Who supports social enterprise now?

Last week I went to the launch of London Borough of Waltham Forest(LBWF)’s Thriving Voluntary and Community Sector Strategy. When they started work on it was alliteratively known as the Thriving Third Sector Strategy but during the process of putting it together, the Third Sector was abolished by the incoming Coalition government.

Broadly speaking, the Coalition government has also abolished social enterprise support as a continuous specialist service. Regional support organisations were mostly funded through Regional Development Agencies and they’ve been abolished.

That’s a shame because at the launch of LBWF’s strategy, everyone seemed to be talking about social enterprise: some people were already running one, others were thinking of setting one up. This clearly isn’t a co-incidence. The reason why more people are starting social enterprises and more people in the traditional voluntary sector are looking at socially enterprising approaches is more or less the same reason why social enterprise support has gone or is going. The money has run out. Not in a literal sense – NCVO’s Civil Society Almanac reveals voluntary sector income was £36.7 Billion in 2009-10, up from £34.6 Billion in 2008-09 – but in real terms, when income is adjusted for inflation to show what the money organisation’s have can actually buy, the sector’s income is now dropping.

This is particularly painful because it’s a drop that comes after a long period of significant, sustained growth – from £26.9 Billion in real terms in 2000-01 to £38 Billion in 2007-08. During that period, the New Labour government talked the talk in terms of voluntary sector organisations becoming more businesslike but – while there was a big increase in public sector contracts – there was still plenty of grants as well. And many local authorities were funding organisations through hybrid arrangements that were a bit like a contract and a bit like a grant. The main point was that there was lots of money.

Not all specialist social enterprise support provided during these times of plenty was especially good – some of it was people who didn’t know much about business telling people how to write business plans, without any clear notion of who or what they might be writing them for – but  some of it was sensible and potentially useful. The problem was that the conditions weren’t right for large numbers of organisations to make real use of it. Why would someone looking to start a socially useful organisation want to try and run it as a sustainable trading business when there were so many opportunities to get grant-funding or block contracts that were effectively grants?

Now thousands of organisations are faced with the choice of either finding a sustainable business model or ceasing to exist but it’s not clear where they should turn for help. One option – particularly in London – is to get some assistance from one of the plethora of highly publicised corporate social enterprise support schemes that have been springing up over the last year.

For Deloitte, running their Social Innovation Pioneers scheme is  ‘a huge skills development opportunity for our people’ and its probably also fairly helpful to the social enterprises involved but these schemes are, quite reasonably, about identifying potential market leaders in social innovation not about supporting small organisations with no ambitions beyond making life better for a group of people in their local area on an ongoing basis.

The support role for those organisations is primarily left either to local authorities or to local Councils for Voluntary Service (CVS), such as Voluntary Action Waltham Forest (where I’m a trustee). The problem is that often local authorities and CVSs don’t know very much about social enterprise themselves – beyond thinking it’s a really good idea (or, in some cases, thinking it’s a really bad idea).

It’s possible to over-emphasise the need for support services – many social entrepreneurs are pretty good at just getting on with it – but it’s also likely that there are thousands of people with socially enterprising ideas who just need the right bit of advice at the right time to reassure that it’s worth carry on (or to help them avoid doing something that will lose them lots of time and money). If regional social enterprise support agencies aren’t going to do that, who is?

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13 Comments

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13 responses to “Who supports social enterprise now?

  1. jeffmowatt

    Nobody ever did, as far as I’m aware David.
    I’m talking of support in terms of promotion, introduction rather the financial kind. In 2004, SEC and SEL both said they couldn’t help and when I moved West, RISE-SW simply disregarded my multiple communication attempts.

    As you say we’re now seeing rise of the corporate sponsor and the continuance of the “showcasing” strategy of government. Deloitte emailed me lont long ago, asking for comments and feedback on the Pioneers initiative. The term ‘pioneers’ intended to convey that they were instrumental in breaking new ground.

    It was also at the time of the build up to Euro 2012. Several causes had attached themselves to this event. One was Kate Blewett’s BBC4 documentary on the plight of disabled children in Ukraine, which everyone I’ve ever communicated with knows has been the central focus of my own efforts for the past 6 years. So I sent the story to Deloitte. I never heard back. My article was at least ‘recommended’ by many of my activist peers.

    http://world.maidan.org.ua/2012/every-child-deserves-a-family

    As my article indicates, far from being supported we were dismissed, censored and hijacked, even by those who were publicly funded to deliver assistance.

    When the Guardian’s Sustainable Business hub, another corporate sponsored watering hole, recently listed the top 15 tweeter in sustainable business with the top 15 ‘thought leaders’. It struck me that neither were these leaders in the sense of doing something nor though leaders in the sense of offering something original. Many were in fact organisations we’d looked to for support and found wanting.

    Increasingly we see it for what it really is, the PR front for business as usual.

    http://economics4humanity.wordpress.com/2012/06/27/the-sustainable-consultant/

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    • If you would like a non corporate organisation that can deliver Social Enterprise training and advice that is owned and run by its members then take a look at the Social Enterprise Foundation (SEF). http://www.socialenterprisefoundation.org.uk This organsiation was created by a network of social enterprises in 2005 to change society by not reproducing it. At the foundation it is free to become an associate member and access our knowledge bank. The key difference is it is run as a social enterprise so it is not dependent on grants or funding. The organisation is controlled by its members who are also the practioners delivering training and advice. However, the training does cost and key to the discussion is that if you are willing to pay an accountant or solictor for advice be willing to pay for professional advice whose quality is maintained by the social enterprise sector.

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  2. Interesting article David. We (Enterprise for Change) are a socially useful organisation that provides business start up and self employment support to disadvantaged groups in the South East, currently we are working with offenders/ ex offenders and the unemployed via the Work Programme and the ESF funded Job Deal to reduce re-offending.

    We also work with young people, women and hope to add ex-military soon.

    We have seen a significant increase in demand in social enterprise start-up support services from schools, colleges and prisons for the reasons you have outlined. We have developed a specific program to meet this demand.

    If any of your readers would like to find out more we would be more than happy to have a chat.

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    • jeffmowatt

      Hi Jennie, My disadvantage may well have been moving South West to the land that social enterprise forgot.
      With a background in the software development business and experience of microenterprise development overseas we thought we might have something to offer.

      http://people-centered.net/

      Early last year someone suggested I get involved with the government scheme for Enterprise Clubs, so I made enquiries via the web and the local Jobcentre. Never heard a thing after they told me they’d refer those interested on to me,
      So it seems. even a self-sustaining business cannot offer social enterprise support.

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  3. Hi David
    There’s a new national support service for the social enterprise sector –
    http://inspire2enterprise.org – designed for people looking to start, grow, or improve their social enterprise. Social enterprises can call the free-to-access service on 0844-9800-760. We found out about it through the University Enterprise Network (of which we are a co-founder), as the service is provided by the University of Northampton.
    Also, we at the Social Enterprise Mark are providing support and signposting to people looking to set-up a social enterprise by advising they review the Mark’s criteria, and increasingly, we’re helping private businesses convert to social enterprises to be able to get the Social Enterprise Mark.
    Lucy

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    • Beanbags admin

      Hi Lucy,

      I heard about the launch of Inspire 2 Enterprise. It will be interesting to see how it develops. Despite filling in loads of evaluation forms, I’m don’t know whether we’ve ended the government funded-era with a much clearer picture of what social entrepreneurs want from support services than we had at the beginning. Maybe a mostly phone and online based service will work?

      Interesting that private businesses are converting to a social enterprise approach. What sorts of changes are they having to make to their business model (or structure) to get the Mark?

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      • Is “converting” a private business to a Social Enterprise Mark Company licensee much more than ethicswashing for fun and profit? These fairweather friends might be simply taking shelter from the current adverse conditions (foulweather friends?) and will want to revert when things improve. As we’ve seen in the recent past, asset locks are only as strong as the shareholders who enforce them and conversions may well still have their pre-conversion shareholders.

        There’s also the key problems that the SEMCo criteria do not reflect social enterprise – the key one for me being the profit-lock which demands that worker-owned enterprises to gamble on raising base salaries (which appears under the Expenses heading as far as SEMCo can see) and reducing dividends (which SEMCo sees as profit distribution) – and that SEMCo is converting or has converting from being owned by social enterprises to being owned by a private trust. If SEMCo is so keen on converting privately-owned businesses to social ones, maybe it could start by converting its owner?

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  4. jeffmowatt

    There’s an article by Bob Thrust today in the Guardian’s social enterprise hub, which makes the same point about the need for social business from government as we made in our 2004 business plan.as pioneers of social business.

    https://socialenterprise.guardian.co.uk/en/articles/social-enterprise-network/2012/jul/02/social-enterprise-compete-mainstream

    Harvard is handing out awards for Long Term Capitalism, equivalent to what we call ‘a long term permanently sustainable program’.to those who write academic articles. while others go out walking the talk and die , being the change.

    It has to be understood that in denying someone’s creative property, denies them the means to make a living and consequently denies them and others a life.

    http://economics4humanity.wordpress.com/2012/07/02/the-orphans-of-wealth/

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  5. Hi David – I agree that a lot of specialist support in the past has been weak. One of the problems has been as you have identified the conditions under which social enterprise was growing. Much of it was little more than funding advice. I worry that business support for social enterprises has not adapted to the new paradigm of no grants and fewer, scarcer contracts in the public sector (many social enterprises have not adapted to this either, and are not asking what do we need to do differently to adapt).

    Much of it is hit and miss even when you apply a quality standard to it such as SFEDI. The corporate options do not do it for me either as they often misunderstand the market or aimed the advice at individuals who fit their own agendas.

    I think we need more peer learning, but this takes time, effort and resource on the side of the peers doing the advice. The most useful advice I’ve had has been through the Academy of Chief Executives who meet on a regular basis locally but are not social enterprise focused. They get their collective heads together to help to solve your problem every month.

    On the conversions front, the main issue has been adapting the legal structure to ensure that there is a clear social/environmental objective and to ensure that there is a restriction on profit distribution (and asset distribution on closure).

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    • Beanbags admin

      Yes, I’m not sure anyone’s really adapted to that new paradigm yet. The big question facing many formerly state-funded social enterprise seems to be ‘how do we deliver stuff that people need with little or no government cash?’.

      Even the better quality SE support delivered in the 2000-2008/9 period was tailored to the circumstances of the day, which have now changed beyond recoginition.

      I agree about the corporate stuff. Not that it’s not potentially useful for some organisations but the agendas – not hidden ones, open and legitimate ones – of corporates don’t necessarily crossover with the agendas of people working to deliver positive social change.

      I think you’re right about peer learning. I suppose School of Social Entrepreneurs is the most structured and successful example of that but I think there might ways of supporting a smaller range of similar activities in local areas.

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    • jeffmowatt

      Lucy, Here’s the email first sent to RiSE_SW in November 2006, introducing the self sustaining paradigm, the paper that introduced it and what had been achieved with it:

      Hello Rise,

      I write in search of networking possibilities in the UK, being an active contributor to both the Skoll Social Enterprise forum and the Omidyar network over the past few years. As far as I can see, no similar network exists within the UK.

      I run the UK branch of P-CED (People-Centered Economic Development) using revenue from an IT service business to fund overseas efforts.

      P-CED began in the US in 1996 by offering a whitepaper on poverty eradication to the Clinton administration. It proposed a people-centered approach and targetted economic development as an alternative to previous failures in top-down approaches, most notably the disappearance of vast sums in the Defence Enterprise Fund deployed in the Yelstin era of Russia’s recent history. You may see quite a lot of similarity between what we called a P-CED enterprise and the CIC form of business incorporation.

      By 1999 our founder Terry Hallman had been invited to put these ideas into practice and chose to do so in Tomsk, Siberia introducing a microcredit bank operation under the principle of moral collateral, or peer group lending.

      Having returned a successful outcome which saw the creation of 10,000 new businesses in the period 2000-2005 with seed funding of $6M we have continued to promote the model with my joining P-CED in 2003. Since then I have found the world of Social Enterprise in the UK almost inpenetrable, in spite of the government support which clearly exists. Hence a feeling of social isolation rather than enterprise.

      Our current work is focussed on Ukraine, where we’ve recently completed a 3 year research project to bring peer group lending and social purpose business in at a national level. We’re now being supported in the non-monetary context by local resources who are helping with language assistance and channelling the plan through to national government.

      We’re proposing a business mix of revenue positive and revenue neutral activities toward a major social objective, the funding of group care homes for all Ukraine’s economic orphans and street children. Our target for external seed funding will be the Millenium Challenge account for transitional democracy. Additionally we propose a new faculty for Social Enterprise in one of Ukraine’s state universities.

      All of this will be based on the successful social purpose model for which proof of concept was delivered in the Tomsk project. I’d like to be able to network with others in the UK on the subjects of social capitalism, microfinance, targetted economic and human rights activism, with the aim of raisng the stakes for social enterprise.

      You”ll find more about us on http://www.p-ced.com/

      Regards,

      Jeff Mowatt
      P-CED UK Ltd
      Forest of Dean, Gloucestershire

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      • I think several of us from the “100% Trade” wing of social enterprise around Bristol were saying this to Rise for years, but Exeter HQ seemed to view us as vandals from the North and it felt like they wished the Taunton Stop Line was still defended!

        I think Rise’s leaders didn’t fix the roof while the sun was shining, dazzled by RDA largesse, and as soon as the grants were cut, Rise was closed, despite a significant minority of shareholders wanting to continue and reform it into a sustainable enterprise. We were outvoted in a process that I feel was rather anti-social, if legal, and we lost our investment and the remaining public money.

        The people running SemCo now have a significant overlap with the people who failed to adapt Rise to a post-grants world. I feel there are better people to ask for advice on how to run a social enterprise sustainably.

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      • jeffmowatt

        MJ Back in 2004 I was given a ‘we’ll let you know’ by SWRDA (below) I never heard from Fabian King, even after sending a reminder several years later.

        We’ve all made ‘significant investment’, I presume unlike ours this wasn’t their own money but ours, from the public purse.

        I never saw this policy referred to. For me this is yet another illustration of those publicly funded getting in the way of democracy.

        Our business plan clearly stated was to tackle poverty. Today on R4 I hear that a million children in the UK suffer hunger. Last week from Colin Crooks that 6.5 million are either seeking work or more work in order to meet their bills.

        http://www.bbc.co.uk/iplayer/episode/b01k2b12/Four_Thought_Series_3_Colin_Crooks/

        What purpose does locking out those who want to create jobs serve? Is the whole country to suffer while an elite talk our walk and at our expense?

        Dear Jeff,

        Thanks for your e.mail outlining your idea for a rural broadband model, linked to a CDFI. The RDA has made significant investments in this area and we have developed an ICT strategy that has outlines the actions we propose to support. The case officer for this in the RDA is Fabian King, who is based in our Exeter office. I have therefore passed your proposal to him for comment on how it “fits” with our broadband strategy and asked that he respond direct to you. If he wishes to pursue the idea further I will be happy to contribute on the Access to Finance side of the equation.

        Steve Richards

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