Rise (winds) up

In most cases, if a husband filing for divorce followed up that action by asking his wife whether she’d be happy to hand over the family home to his mistress, it wouldn’t go down too well. Bearing that in mind, it’s probably not especially surprising that (according to reports on Social Enterprise) members of Rise, the soon to be disbanded social enterprise umbrella body for the south west of England, have voted against transferring the organisation’s remaining assets to controversial accreditation scheme, the Social Enterprise Mark.

It’s quite possible that some of the members may now question whether Rise should have devoted less of its energies to developing the Mark, and more to developing social enterprise in the South West – in which case, those social enterprises might now be in a position to afford to support an umbrella body.

Clearly, though, Rise’s demise points to a wider problem in terms of regional support – the government was paying for it and is now not paying for it. Explaining the decision to close the organisation, Rise Chair, Andrew North said: “It is with great sadness that the Rise board of directors has been tasked with the closure of Rise, but with the demise of the South West RDA and a lack of government support for social enterprises, there is no other alternative. We hope that the network of south-west social enterprises, which Rise has been instrumental in growing, will continue to thrive.

While making clear – as I originally did over a year ago – that I believe (a) that the government’s claim to want an increase in social enterprise activity while failing to ensure the availability of specialist support lacks credibility and (b) that regional support organisations such as Rise provide an important service (the value of which may not be fully recognised until it’s not there), I do think there are number of important questions raised by the closure of Rise.

A report on the Civil Society website expands on the reasoning behind Rise’s decision: “Last year the government decided that all RDAs across England would close by March 2012. As a result the board of Rise has decided to dissolve, as there is no prospect of future business or direct funding. Rise’s most recent accounts show it has a healthy balance sheet with £389,744 in reserves, and a net asset value of £30,582.

It would be interesting to hear the thoughts of social entrepreneurs in the South West on Rise choosing to disband with a reasonable amount of money in the bank. As I understand it, there are other regional social enterprise bodies that run without any full time members of staff and I would be keen to know why Rise decided that it wasn’t worth investing some of their remaining assets in trying to establish a smaller, more sustainable operation.

It would be equally interesting to hear why Rise has taken the judgment that there is no prospect of sustaining their work through selling services to members. This amplifies a wider issue at the heart of the social enterprise support industry – I am not in any way implying that Rise, its staff or board members are either primarily or uniquely culpable – based on a culture of ‘do as I say, not as I do’.

Those of us who’ve cumulatively spent several days of our lives on the receiving end of earnest lectures from social enterprise leaders on the evils of grants and state funding – and the need to be a real business that sustains itself through trading – could be forgiven for wondering whether some of those same leaders could reasonably be expected to have a few entrepreneurial tricks up their sleeve beyond bemoaning the fact that the government is no longer giving them any money (part of which would be spent going round telling people to stop asking the government for money).

Four people are losing their jobs as result of Rise’s closure and many social enterprises will now not get the support they need. Those are bad things. One good thing that could happen as a result of the challenge faced by the social enterprise support sector would be a re-evaluation of the messages that organisations supporting social enterprise are putting out. There are activities that are socially valuable that can’t be funded (entirely) through trading activities. Ironically, this apparently includes helping people to do social enterprise. That’s nothing to be ashamed of but now might be the time to ditch the bluster, admit reality and have a serious think about how we can get stuff done.

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20 Comments

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20 responses to “Rise (winds) up

  1. I’ve been wondering what will happen to the ownership of the Social Enterprise Mark CIC now – and if there’s an opportunity to hand ownership of the SEM CIC over to Mark holders – ie make it a membership organisation or marketing co-op?
    SEC withdrew from the SEM CIC only a few months ago, leaving it, as I understand it, wholly owned by RISE. Now RISE is to wind up, with the proposal to transfer its remaining assets to the SEM CIC.
    Now I know that these assets have a significant value – thanks David – I have to admit the cynic in me is raising some questions about this sequence of restructurings that take me a long way away from where I’d like social enterprise to be.
    It looks like the RISE membership has rejected the proposal to fund the Social Enterprise Mark instead of social enterprise in the region (although my cynical side still wouldn’t be surprised if a lot of the value goes the way originally intended in the end). But the question of the future ownership of the SEM CIC remains, doesn’t it?

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  2. How ironic David. It was 7 years ago that I approach SWRDA with our sustainable social enterprise model and a business plan. I was told they’d get back to me if it was seen to ‘fit’ with their development strategy.

    http://forestofdean.socialgo.com/magazine/read/broadband-funding-may-be-illegal-_12.html

    When I became aware of RISE-SW in 2006, I contacted them too with much the same information. There was no response at all until my 3rd attempt in 2009.when they were ‘too busy’ with the SE Mark to engage with me. I had a similar experience with the SEC when I joined in 2006 describing our preceding success in micro economic development.. I learned that what we were doing was “beyond the focus of their work”

    http://socialbusiness.socialgo.com/magazine/read/joining-the-sec_159.html

    Four people may have lost their jobs, but just imagine how many didn’t get to start one because of a support infrastructure more focussed on defining itself as leaders. Public money was being spent to prevent social enterprise and when the gravy train hits the buffers, they disembark.

    What a joke our political leaders who advocated social enterprise turned out to be. Tony Blair and Lord Mandelson showing up where we work in Ukraine, not to support social enterprise us but to get close to two of Ukraine’s leading moguls. Then there’s Red Tory Philip Blond raiding the coffers of his ‘capitalism that works for all’ think tank to splash out on an Ukrainian woman. His interpretation of a social business, maybe?

    It has the makings of a good script – for the social enterprise panto this Christmas.

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  3. Beanbags admin

    @Geof Yes, there’s definitely some questions over what the new ownership structure for the Mark Company will be. As I understand it, it’s currently a CIC Limited-by-shares so presumably those shares will have to be sold or given to an organisation or some people, or an entirely new company (possibly a CIC Limited by Guarantee) set up. I would think that, technically at least, that’s a decision for the membership of Rise too.

    @Jeff I think it’s important to remember that most people working in social enterprise support in recent years have worked very hard, earning relatively low salaries while attempting to define and take forward a practise that – in the form we know it now – is relatively new and untested. So I think your criticism (and mine) needs to understood in that context. I think you’re right, though, that politicians often have agendas for social enterprise that don’t necessarily match those of social entrepreneurs and we need to be vary wary of signing up to a vision of social enterprise that responds to political considerations rather than either social need or market demand.

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  4. @David, I know all too well what it’s like to work for low income to define and take forward a new way of doing things. in the last couple of years, for me, this was no income while all efforts focussed on bringing a proven approach up to national scale.
    To do that we’d faced obstacles from oligarchs, our own government and someone determined to undermine us with an anonymous defamation campaign. Both fought through chronic illness, I overcame leukaemia, my colleague was not so fortunate. I had the benefit of the NHS, for him treatment at $10,000 a session was simply not viable. We were very much on our own, save the odd comment that ‘there’s some bad stuff about you on the web’.

    On the other hand there were some very well heeled organisations showing up alongside us and they had no qualms about using our work and pushing us aside. We were easy to dismiss as a tiny social enterprise. .
    Some of this has appeared more recently, .in the form of the EU consultation on social business.which will determine toe approach for deploying 90 million euros. They overlooked one thing however, in that the complete work from which these proposals seem to derive was offered
    to the EU in an earlier consultation 3 years ago.

    http://www.european-citizens-consultations.eu/uk/proposal/2012

    So there you have it. Public funding competes with and undermines social business and in doing so brushes some extremely vulnerable children and an aids epidemic under the carpet.

    To me that’s more like crime than social enterprise.

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  5. Hi! I’ve written about this from a RISE member’s point of view in a (now twice-updated) post on our blog http://www.news.software.coop/rise-faces-demutualisation-threat-at-egm/1188/ and in comments on other websites like http://www.guardian.co.uk/social-enterprise-network/2011/nov/09/rise-collapse-fragile-support-government

    As you’ll see, I do question what the leaders of the RISE co-op were doing and whether there was a conflict of interest between leading RISE and supporting the SEM.

    I’d also love to know how the Civil Society website has got a copy of RISE’s most recent accounts when my requests for those accounts have been ignored for 10 days now. Nothing like member services, eh? Unsurprisingly, this is hindering our attempt to propose alternative resolutions for distributing the assets.

    I agree that RISE should have converted to a smaller sustainable operation, including selling services to members, but I feel that RISE has not been interested in consulting non-SEM members for a while now. Sadly, we did lose the first vote and so RISE must dissolve.

    It’s very sad that four people lose their jobs, but it’s not quite as bleak for social enterprises as you suggest. RISE was rarely much direct help to us in recent years. Social Enterprises can still get the support that they need because http://www.co-operative.coop/enterprisehub/, its local delivery partners and other local enterprise agencies all survive. Ironically, the SW support provider to close recently was the RISE-linked Co-active (the RISE CEO / SEM MD used to be Co-active’s Chief Exec).

    Anyway, the co-operative enterprise hub is funded by the trading activities of the co-operative group shops and banks, so if you’d like to help fund it, buy co-op!

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  6. Beanbags admin

    So, just to be clear on this, are you saying that the membership was asked to vote on the distribution of the assets but wasn’t told the value of the assets? That seems strange.

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  7. It seemed strange to me too! It wasn’t in the EGM notice and it’s not in this week’s postal vote announcement. There was no balance sheet in the annual report given out at the conference. I asked for the full accounts mentioned in the report and told that there were no copies there. I’ve asked for them by email twice since then. I was told verbally during the EGM debate, that there would be £112,000 left after RISE closed, but not how they arrived at that figure.

    Of course, if members knew the current situation, we might be able to produce a better alternative which doesn’t let all the RISE leaders who also have interests in the SEM keep all our co-op’s money.

    I really agree with you on the “do as I say, not as I do” bit: RISE has offered us no education about membership or RISE’s operations or services since we joined in 2009, nor produced a measurable social report in any of the three reporting periods we’ve seen.

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  8. Beanbags admin

    Unfortunately, this characterises the approach of the Mark project throughout it’s short existence so far. It’s perfectly legitimate for the Rise board to put forward a business case for why supporting SEMCo is a good use of Rise’s assets and attempting to continue Rise is not. The problem is what appears to be happening here is that Rise members are being asked to vote for that option out of a sense of duty.

    This is part of the reason why the Mark project hasn’t been successful in a general sense. I personally think it’s a flawed concept but I don’t think that’s necessarily a view shared by most people in the social enterprise movement. I think there’s a lot of people running social enterprises who would have been (and may still be) happy to sign-up to the Mark if presented with a clear business case for doing so. The key question that needs to be answered (ideally prominently on the front page) on the Mark website is ‘how will the Mark enable my business to sell more stuff?’

    The only argument on the Mark website nearly two years into the national roll out is, roughly speaking, that Mark holders can tell people they’re a social enterprise and that will help them sell more stuff because people like social enterprises. Social enterprises can tell people they’re a social enterprise anyway – in most cases referring to the organisation’s structure – without going through the Mark’s certification process.

    What extra value does Mark offer to social enterprises? Will SEMCo attempt to promote the idea of social enterprise supporting councils, in the way that there are fairtrade councils? Will SEMCo attempt to build a network of customers interested in buying social enterprise products in the way that Wedgecard has tried to in terms of small businesses? There is still a case for the Mark waiting to be made but recent developments don’t suggest SEMCo is any closer to actively making it.

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  9. Yes, I agree: I think there’s much more value in explaining how something is a social enterprise than there is in buying the SEM. The case for the SEM in particular is unproven. Most claims made in support of it apply equally to explaining oneselves autonomously. Given that I feel the SEM criteria contain irrelevant aspects, maybe they even apply more to demonstrating it yourself?

    SEM usually promotes itself as “The” certification and I understand it does lobby councils. This is a danger to the wider movement IMO.

    Finally, a correction to my earlier message: I was told today by someone I trust that Lucy Findlay’s Linked In page is incorrect and she was never Chief Exec of Co-active. Searching the web suggests that may be true, but I don’t know how one accidentally puts that sort of thing on one’s CV or Linked In page!

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  10. I’ve commented elsewhere about RISE’s leaf logo turning from a healthy green to a dead grey this year, but something’s just occurred to me about that: why did RISE buy a rebrand and new website when the grant was running out in less than 12 months and they didn’t know how the business would continue?

    The more I look, the more of these questions I find. Are the other regional social enterprise bodies better on these things, or will we see this repeated elsewhere and grants dry up?

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  11. Beanbags admin

    I think we’ll see most of the English regions either being absorbed by Social Enterprise UK or going the same way as Rise.

    As London has an elected regional government, the failure to maintain regional funding is particularly ridiculous but Social Enterprise London has had a consultancy arm for several years and is – for the foreseeable future – able to maintain a good but much reduced service funded by that, grants for specific bits of work and corporate partnerships.

    In most cases, though, I don’t think people used to, and structures designed for, delivering social enterprise support funded primarily through Regional Development Agencies will be able to switch to a different model. That’s not to say that new people and structures won’t emerge to do things differently.

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  12. MJ asks: ‘why did RISE buy a rebrand and a new website’ from the design social enterprise COSMIC a few months before the decision to close. I have no idea but thought this was of interest: (from staff section of RISE website):

    Julie Harris – Executive Director julie@riseforsocent.org.uk

    Julie is Executive Director at rise, previously having been the Chair of the organisation since May 2006. Julie has played a key regional role in recent years helping to develop many of the regional partnerships which have included rise as both policy and delivery partner in a number of initiatives. Julie is also Chief Executive at Cosmic, a social enterprise based in Devon and is a member of the Social Enterprise Mark Co board.

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  13. Pingback: Considering the need for regional support | Beanbags and Bullsh!t

  14. Rory Ridley Duff is due to start the second phase of his research on this subject, judging by the things that are slowly coming out it will be an interesting read when completed. How the social enterprise community deal with this will say a lot about us, my own view is the pile is just too big to sweep under the carpet and has been for two years at least.

    I got tangled up in all this back in 2007/8, and have learned enough to know that the naive goodwill shown by the social enterprise community has been abused somewhat.

    SEUKs decision to transfer their shares of the SemCo CIC to Rise instead of directly back to SemCo is curious? Why?
    One of the first decisions P Holbrook made as CEO of SEC (now SEUK) was to redirect funds from the social ambassadors program to invest £200k of taxpayer funds into the Mark Co two years ago.

    Just as an aside if he had decided to give the shares back to SemCo CIC direct it would have had to have CIC Regulator approval and disclosure.

    I think it vital someone gets hold of this as it is bringing social enterprise into disrepute, does anyone have any links to statements Peter has made on the subject?

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    • I don’t think there are any statements from SE UK since the transfer. I asked for their view and was directed back to RISE. Did you mean ones from before the transfer?

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  15. In response to the comments from John Mulkerrin the Social Enterprise Mark Company was a joint venture between two companies. Social Enterprise UK transferred its shares to the other shareholder. There’s more detail on this in the press release we put out at the time – http://www.socialenterprise.org.uk/news/social-enterprise-mark-company-ownership-changes-announced.

    More importantly there is no truth in the statement that money was diverted from the Social Enterprise Ambassador scheme into the Mark company.

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  16. Thanks Celia

    I find it hard to understand why Peter would tell me that when we met previously if it indeed isnt correct, where did the money come from?

    Admittedly Peter and myself were in a heated debate about what would be a better investment for social enterprise in the medium term, I said it was unfair that we werent being given a chance to compete for the money and to at least make the case for some work on CICs. Peter said it wasnt new money so wouldnt be going through an open application process, when I asked where it came from he said it was being diverted from the ambassadors program. Happy to correct on your clarification, but it burns pretty clear in my memory as it was pretty much the only shot we had for support back then and I remember the meeting with huge disappointment.

    Thanks for the link to the press announcement, it doesnt mention whether Rise paid for the transfer of shares from SEUK or received them for free, can you let me know how much they paid if anything?

    Just to help clarify things, can you confirm it was £200k originally invested.

    Thanks

    John

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  17. Hi John
    the funding for both ambassadors and Social Enterprise Mark Company came from the Office for the Third Sector. The Social Enterprise Coalition didn’t make any decisions about diverting funds between one and the other, nor do we believe did Office for the Third Sector. They were two standalone programmes. The initial investment from the Office for the Third Sector in the Social Enterprise Mark Co via The Social Enterprise Coalition was £150K. We sold our shares back to RISE for a nominal sum.

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  18. Thanks Celia

    Was there an evaluation conducted by OTS or SEUK (then SEC) prior to the £150k being invested which discussed the financial viability of the Mark and its business plan?

    John

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  19. Pingback: Out with the old, in with the new | Beanbags and Bullsh!t

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