick a shiny new badge on their headed paper declaring to the world that they have achieve the elevated “social enterprise” status! Well forgive me for not sounding my horn or waving flags to celebrate this new initiative.
We need to drop the wholly artificial distinction between a “social” entrepreneur and the ordinary run-of-the-mill sort of entrepreneur. It always was a nonsense, it belittles the creation of value (or rather places greater emphasis on one type or measure of value) and shoves aside the vital importance of private enterprise in making places work.
3 comments:
Bang on target.
Can anyone show me a business that is not social?
One that pays no-ones wages; that provides no-one with identity and respect?
That meets no customer needs?
That creates nothing that is valued by anyone?
One that does nothing socially useful with any of its profits?
It is nothing to do with legal structures, where profits go or being part of a ’social enterprise movement’. It is part of being a human being and being enterprising.
How many billions was it that Gates popped into the Gates foundation? Rowntree, Kauffman, Carnegie, Ziff, Ford, Getty, Mellon, Packard, Wellcome, Sage…
There is just ‘good’ business – ‘bad’ business and an awful lot of stuff somewhere in between.
Some businesses, and the social entrepreneurs behind them (can you show me an entrepreneur who is not ’social’?) start out ‘bad’ unsustainable, polluting, exploitative etc and become ‘good’.
Some that start out ‘good’ get trapped in never ending battles for survival and become little more than ‘miserable grant writers’.
And there is a whole lot of subjectivity in making the distinctions between good business and bad business.
There are lots of us who have set up ‘for profit’ businesses as the simplest and easiest way to drive forward our social missions – which we hold just as passionately as our ’social enterprise/not for profit distribution’ colleagues.
Once we start to recognise that ENTERPRISE is a tremendous driving force for innovation and change; good and bad; not only in the the economy but also in societal and global development, and stop pretending that only officially sanctioned, card carrying members of the ’social enterprise movement’ have a monopoly on ‘good’ we might start to get some traction on developing enterprise as a tool for progress.
Where does a social enterprise get its start up capital from?
Ultimately?
I understand that they may get it from a wide range of sources – but in essence where is that value created before it is made available to a social enterprise?
If I am right then it comes from:
*involuntary or voluntary taxation on ‘for profits’ (which may or may not themselves already be providing positive social outcomes)
*gifts or
*other forms of voluntary taxation such as the national lottery, foundations etc
But ultimately the source of nearly all of this cash is the ‘for profit’ sector*. In essence money is taken from, or given by, those who have created profits to invest in ’social enterprise’, including public services, that have little realistic potential for generating sufficient profit to make the risk of private investment worthwhile.
The extent of the ’stealth’ in the ‘taxation’ varies widely in different contexts. For example if I buy fairtrade chocolate I know that I am paying a premium to provide a social good. The chocolate bar is clearly labelled and I can easily find out more about how my premium is used to derive social gain.
However if I rent an office in a managed workspace provided by a ‘Community Interest Company’ am I equally clear on the premium that I will be paying to enable them to generate a profit in order to re-invest back into the community? Or if they will ever make a profit?
Is the product clearly labelled in the same way that my fairtrade chocolate bar is?
Are the mechanisms for re-investing my taxation clear and transparent?
I can see lots of salaries that need to be covered from my rental. I can see additional overheads (atria, gyms, cafes, sexy furniture, light fittings etc) that need to be paid for before any profit is created for re-investment.
And I can see prices that are significantly higher then the local market rate. I can’t clearly see how my premium will be used to benefit the local community. It feels like a stealth tax!
Even if the labelling is transparent and the mechanisms for re-investment are clear then I still have a problem with this model. While both service provider and service user are engaged in a fair exchange from which both gain, I am not sure about what drives excellence in the service provider in the long term. It feels a little like any other subsidised public service – and these have been notoriously difficult to manage efficiently and effectively.
As much energy goes into maintaining the subsidy as into generating value. The ‘taxation’ gets locked in.
So is social enterprise just another stealth tax? Well that would explain the massive extent of political interest.
But social enterprise can and must be so much more than this. It can be the genuine organisation of a community around the concept of using enterprise to create social value. It is this vision of a genuinely ’social’ approach to enterprise that I believe we are at risk of losing.
*I believe that there is a tiny venture capital movement developing to invest in social enterprise – but I am not sure what the return on investment is that these venture capitalists seek. If it is a true VC model then it will be a substantial profit on their risk capital. If they just want to see social good then it is not venture capitalism as I understand it - but just another form of giving.
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