Tuesday, 20 September 2011

What's the point of social enterprise then?


The "third sector" often tells us how much more caring and socially aware it is. How the ethos of "not-for-profit" is so much superior to the dog-eat-dog world of for profit business. And, of course, how they're not in it for the cash. It seems they lied - or that's what is implied by these words from top Scottish social enterprise bod, Laurence Demarco:

“When you are paid if you get results, you will be inclined to select people who will give you a result, which will lead to whole groups of people which no-one will work with - it's inevitable,” he warned.  "I'm surprised at the lack of outrage from voluntary sector leaders."

So the voluntary sector - all those well-paid "leaders" to the fore - isn't interested in doing things voluntarily or being incentivised by delivering outcomes that benefit people? And, so long as the payment exceeds the cost, the market (for that's what it is) will continue to find people to help - only when either there's no-one left requiring assistance or the marginal cost exceeds marginal income will things stop.

But if you're a social enterprise - not-for-profit and all that jazz - this boundary doesn't matter. After all you have huge margins on helping the easy-to-help clients that, because you're not paying evil shareholders, you can invest in subsidising support to the really hard-to-help people.

That's the whole point of social enterprise, surely?


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