Rip it up and start again

Happy New Year! At least, let’s hope it is.

2016 probably doesn’t need any further publicity but one recurring theme was that it was a pretty good year for the rip it up and start again brigade: not just in global politics but in the social sectors, too.

One of my particular favourites was the conveyor belt of swashbuckling business leaders explaining that current approaches to doing good were rubbish and that charity, government or both should be replaced by people more like them.

Suck it up

One of those change makers most prominently featured on the social investment circuit was Iqbal Wahhab, founder of restaurant chains Cinnamon Club and Roast.

He published a book, Charity Sucks, as part of Biteback Publications ‘provocations’ series and turned up at the Good Deals social investment conference in Birmingham in November to deliver the message in person as part of a conversation with Big Issue Invest Chairman, Nigel Kershaw.  He also joined Pioneers Post for one of their Black Cab Interviews.

Wahhab’s Good Deals contribution was entertaining but light on detail. The most telling moment came when he was asked a question from the floor about how businesses could solve the problem of meeting social needs in situations where the beneficiary couldn’t pay for the product or service being provided. He ignored it entirely and launched into an unrelated anecdote.

But the discussion was engaging enough to persuade me to buy and read the book, which was equally engaging but equally light on detail. Wahhab’s argument seems to be that some charities – including some that he’s been on the board of – have done some stuff he doesn’t think is very good, while growing numbers of businesses are trying to find ways to do social good as part of their regular business activities. And this shows that charity sucks because business does it better.

While it might be a bit much to expect a full plan to replace the entire charity sector in a short book written as a ‘provocation’, Wahhab fails to offer even a basic outline argument for how we might get from businesses following his example of giving all proceeds from a specified table in his restaurant to good causes and providing job opportunities, to the widespread provision of commercially unviable social goods by organisations aiming to deliver a profit for shareholders. There just some fairly anodyne stuff about shared value vs CSR, triple bottom lines and calls for charity donors and philanthropist to be more diligent.

While I’ve worked with many individual charities and charity leaders who I respect a lot, I’m open to the argument that the UK voluntary sector as a whole is currently in a bit of mess and (parts of it at least) could usefully spend 2017 considering what they’re for and what they’re trying to do. And while charitable registration encompasses a wide range of different organisations with an equally wide range of business models, I agree that many of the business models for service delivery charities (particularly local ones) are fundamentally broken.

If you liked foodbanks, you’ll love supermarkets 

The frustration with Wahhab’s contribution, though, is that he completely ducks the argument that he himself raises. How could business do the actual things that charities do and do them better?

Here’s a couple of possible examples that I’ve made up:

(a) Supermarkets are a far more efficient and sustainable vehicle for providing food for people who can’t afford food than foodbanks. Could large supermarket chains be given a universal service obligation so that anyone who would qualify for a referral to a food bank can get the food they need straight off the supermarket shelves instead? Like the US food stamps system but without the government money, just businesses doing it better.

(b) Property developers are keener on building homes than housing associations are and planning permission often depends on a requirement to build a specified percentage of ‘affordable homes’ and make Section 106 contributions to the local community. But why not cut out the social middle people and get these business people to ‘do it better’ by giving that direct responsibility for housing a set percentage of people on the local waiting list for social housing?

I’m not advocating either of these ideas but they’re examples of the kind of thing businesses would need to do if they were going to replace the actual life and death services UK charities provide.

Do charity critics like Wahhab actually want businesses to do that stuff? If not, how is that stuff going to get done? This isn’t an abstract intellectual discussion – it’s a discussion about if, how and where the least well off people in society get to have their dinner.

Government’s finished so I’m replacing it for $1 million  

Fortunately, not all socially motivated business leaders are limiting themselves to the relatively minor task of replacing charity. For ‘the French Bill Gates’, Alexandre Mars, it’s the state that needs replacing.

While the sub-editors of this Guardian interview with the tech entrepreneur turned philanthropist may have slightly amplified his hubris with the headline: ‘States don’t have the money to do good. Business does‘ it’s not an unfair reflection of the general tone of the article.

Mars has a made some money doing tech stuff and he’s putting some of that money into setting up Epic, a ‘philanthropy middleman’ which channels the donations of other wealthy people to charities. So far: “The foundation, which has staff in London, New York, Paris and Bangkok, has exceeded its 2016 target to raise $1m. As a result, each of the 20 charities it has selected will receive at least $50,000.

And: “Next year, a further 10 charities have been selected for support (from 2,000 applications), including two more UK charities, sport-based not-for-profit Street League and east London employment project ThinkForward.

That seems pretty good to me but it’s not immediately clear what it’s got to do with policymakers who ‘don’t have enough money‘ needing business to ‘step up‘.

A useful ‘size of Wales‘-style comparison figure for ongoing social spending in the UK is the budget of an average-sized secondary school. That’s around £4million per year.

The money Mars & co are providing to ‘change systems‘ in social good across the world this year* is enough to fund one of these UK schools for less than three months. The funding he’s putting into UK charities would fund that one school for just over a week.

It’s true that governments in the developing world are now struggling to provide the level of welfare provision that their citizens expect based on the levels of taxation that those citizens are willing or able to pay. It’s clear that business people could play a range of useful roles in solving that problem. It’s less clear that restricted donations of post-tax personal profits – whether by the French Bill Gates, or even the Bill Gates who is actually Bill Gates – is likely to be the most important of those roles.

Where spreadsheets have no aim 

And then, just when many of us working in and around social/impact investment thought 2016 had nothing else up its sleeve, came the exploding cherry on the cake of absurdity: Bono announcing that impact investment wasn’t working and he was turning up to sort it out.

Here’s the intro to the article in the New York Times:

“‘There is a lazy mindedness that we afford the do-gooders.’

That was Bono, the musician turned activist turned investor, lamenting the pitfalls of what has become an increasingly fashionable form of financing: social impact investing.”

By paragraph three the verdict is clear:

Most of these efforts have had mixed results; either investors lost money, or the social impact was negligible or nonexistent.

It has become, as Bono told me, ‘a lot of bad deals done by good people.’

The summary is that Bono, Jeff Skoll and a bloke who works in private equity and ‘resembles a Buddhist monk‘ apparently reckon no one involved in impact investing has ever thought of the idea of an impact fund being quite big and measuring the impact of its investments.

To some extent, as a social entrepreneur, I can see a delicious irony in some blokes rocking up and telling impact investors that everything they’ve been doing for years is a load of sh!t – and they should listen to the real businessmen (and rock star) who know how to do things properly and have finally cleared the space in their diaries to tell us.

But however delicious that irony is, the aftertaste is rank.

Anger and stupidity 

We enter 2017 in a moment brimming over with both anger and stupidity – and we need to find ways to channel the anger effectively and avoid the stupidity.

We shouldn’t accept the status quo but nor should we blithely accept *something else*, whatever it happens to be. Alternatives to the status quo, even alternatives proposed by clever business people and Bono, need to be challenged as strongly as the structures and models they’re seeking to replace because social change worth having is complicated and difficult.

*Value of $1million in £ at time of writing around £817,000

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9 Comments

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9 responses to “Rip it up and start again

  1. I’m glad someone else has noticed David.
    The case for displacing charity with a business model id far from new. It’s part of the argument for reforming capitalism that P-CED set out 20 years ago, to describe a business model which distributes no dividend and applies at least 50% of profit for social benefit.
    In 2004, the DTI verified that this qualified to be described as social enterprise,
    There are many examples of how this may be applied in our project plans,
    The most prominent. is of course that which I shared withg McKinsey readers. The plan described a social investment fund of 1.5 billion upwards and by the look of it, Bono has lifted the entire concept, even making the same point about capitalism and putting people over profit, but he has no plan. It could have been an argument from social enterprise, had there been support:
    https://www.linkedin.com/pulse/bonos-billionaires-financial-social-return-jeff-mowatt

    Like

  2. Beanbags admin

    Thanks, Jeff. Happy New Year!

    Liked by 1 person

  3. We could choose to “enter in 2017 in a moment brimming over with both anger and stupidity” but as always there’s another view. Surprisingly I find myself quoting the Queen’s Christmas message in this context (which I happened to listen to for probably the first time ever this year). I was heartened to find it quite neatly summed up some of the reasons I find to be optimistic in the face of much of the negativity that characterises commentary such as that you cite. One short excerpt “… to be inspirational you don’t have to save lives or win medals. I often draw strength from meeting ordinary people doing extraordinary things: volunteers, carers, community organisers and good neighbours; unsung heroes whose quiet dedication makes them special”.

    Liked by 1 person

    • Beanbags admin

      Hi Nikki,

      Happy New Year! I agree with you (and the Queen) about the importance of quiet dedication and recognising all the good work that people do an ongoing basis without making a big fuss about it.

      Not that I’m opposed to people pointing out what needs to change and suggesting about exciting ideas about how to make change happen. That’s really important, too.

      What I think need to more wary of is people saying everything we’re currently doing is rubbish without suggesting a meaningful alternative.

      Like

  4. Wasn’t Bono the dude that has a complex web of offshore tax vehicles? Perhaps he should pay tax before adopting the moral high ground.

    Oh, and I think he once sued his stylist, because she tried to sell a hat FFS.

    What an irritating little twat he is.

    Like

  5. We faced an entirely different reality, with a proposal for social enterprise development. Virgin Unite and Grameen were soliticing project ideas. The British Council were advertising for partners and USAID were offering grants for community driven projects.

    We tried to join a club that wouldn’t have us a members.

    The outcome was violent conflict and a plane load of dead passengers falling in the grounds of the orphanage that my colleage risked his life to speak out about:

    https://www.linkedin.com/pulse/branson-yunus-match-made-ukraine-jeff-mowatt

    Like

  6. Pingback: Predicting nothing: Have I Got Social Enterprise News For You | SSE

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