Opportunities? Knocks?

Social entrepreneurs have different approaches to the voluntary sector. Having started my working life at a socially enterprising charity, I’ve always been keen for my organisation to play a positive role in the local voluntary sector and I have recently became a trustee of our local CVS, Voluntary Action Waltham Forest (the views expressed here are entirely my own).

It’s never been especially easy to turn up at voluntary sector meetings and tell people that you run a social enterprise. The view from many (obviously not all) staff members and volunteers that run voluntary sector organisations is that the notion of social enterprise is (at least implicitly) a rejection of the work they do and they way they do it. Sometimes social entrepreneurs’ enthusiasm for positive change leads them to encourage this view. Now, as we prepare for swingeing cuts to take effect, we find ourselves ever more uncomfortably stuck between rocks and hard places.

The UK social enterprise sector is heavily reliant on public sector funding. Latest available figures estimate that 49% of social enterprises receive 50% or more their income from the state but clearly there’s likely to be quite a few more who get a lower percentage of total income from state funding but still rely on that income to be economically viable. This income is a mixture of grants and contracts but, whichever way it’s sliced and diced, we’re at least as vulnerable as everyone else to overall cuts in council and NHS budgets. However, we face the added challenge (or opportunity) of being touted as the solution to cuts in spending.

At recent voluntary sector meetings I’ve attended, suggestions that the current climate provides opportunities for social enterprise and social enterprising approaches have frequently been met with the retort that ‘it’s all very well to talk about social enterprise but what about those small organisations that have lost their funding and are about to go bust’. Those who attend these gatherings regularly won’t be surprised by the apparent disconnect between the two bits of discussion – it’s not one or other but that’s how it seems to many people.

Of course, the reality is that plenty of small community groups who’ve either never heard of social enterprise or wouldn’t chose to brand themselves in that way have been getting on with doing socially enterprising work in local communities without either public funding or grant funding for many years. In my spare time, I help to run a small community arts venue in Kentish Town, north London. It’s an entirely volunteer-run operation which hosts over 100 arts events and workshops a year – guests this year include the Scottish poet laureate, Liz Lochhead – with between 2000 and 3000 attendances (this obviously includes the same people attending on more than once). It currently receives no public funding whatsoever and the ongoing challenge is whether we can continue to receive exemption from business rates. If you don’t count the donations in kind of volunteer time, around 80% of the income comes from what the social enterprise lobby would call trading, and the rest comes from donations.

But the ‘social enterprise blah, blah, blah’ voices in the voluntary sector do have a point. Some may just be resistant to change but others are angry because they understand that social enterprise is not alchemy. Whether the state, the voluntary sector or a social enterprise is doing the delivering, that doesn’t alter the fact that if money that previously was there to pay people to do a job and/or support volunteers is now not there, that activity is probably going to stop happening.

Social enterprises or socially enterprising approaches might help us find better ways of making use of resources but they’re unlikely to solve the problem of absence of resources. Disadvantaged people are not suddenly going to be able to pay for services that they previously received for free on the basis that they couldn’t afford to pay for them.

Last week’s funding awards to Office for Civil Society (OCS) strategic partners aren’t going to have much direct impact at a local level. The strategic partners are funded to engage with the OCS on national policy not to deliver local support, let alone local services, but the fact that the social enterprise sector has done spectacularly well – 3 of the remaining 9 funded partnerships (cut from 45) are focused on primarily on social enterprise support – when compared to other branches of civil society suggests that the government really does believe social enterprise will play a key role in tackling the challenges of the next few years.

Broadly speaking, that’s something we should be pleased about but it’s vitally important that social enterprise leaders use their position of influence to successfully challenge the view that social enterprises and social entrepreneurs operate in an alternative economic reality from everyone else.

The current climate does present lots of opportunities for those social enterprises and social entrepreneurs focused on public service delivery and community action to develop ways of working with local people to do things better but doing that successfully means that, while we might sometimes have different approaches, we’ll need to work alongside partners in the voluntary sector to face the challenges of lack of resources and undiminished demand.


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3 responses to “Opportunities? Knocks?

  1. What we’re seeing David, can perhaps be interpreted as a consequence of stretching a term, social enterprise, to embrace a wide variety of social purpose. In the Ashoka concept, where the concept of a social entrepreneur was pioneered this would typically take the form of a foundation funded fellowship to apply income generating strategies to tackle social problems. UK government implemented their perception – largely grant and NGO based with partial revenue from trading activity.

    I’ve come from the other end of the spectrum. what we describe a profit-for-purpose business which invests in social outcomes while being self-sustaining. Our advocacy going back to 1996 and subsequent practice was to create a mechanism for onward investment to create both ‘social enterprise’ and conventional micro business through CDFIs. It was something which re-surfaced just last week under a new label of ‘revolving funding’.

    Our experience of the sector has been one of continually being blocked, our projects hijacked. It now reaches the point at which we’re obliged to challenge government over 12 man years of our efforts.

    It’s turned into a tragic dog eat dog competition in counterpoint to the continual rhetoric of sharing and collaboration. As a consequence we are replete with experts and consultants, but with the exception of a few showcases, sustainable social enterprise is thin on the ground and may well be a threat to the grant funded hierarchy which seems to have evolved.

    What on earth does it take to persuade others that we’re approaching a meltdown and have to work together?


  2. Alisdair Cameron

    @ Jeff

    What on earth does it take to persuade others that we’re approaching a meltdown and have to work together?

    i) A government (and the last one was culpable too) that doesn’t misappropriate the term social enterprise and also ministers who realise that simply uttering the term doesn’t make money magically appear.
    ii) A greater number of social enterprises that do and deliver things/services, rather than operate as advice shops (often advising on how to become an SE, in a weird “Russian doll” type style).
    iii) A lessening of the wilder excesses of the most fervent evangelists for SE. To date, some have estranged the VCS quite badly, yet these are the very folk with whom they should be making common ground.
    iv) An awareness of the dangers of getting to close with Govt (any Govt) and being co-opted to toxic, short-termist brands (like the “Big Society”).
    v) A positioning of SE to distance itself from the much-hated privileges (and abuses thereof) of corporatism and turbo-capitalism: there is a difference between being professional and aping the manners and methods of the large multinationals.

    Loads more, but time ticks on…


  3. beanbagsandbullsh1t

    There’s several blog posts worth of good points there. On point (ii) it will be interesting to see how the social enterprise support industry gets on post-April 1st.

    Some support organisations do really valuable work. I’ve found support from SSE and SEL (our regional social enterprise support agency) particularly useful and I know many people who’ve worked with Unltd who’ve found their help (both in terms of funding and advice) very valuable too but I’ve often been at social enterprise events where it’s seemed that actual social entrepreneurs and social enterprises were outnumbered by (directly or indirectly state-funded) hangers-on.

    I think there are lots of social enterprises that do things, the problem is that – as with charities or community groups of a similar (usually very small) size – they’re often too busy doing things to spend much time engaging with other organisations.


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