We are on the brink of a new era, if only…

Anyone who was hoping the 2012 was going to be the year when we finally forgot about the social enterprise definition debate has, unfortunately, only had seven days of hope before their expectations were cruelly dashed.

The first contribution (at least the first one I’ve read) on the matter this year comes on the Guardian Social Enterprise site where Declan Jones contributes a piece on ‘The Trouble With Not Defining Social Enterprise’.

Jones definitely succeeds in succinctly explaining a widely perceived problem: “Avoiding definition has also allowed social enterprise to be co-opted by others. We now witness public sector municipalists and private sector opportunists masquerading as social entrepreneurs. The former are zealous mini-state status quo defenders. The latter want to make money on their investments. Neither group are social entrepreneurs but both are nifty and inventive when it comes to using charitable, trust and social enterprise business structures and models when it suits them.

I share Jones’s view that if a council hives off its leisure services into a not-for-profit company and fills the board of that company with either local councillors or council employees, the entity that’s been created is not what I’d consider to be a social enterprise – for me, it’s a vehicle for wielding power without taking democratic responsibility.

I don’t share Jones’s view that the involvement of people who want to make money from their investments, in itself, prevents companies from being social enterprises but I would agree that it’s not helpful if the term social enterprise is used to refer to conventional private companies operating in a social sector, such as A4E.

What Jones doesn’t manage to do in his article, at least in a way that I can make out, is explain how these problems would be solved by a new definition of social enterprise.

The Social Enterprise Mark, an attempt to create an opt-in definition of ‘a social enterprise’ permitting a wide range of organisational structures, has not been successful. After two years of trading, the company is still some way from signing up 1% of organisations who self-define as social enterprises.

If a once and for all definition was worthwhile, one way would be to create a company structure – or series of structures – unambiguously called ‘social enterprise’. The then new Labour government could’ve done that when it launched Community Interest Companies but chose not to.

Another similar but slightly different option would be to create a form of registration along the lines of registered charity – registered social enterprise – whereby organisations could be registered as social enterprises on the basis of fulfilling particular structural and reporting criteria, and be regulated by a ‘social enterprise commission’, the equivalent of the Charity Commission.

Neither of these options is likely to be pursued in the near future but even if they were – and therefore all organisations were definitely either ‘a social enterprise’ or something else –  this wouldn’t stop council’s managing services through ‘not-for-profit companies’ rather than ‘social enterprises’. And while The Guardian and politicians have called A4E a social enterprise, it describes itself as ‘a social purpose company’ –  a definition of ‘a social enterprise’ wouldn’t prevent that (even if it were desirable to do so).

Aside from perceived badness that clear definition wouldn’t stop, I’m not clear on the benefits it would bring about. At the beginning of his article, before arguing for definition of social enterprise, Jones claims that: “Some social entrepreneurs eschew defining social enterprise because it is too awkward and troublesome. They prefer ambiguity and complexity because inclusion is seen as more important than differentiation.

That may be true for some people but it’s not my position. I don’t have a problem with definition that’s awkward and troublesome if it’s useful. It’s extremely important, for example, that running a hospital is clearly defined and regulated activity.

In terms of ambiguity and complexity in the social enterprise movement, I neither support nor oppose it but I recognise it as an inescapable reality. The previous government actively chose to chuck together loads of different businesslike approaches to social change under the banner of social enterprise. That may or may not have been a good idea but the result is that there is a wide spectrum of people in the UK who regard themselves as running, working for or buying stuff from social enterprises.

The definition debate will run and run. In my view, charters, kitemarks and accreditation can and should have a role in the social enterprise movement and individual social enterprises promoting themselves and their goods and services to customers, but a once and for all definition of ‘a social enterprise’ shouldn’t and probably won’t.

Some in the movement wish that we could stop talking about this issue. That won’t happen and I think it’s useful to have ongoing debate about what we’re doing and why. What we do need to do is ditch the believe that there’s some form of definition out there that would – in itself – transform our abilities to promote better ways of doing business.



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2 responses to “We are on the brink of a new era, if only…

  1. David, as an illustration of the problem, there’s my efforts to engage with the local council. The main topic of a meeting last year was social enterprise, a healthcare SET in which councillors involved had dipped into council tax funds to pay a consultant. As I recall the charges included a bill of around £8k to register the CIC which never traded.while totting up around £200k in consultancy fees. The consultant unknown to anyone in social enterprise circles had been a former director of a private healthcare business. It offered me the opportunity to raise a question of my own, having more than once offered my help, gratis.


    In spite of what was said, it happened again and more recently I discovered a spin out quango had been publicly funded to offer similar services to our own. That could not happen if it were something like a community shop where a village shop already existed,

    I’m now on the brink of filing a complaint of malpractice with the LG ombudsman.


  2. Pingback: 13th January: Transition Institute's Weekly Roundup!

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