Small and a bit frightened

I spent Monday and Tuesday managing the delicate balance between running a social enterprise and attending the major conferences where people talk about social enterprise.

Usually even the best social enterprises conferences feature 75% overly positive non-specific bullshit and 25% interesting discussion. This year’s Good Deals and Guardian Conference seemed different. While much of the bluster was still there and the flurry of exciting new financing models continues unabated, the underlying atmosphere was a bit less smug and bit more thoughtful. There seemed to be fewer gratuitous potshots at public sector bureaucrats and less about how social enterprise definitely was the solution to most (or all) of the world’s problems.

I think the main reason for this change in mood is that many leading figures in the social enterprise movement are worried. Some are worried that their organisations or many of the organisations they represent could go bust during the next 12 months, others are more generally peturbed at the possibility that social enterprises might really be saddled with the responsibility for filling the hole left by massive cuts in public services.

The biggest hint at this growing climate of fear was the fact that most platform speakers at both conferences were acknowledging that most social enterprises in the UK are really, really small. That’s not a major revelation but the fact that it’s being openly acknowledged by leading figures in the lobby and social finance world is a major shift from the years of “our surveys reveal that 110% of people are absolutely desperate for a social enterprise to collect their rubbish”.

As I pointed out on the Guardian’s new Social Enterprise Network last week, it’s Serco, Capita and friends who will be collecting your rubbish or giving you a parking ticket if the council isn’t. What most social enterprises will be expected to do is to provide the services they already provide to supplement or take the pressure off core public services with less resources than they’ve had previously.

This is likely to accentuate the practically massive but rhetorically under-discussed gap between third sector social enterprises – social enterprises that combine some trading with an enterprising approach to the delivery of (in reality, if not technically) grant-funded activities – and the few social enterprises that are real trading businesses. Aside, from the discussion of whether many social enterprises will be able to win commissioned contracts from councils or NHS agencies competing in a market with private companies, there’s the bigger issue of the services that will just stop being commissioned. Historic conference bluster aside, most self-defined social enterprises will be just unable as charities and other community groups to replace grant or commissioned income with trading activities.

Mixed in with the public funding debate is the question of the role of social enterprise in building The Big Society. While the government’s Big Society adviser and social entrepreneur, Lord Nat Wei, was at Good Deals comparing Big Society to the internet – people couldn’t have imagined 20 years ago how big the internet would be now, the Big Society will be really big in 2030 – lobby insiders suggest that, partly due to his penchant for bizarre metaphors, Wei is no longer on Number 10’s list of top Facebook friends and, while he may continue to advise for some time, that advice will politely ignored by the key decision makers in government.

It’s clear that The Big Society Bank, promoted by Civil Society minister Nick Hurd at both conferences, certainly will seek to make more cash available for investment in social enterprises (and others). What’s less clear is how the emerging Big Society models currently championed by ministers – mostly focused on reduced state support mixed with increased involvement of volunteers and unpaid unemployed people – will enable third sector social enterprises delivering uneconomic activities in the community to generate the cash to sustain their activities and pay the money back.

The good news for social enterprise at the end of 2010 is that both politicians and much of the general public no longer have faith in the public and private sectors to deliver the combination of economic social benefits that everyone wants. The looming bad news is that politicians may expect social enterprise to deliver what they other sectors don’t or can’t but with little or no resources.

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7 Comments

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7 responses to “Small and a bit frightened

  1. David, I must say before anything else, that the Guardian Social Enterprise network is little more than a collection of blogs within the Guardian’s mechanism for reader comment. I discovered yesterday that I’ve offered too much of the truth as I see it and have now had comment privileges withdrawn, with all history removed from the entire Guardian site.

    We’re small, but not scared in the least. We’ve stood up and spoken out where it is dangerous to do so, endured threats and smears and overcome serious illness. We’re small and angry above all about being marginalised. Not long ago, I’d related this to John Mulkerrin of the CIC Association along with the term “no more scraps” which seems to resonate how he feels too,

    Six years ago, we’d put a business plan for social re-investment forward to SWRDA and ICOF, a rural broadband strategy which was projected to yield £70 million investment for seeding new social enterprise. SWRDA said they get back to me then, if it matched their plans, they said the same thing last week when I reminded them that such projects had since been funded in other counties, based on the same community interest approach.

    Excluded it would seem from the opportunity to deploy our sustainable model in the UK, we’d turned toward Eastern Europe spending six years lleveraging social innovation in Ukraine. I have numerous responses to illustrate that we’d sought assistance from both private and public sectors. Notably the FCO who’d informed me 2 years ago that they and DFiD has been fully aware of our work in international development, which we value at $5 million to-date in both invested time and intellectual property which has already shown significant impact.

    We’re in no mood to be sidelined now by government funded efforts where we are clearly unwelcome in the territory where we are the experts and they have no experience. We’ve endured and overcome far too much for scraps.

    Government both local and national has to get it through their skulls that social enterprise, ethical business serving community, cannot be founded on personal and political dishonesty. They are not only taking the food from our table but alos from the mouths of those most vulnerable of children which our mission is focussed on.

    So now the grant funded pyramid of social enterprise has collapsed and everyone wants us. Except they don’t want us, they want to take ownership of the ideas and models, and shutting us out from the conversation is most helpful in that regard.

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    • elisicia

      Interesting response Jeff and in my experience there is a lot of ‘talk’ about working with social enterprise from the public sector but not a lot of action. Just recently I completed an expression of interest form with a large consortium who lead on delivering the Work Programme. They say they want to liaise and work with social enterprise but by the very nature of the forms and applications that are required to complete exclude small social enterprises like myself…….disappointing!

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  3. beanbagsandbullsh1t

    Well, Jeff, it might just be that your comments are a bit too long and the Guardian want other people to have a chance to have their say.

    My experience of pitching my exciting ideas to people is that some people like the ideas, like my organisation and can see a productive way of working with us (from both our points of view), some like us and our ideas but can’t find a practical way to work with us, and others aren’t really interested.

    As long as you’ve got some people to work with and you’re achieving some positive change, I don’t think the fact that some people aren’t interested is worth worrying about too much.

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  4. elisicia

    Well, in the specific example I gave it was for delivery partnership within a consortium, and in that case (perhaps it can be argued in every case) the process should be succinct and concise. One of the proposed forms was 7 pages, which may not seem like a lot but when you are a small enterprise with each staff person (and in my my case that is two people) wearing multiple hats, it takes a rather long time to complete.
    But more importantly a template that does not exclude small enterprises by asking such questions such as, i.e. ‘what are your customer volumes both nationally and regionally’.
    Specifically in this example where I am well aware that I am too small to be applying for large contracts that the consortium leaders make the application process, simple and time efficient. Perhaps there isn’t the time, but a site visit to see the who, what, why, where and how of our work would be superb!

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  5. We have similar experiences elisica, it seems.

    In light of the recent progress of the Public Services Bill I reflected on something within our proposal for generating a £100 million social enterprise fund.

    “Traditional capitalism is an insufficient economic model allowing monetary outcomes as the bottom line with little regard to social needs. Bottom line must be taken one step further… by at least some companies, past profit, to people. How profits are used is equally as important as creation of profits. Where profits can be brought to bear by willing individuals and companies to social benefit, so much the better. Moreover, this activity must be recognized and supported at government policy level as a badly needed, essential, and entirely legitimate enterprise activity”

    Two years later we’d put that social fund idea into the context of an international development proposal directed at US government and today, the US has a social enterprise innovation fund with the State Department now endorsing social enterprise as mainstream international development policy.

    Today the Guardian Social Enterprise network has an article relating the absence of funding for social enterprise. I can’t reply and nobody else it seems, cares to.

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