How do you balance your social and commercial aims?

I’m sure I’m not the only social entrepreneur who’s a bit bored of being asked variations on the question ‘how do you balance your social and commercial aims?’ So bored, in fact, that I may soon reach the point where I resort to the answer ‘on the end of my nose at an angle of between 60 and 80 degrees depending on wind speed’.

The question in its various forms is based on an assumption that is fundamentally incorrect – the assumption that social enterprises that are commercially unsuccessful are unsuccessful because, in their day-to-day approach to business, they prioritise social aims over commercial aims, and successful social enterprises are successful for the opposite reason.

It’s an assumption that some at the more charity-oriented and of the social enterprise spectrum trade on to add sparkle to their halos and that some at the more social business end of spectrum trade on during bouts of macho posturing about how real businesses never need grants.

It’s an incorrect assumption because most social entrepreneurs who stick at for a reasonable period of time do so on the basis that they want to get things done. The current poll on Guardian Social Enterprise Network frames the old social vs. business question in a useful way. It asks: ‘How would you rather be perceived – as a great social enterprise, or as an excellent provider of goods or services?

Obviously most social enterprises aspire to both but it’s a question about emphasis and, for me, the answer is ‘I’d like us to be perceived in whichever way is more likely to persuade a customer to buy our goods or services’. If someone wants to pay us £20,000 for a piece of work purely on the basis that we’ll do a good job, I’m not going to be losing a lot of sleep over whether they understand our core values in the way that I’d like, if someone wants to pay us £20,000 to do a piece of work on the grounds that society as a whole will benefit more from us doing it than someone else, that’s fine too.

What’s important is that someone wants to pay us some money to do something. In my experience, social enterprises are very rarely commercially unsuccessful because they’ve prioritised social aims, or being a good social enterprise, over commercial aims in terms of their day-to-day decision-making.

Aside from the usual problems that affects conventional businesses, the additional one that’s more likely to affect social enterprises is setting out to do something that’s phenomenally difficult to do and that has no prospect of generating serious financial rewards even if successful. At Social Spider, we launched a mass circulation national magazine in a non-existent despite having no money. Our additional social enterprise challenge was that the magazine, One in Four, is written by and for people with mental health difficulties.

For me, social enterprise is all about pragmatism but not at all about compromise. The sensible commercial decision for One in Four magazine, as with many social enterprise ventures, would’ve been to not do it. Since we launched the magazine, in 2008, the socially entrepreneurial challenge has been to keep the magazine going. That’s the social aim and the commercial aim, and it’s been achieved both by being seen as a good social enterprise and by being seen to provide a good service (one or other factor being more important to people in charge of different potential sources of income).

It would be wonderful to be able to blame some of our most embarrassing business mistakes over the last three years on the depth of our social consciences but it would obviously be utter nonsense. The aspiration for social enterprises is to deliver social change through a sustainable business and we can’t do one without the other.

 

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One response to “How do you balance your social and commercial aims?

  1. On this, our views have been very clear David, from the beginning in our white paper which concludes that it’s about being a sustainable business which uses profit to invest in community and social objectives. The business exists for a primary social purpose, i.e.

    “Clearly, profits can be used very effectively in ways other than traditional investment and profit outcomes. Moreover, this is not charity, it is business–good business.”

    The argument had been that traditional capitalism, was an insufficient paradigm, as evidenced by more than a billion who go hungry – effectively disenfranchised and discarded.

    Perhaps most prominent case for this was the strategy plan we made public in 2004, which set out the need for enterprise to be sustainable before profit could be deployed for social outcomes.

    http://en.for-ua.com/analytics/2007/08/09/110003.html

    In practice however, the commercial operation battled to survive. One of the greatest obstacles being a furious campaign to paint us as a business exploiting humanitarian causes, for profit. I knew this had deterred potential customers, who would not admit it. .

    In the end, our social objectives overwhelmed the ability of the business to support them. In their own right, these, like many social projects needed seed funding to get started. Our founder placed the social cause ahead of his own health needs and died. He left behind some inconvenient truths about government funding. :

    http://tinyurl.com/3ehs5mq.

    Just two days ago I read in an article by the director of USAID, that they needed to ’embrace enlightened capitalism’ rather than seeing business as just another funding source. Clearly our example contradicts this intention

    I hope that as a social enterprise, we’re perceived for our impact in spite of all adversity.

    Like

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