With Social Enterprise becoming more popular within public sector and government circles, is it all getting blurred out there? Is there a renewed need to be clear about what social enterprise is and if there is, how might we go about it?
Remember the Queen’s speech? Social Enterprise was within in it, I’m not sure Her Majesty would be able to sport a definition if asked, ‘a social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners’ (DTI, 2002).
We also hear social enterprise rolling off the tongues of government ministers weekly, if not daily. Indeed last week’s QuestionTime considered whether the Big Society [an interesting idea that's really about volunteering and local control, creating a civil society that's not reliant on others, that many social enterprises are already doing] was being dismantled by the budget cuts and lo and behold MP Frances Maude talked ‘social enterprise’ within his answer.
Whilst Big Society is related to Social Enterprise and indeed an opportunity for social enterprises to do even more ‘good business’, we must remember that social enterprise in not about getting hundreds of volunteers to do things for nothing. It’s about employing people [normally those who have difficulty gaining employment] paying reasonable wages and trading either a service or product or both.
Last week my old colleague Eleanor Cappell [BEN PCT Social Entrepreneur in Residence [SEiR]] Tweeted news of a GP firm that was setting up as a social enterprise. Reading the blog this enterprise seems to be considering setting up as a Cooperative and proudly states how the enterprise is going to be owned and influenced by its staff and local community, this is good news and could bring tangible improvements to their patients and local community. However, whilst we hear good news stories like this where social enterprise is being embraced it has been a time of debate and blurred lines.
We’ve heard stories recently with public sector services externalising, such as Southwalk and Westminster Council’s Communications Department, but this alone does not necessarily make it a social enterprise [see BSSEC Blog: The social enterprise sector brand must not become diluted by 'nearly social enterprises'], if the staff themselves aren’t significantly disadvantaged, there needs to be a tangible benefit for the users too, in this case the local citizens.
I’ve been intrigued as the CIC Association has had renewed debate over the last week amongst its members. The debate essentially discussing what some members see as a ‘double levy’ with regard to the Social Enterprise Mark’s [an audited standard to prove social enterprise] decision to increase audit fees. The majority arguing that the SE Mark is little more than a ‘badge to hide behind’.
Working for iSE which is a Community Interest Company [CIC] and a proud holder of the Social Enterprise Mark [indeed just last week we became one of the first to gain a renewed accreditation], I can understand those social enterprises that chose the CIC legal structure’s arguments. In order to be a CIC there are significant checks and balances that ensure you are a ‘social enterprise’, and therefore it would seem that a CIC doesn’t need the ‘Badge’. But does this ‘badge’ help ensure that social enterprises do actually ‘walk the talk’ and perhaps more importantly, clarify to others what a social enterprise is?
Last week too, we heard that Finland may be taking on the Social Enterprise Mark as it is tipped to go international. Within Finland there is [as far as I can tell] only one type of social enterprise which is more defined than in the UK. Indeed Finland’s model is more akin to the UK’s ‘Social Firm’ model [which by the way iSE is too]. So it seems Finland’s motivation is similar to what our motivations should be:
- to proudly stand for social enterprise
- to ensure the brand integrity
- help ensure that those who aren’t aware of the movement have a way of recognising social enterprise
- to help ensure that the lines of what is and what isn’t a social enterprise are clear.
So as you can see social enterprises can be CIC’s ltd by guarantee; CIC’s limited by shares; Cooperatives; Companies Limited by Guarantee; Trading Charities etc..However, holding one of these legal structures [with perhaps the exception of the CIC] does not automatically mean that you are meeting the definition of social enterprise we therefore need to get the message right, a point Alison Ogdon-Newton [Social Enterprise London] made at the beginning of the year.
I have to disagree with many of the comments made by the CIC Association’s member’s, as whilst it may not be important for a CIC to have an identifying mark [other than the CIC itself], it’s important for the rest of the sector and wider UK population. The Social Enterprise Mark is not a ‘badge to hide behind’, it’s the only thing we currently have in the UK which covers all social enterprises, no matter what legal structure they chose which enables them [and more importantly others] to see that it actually is a social enterprise.
A final point the Mark won’t be valuable unless social enterprises adopt it to achieve a scale similar to ‘Fair Trade’ which is now recognised Internationally by those within the movement and outside of it. So I’d like to encourage social enterprises to go for the Mark CIC’s included. Yes it may cost up to £300, and whilst this may seem a considerable sum at present, once the Mark reaches sufficient scale and recognition it will be a small price to pay and significantly less than other standards e.g. Investors In People [IIP].
