More on meeting the corporates

Following on from the previous post, there was an interesting discussion on Twitter on Thursday between two tweeters whose views I respect a lot: Journalist, Claudia Cahalane (EthicalJourno) and social enterpreneur, Liam Black (LiamABlack).

What struck me about this discussion is that although it was clearly a robust exchange, I found myself partially agreeing with both tweeters.

The conversation went as follows:

“EthicalJourno – Should Deloitte, PwC, Santander, Lloyds and E&Y (missed any?) just be more socially enterprising themselves, rather give CSR money to socent
LiamABlack – ask us a hard one!
EthicalJourno – do #socent s really need biz support from people who make their money in often dubious ways?
LiamABlack – ffs can we move beyond these pathetic stereotypes please?”


Claudia is right for at least two reasons:

One is because however wealthy we are (or aren’t), we – both as individuals and organisations are all agents within the economic and social system. It matters who we give money to and who we take money from. I don’t think ‘making money in dubious ways’ necessarily affects the practical value of any support a company or its employees might give but it’s a two-way endorsement. Not only is the company (to some extent) endorsing the social enterprise but the social enterprise is also (to some extent) endorsing the company.

I’m personally pragmatic about this. Our team has received – very helpful – mentoring through Business in the Community from an employee of Capita and also from an employee of PwC through the School for Social Entrepreneurs. That doesn’t mean that Social Spider necessarily supports public sector administration being outsourced to companies like Capita, or necessarily believes that the public sector is improved by the commissioning consultancy services from PwC and their colleagues – or that we actively support anything else they do – but I think it does signify that we don’t believe those companies to be specifically evil.

The point is not that our small social enterprise taking a principled decision not to receive pro-bono support from a large company would make any difference whatsoever to that company. It’s what it says about us a social enterprise. And what it says about is that – for better or worse – we are part of the current economic system and operate within it.


The second reason Claudia is right is in suggesting that any social impact delivered by corporate engagement with social enterprise is dwarfed by the social impact of their day-to-day operations. For example, UK unemployment now stands at 2.67 million, up from 813,000 in 2007.  A bank – I am not specifically referring to any bank that is currently running a social enterprise support programme – could clearly have a far more positive social impact by not pursuing approaches that are likely to result in economic collapse, than by putting £1 million (or even several £billion) into a scheme to support people made unemployed as result of that economic collapse to start social enterprises.

I don’t see that as argument for or against corporate support for social enterprise – hopefully banks and others can both support social enterprise and do business in a socially responsible way – but it’s a salutory reminder of its relative insignificance.

Where Liam is right, though, is that we do need to move beyond the stereotype – still popular with a minority in the social enterprise and voluntary sectors – that developing and selling goods and services to make a profit is fundamentally an attribute of the dark side. It isn’t.

Social enterprises in the UK do not currently carry the major burden of meeting people’s everyday needs or scaling-up social progress. They are not likely to in the near future. Within a market economy, mainstream businesses are vehicles for improving people’s social circumstances or making them worse (many make a contribution to both simultaneously). So while it’s important for us as social entrepreneurs to ask questions, the most important questions are about what needs to happen and how we can work with others to help to make that happen.
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14 Comments

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14 responses to “More on meeting the corporates

  1. I’ll admit to being torn in a similar way related to this debate. I too agree with both sides to an extent. I do not like the behaviour of some of the corporations that are currently offering support to social enterprise and I expect that is true for many people. The question is how we address that behaviour. Do we address it best by building relationships with these businesses or by not building relationships? In my earlier years I was very rebellious. It was the time of Thatcherism and I fiercely objected to the government. I didn’t march or go on demonstrations; I just worked outside of the system. I ended up a bit like a lone wolf. I had lots of wonderful theories about how the world should be, trouble was no one was actually hearing them. It was just me moaning all the time. Me being anti this and anti that. Then a time came when it all fell apart. I became homeless and knew I needed to take stock of my life and make some changes. Instead of changing the world by moaning about it I needed to change me, and my attitude to the world. It’s not only that I wasn’t effecting change with my old attitude I wasn’t making a contribution. I wasn’t in there doing anything, building anything. In that period of personal change I began to realise that I should try getting involved like everyone else and try ‘changing things from the inside’.

    Up to now it’s worked. I’m certainly happier and more fulfilled, I have effected change, not much change, but much more than I ever did before and I know that I’ve made a contribution to saving lives through my work in homelessness. So actually the lessons I’ve learned in life tell me that the best way to effect change is from the inside, not standing on the sidelines griping about the behaviour of others.

    That means yes, building relationships, it means persuading these corporations that there are better ways to do business. Ways that are not just better than the old ways but better business than the old ways. It will not happen overnight, it will take time. There are also inherent dangers in this approach. First of all when we accept support from bigger organisations there is a danger that we lose our identity and our beliefs, we compromise and become lost in and eventually a part of, the status quo.

    Social enterprise in entering these types of relationships need strong principles, we need to remember that we have something to give and that this cannot be simply a relationship of donor – recipient, with us as the recipients. That’s what charities do. The world is changing and business is changing with it. Many in the social enterprise movement like Jeff and his business partner Terry from P-CED who we sadly lost recently, have been at the vanguard of this change and at times go unrecognised for it. We need to remember these people and we need to honour them if we are to develop and maintain a fairer and cleaner way of doing business. Perhaps we shouldn’t be continuously arguing about what actually constitutes a social enterprise based on how much money we give away or reinvest in our various social and environmental causes but rather be building a set of principles that define this ‘better way’ of doing business. Our values and our principles are our identity and concern and anxiety about developing relationships with larger corporations becomes crippling only when we don’t know who we truly are.

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  2. Thanks Martin, for acknowledging Terry’s efforts.. In December 2010 one of the corporates David mentions above, PwC, were contacted about their role in collaborating with USAID, Erste Bank and the British Council who had each been approached for support with out proposals to create a social enterprise initiative in Ukraine. This is what he sent PwC and forwarded to me:

    htttp://www.box.com/s/prn0zp4nx33ghkberhv4

    Four years ago, In February 2008 he’d called on the Senate Committee on Foreign Relations for their support. At that time the committee was chaired by Joe Biden and had Barack Obama as a member. We were being stonewalled by USAID over an application for small grant funding and he decided to escalate. From the application in November, it took until April for them to respond:

    http://www.ecademy.com/node.php?id=174517

    Without compensation for his work, he died unable to fund his own medical treatment. We were in the way, I have no doubt, of government kowtowing to the demands of powerful moguls, which brushed us and thousands of vulnerable children under the carpet.

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    • You’re welcome Jeff. When I look at some of those images of kids and think about his efforts and yours I have no doubt at all what a social enterprise is! The motivation and intent are clear and i commend not only Terry but also you for that. In my view some of the ‘support bodies’ around social enterprise would do well to highlight your work to explain what social enterprise really is. Even if only as a way of combatting the awful hijacking of the whole concept by a government suspected by many of having the sole interest of using social enterprise as a vehicle to bring about back door privatisation of education and health in particular.

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  3. I ought not to have been surprised that we didn’t qualify as a Deloitte pioneer, but I was. We’d been operating the self-sustaining P-CED model since 1999 and had impact to show for it.

    We’d begun in the UK with a national scale proposal to stimulate local economies, using the Bencom model to invest surplus into CDFIs for seed funding. The work in Tomsk Russia had delivered proof of concept and subsequent replication. I offer an extract:

    http://www.ecademy.com/node.php?id=174452

    A few days ago David asked ‘what is social enterprise?’ This is a question my colleague Terry offered an answer to 4 years ago. At this time our proposal for a national scale initiative in Ukraine had been visible on the web for 6 months. Yunus had published ‘Creating a World Without Poverty’ and Bill Gates had prescribed ‘Creative Capitalism.. The point Terry made was that though conventional business and the information age had brought almost immeasurable social benefit, many still fell through the cracks. It turned out to be somewhat prescient:

    ‘The term “social enterprise” in the various but similar forms in which it is being used today — 2008 — refers to enterprises created specifically to help those people that traditional capitalism and for profit enterprise don’t address for the simple reason that poor or insufficiently affluent people haven’t enough money to be of concern or interest. Put another way, social enterprise aims specifically to help and assist people who fall through the cracks. Allowing that some people do not matter, as things are turning out, allows that other people do not matter and those cracks are widening to swallow up more and more people. Social enterprise is the first concerted effort in the Information Age to at least attempt to rectify that problem, if only because letting it get worse and worse threatens more and more of us. Growing numbers of people are coming to understand that “them” might equal “me.” Call it compassion, or call it enlightened and increasingly impassioned self-interest. Either way, we are all in this together, and we will each have to decide for ourselves what it means to ignore someone to death, or not.’

    The Guardian recently opened a new ‘hub’ on values-led business where you’ll find me trying to engage with those present who seemingly don’t want to know about any of this, that what they hypothesise over has already been actioned. .

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  4. Like everyone else, it seems, I too swither and turn on this one. I’m looking at some of the salaries and perks that executives accrue in some profit-making organisations that are called ‘social enterprises’ (especially in the charities field) and I’m troubled.
    Equally so, I read about some of the ‘philanthropic good work ’ done by some big corporate entity… and then I read about Government or industry regulators censuring the corporate entity for serious infringements of regulations, or for insider-dealing, or whatever.
    If we are to move on as Liam urges, that must entail a hard questioning and scrutiny of what organisations and their people say and assert about ‘doing social good’ – and then what they actually do, and do in the round.
    It’s true David when you say:
    “Where Liam is right, though, is that we do need to move beyond the stereotype – still popular with a minority in the social enterprise and voluntary sectors – that developing and selling goods and services to make a profit is fundamentally an attribute of the dark side. It isn’t.”
    But it does raise the ante for social enterprises – if they are into something ‘for the profit’, they have to also be ever more vigilant and be able to robustly demonstrate that this does not conflict with, and indeed does contribute to, social aims and outcomes in the form of social benefits. It also demands a more meaningful asset lock for social enterprises than the current proposals in England, to prevent the senior suits running off in the future with the profit gains.

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  5. Social enterprises existing for the benefit people who ‘fall through the cracks’ – sounds straightforward, and definitely an advance on ‘businesses with a social purpose’, since arguably all businesses have social purposes, even if we don’t sympathise with the particular ones they advance (e.g., consolidating the control of capital in the hands of a minority).

    Then how do social entrepreneurs – and social enterprise as a movement – respond, both practically and theoretically, in places and times when mainstream business is looking and behaving like one great crack-creating and crack-widening conspiracy? Also, what about people who set up businesses, not because they have fallen through the safety net in the usual sense, but because they’ve identified a need to create economic space for social activity or economic benefit which can’t be catered to by mainstream business? an example would be worker co-operatives – a form of socialised business ownership, control and outputs/outcomes – aimed at giving workers some autonomy in terms of their working conditions and the products of their work.

    I guess these are questions about the ambition and scope of social enterprise as a movement, i.e. a sector with the self-identified potential to add up to more than the sum of its individual businesses. In the UK, our ‘apex’ bodies (SEKL, SEUK, etc) only started to talk about themselves and us as a movement a few years ago, but I’m not sure we’re coherent enough yet to say very clearly what we intend by it.

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  6. Let me now offer some good news. An illustration that social impact can be made against seemingly impossible obstacles. This is the Children In Families initiative which I learned of only yesterday. The charity EveryChild have been awarded funding to place ‘at risk’ children in Ukraine into family homes. They had been recommended for this role in our 2006 strategy paper:, which had argued the case for a business approach where deployed to achieve social objectives.

    http://www.ecademy.com/node.php?id=174455

    In 1996, it had been put like this:

    ‘There is nothing wrong with individuals becoming wealthy. It is only when wealth begins to concentrate in the hands of a relative few at the expense of billions of others who are denied even a small share of finite wealth that trouble starts and physical, human suffering begins. It does not have to be this way. Massive greed and consequent massive human misery and suffering do not have to be accepted as a givens, unavoidable, intractable, irresolvable. Just changing the way business is done, if only by a few companies, can change the flow of wealth, ease and eliminate poverty, and leave us all with something better to worry about. Basic human needs such as food and shelter are fundamental human rights; there are more than enough resources available to go around–if we can just figure out how to share. It cannot be “Me first, mine first”; rather, “Me, too” is more the order of the day.’
    .
    Liam contributes regularly to Social Enterprise Magazine which was given our background story as a social impact report for the SE 100 index, sponsored by RBS.

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  7. Sion your comment sparked a thought for me. Perhaps there is not to be a future social enterprise ‘movement’. Perhaps it’s more likely that as the ‘field’ develops and matures there will be an array of sectors or sub-sectors – something like the manufacturing sector in which you can be in the old-time metal bashing sector or in something hugely different like the emerging digital fabrication manufacturing sector .
    That probability makes all the more important the need for distinct, transparent and robustly governed kite marks or other means by which specific types of enterprises can be readily understood and held to account – and again, of course, appropropriate and meaningful asset-locks where needed..

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  8. @Sion, We were one of those who set up to go where traditional capitalism didn’t reach and after sourcing a microfinance based initiative in Russia, brought it to the UK in 2004 with a business plan proposing the Bencom model, as congruent as could be found with our P-CED model, to stimulate local economies by investing profit from community broadband into CDFIs to provide seed funding for social enterprise: Here’s a relevant extract:

    http://www.ecademy.com/node.php?id=174452

    We simply couldn’t find anyone to invest in it. First stop had been ICOF who swiftly dismissed us giving the reason that they were restricting funds for broadband projects to bona fide cooperatives. SWRDA said they’d get back to us, if it was compatible with their own plans. They didn’t.

    It was clear to me that what we were up against was an ‘only under our banner’ mentality and after about 9 months of this, wrote to the chair of the SEC to relate this, She never responded either. ,

    http://www.box.com/shared/9c3x229hll

    While all this was going on, I discover ans economist named Hertz was writing a book about ‘The Debt Threat’ Preparing for Ukraine at the time I was studying a phrase book which could offer me a precise translation such as ‘I hear that the cooperative has introduced a new tractor’ there was no phrase for introducing a new capitalism. There were however those who questioned our motives – “You come here to create business and give it away to other people. Are you some new kind of communist, or just crazy?”

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  9. I have just come to this debate half way through but it is very interesting. I have sort of followed the recent development of social enterprises with a lot of interest, and in the charity I work for we looked at converting to a social enterprise 4 years ago but decided against it as there was no material benefit.

    At the time, the more I looked into it the less there seemed to be to social enterprise, other than a way of attracting new people into doing charitable things, which I am all for. But I am not sure if this is still the case. On reading comments about the potential development of social enterprise with different sub-sectors and the potential to be profit-motivated it reminds of the charitable sector, and the fact that they seem the same to me: charities have taken the forms of cooperatives, businesses and so on for many years, and there has been the same discomfort from some about the discussion of or making of money. Have more money coming in than going out seems common sense to me, whatever the organisation and sector, and that’s my aim where I work. I also think it makes sense to have a wide range of income so that you’re not as vulnerable financially, and to identify gaps in provision that fit the remit of your organisation and then fill that gap with something you create or already provide. I don’t think there’s any difference in these principles for anything that’s well run. The one difference for me with charities and/or social enterprises is that making a difference is the primary driver, not money. If money is the primary driver then it’s in the private sector.

    If social enterprise develops a clearer identity and it’s decided to include organisations with profit as the primary driver, then I think there needs to be a separate term for them.

    James

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  10. @James, there is a widely accepted term for this – social business or social purpose business. This is a business which operates without loss, distributes no dividends and invests surplus revenue into social objectives. I’ve also used the term ‘profit for purpose’.

    In the cooperative world they use the expression ‘coop for the greater good’

    http://www.futures.coop/2011/01/carpetbaggers-vs-commonwealth-co-op-cui-bono-benefits/

    In our proposals we’ve said:

    “Profits can be directly applied to help resolve a broad range of social problems: poverty relief, improving childcare, seeding scientific research for nationwide economic advancement, improving communications infrastructure and accessibility, for examples – the target objectives of this particular project plan. The same financial discipline required of any conventional for-profit business can be applied to projects with the primary aim of improving socioeconomic conditions. Profitability provides money needed to be self-sustaining for the purpose of achieving social and economic objectives such as benefit of a nation’s poorest, neediest people. In which case, the enterprise is a social enterprise. ”

    In hindsight, that should perhaps have read ‘social business’ although at the time that expression had not yet been coined.

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  11. A couple of other things that should possibly be taken into consideration here are:
    1. On values and principles we cannot just take money from anyone without consideration for where that money came from.

    2. If we really do want to change the way the world does business then are we really prepared to take food now from the hand we’re planning to bite in the future? Not sure this is a path laden with integrity.

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