Tag Archives: reconstructing social enterprise

Reconstructing Social Enterprise 2: Refusing the Market

This post is the second in a series of four posts about the Reconstructing Social Enterprise seminar series. The first post in the series focused on a paper exploring a range of different critical approaches to social enterprise research.

The post looks at Angela Eikenberry’s paper Refusing the Market: A Democratic Discourse for Voluntary and Nonprofit Organisations‘, which formed the basis for her presentation at the 3rd Reconstructing Social Enterprise seminar in Birmingham in April, takes aim at “the increasing marketization of nonprofit and voluntary organisations” and “argues that one way to resist colonization by the market is for academics and practitioners of voluntary and nonprofit organizations to create and apply a democratic counterdiscourse”.

Taking a normative approach, the paper seeks to challenge assumptions about and discuss the implications of, the marketization of the nonprofit or voluntary sector. Eikenberry is based in the US but the trends she discusses are also prevalent in the UK (or certainly in England).

Eikenberry regards marketization – primarily characterised by the suggestion or demand that nonprofit and voluntary groups should generate a greater proportion of their funds through ‘earned income’ – as a threat to democracy and civic values. She also regards this shift as part of a wider trend encompassing consumerism and lifestyles focused around brands and logos.

She explains: “If one is concerned with the development and maintenance of participatory and deliberative democracy, this colonization of everyday life by the market is problematic.

This is a problem because “The ideology of the market is essentially anti-social, based on self-interest rather than disinterest or the public good.

Eikenberry situates the marketization of the nonprofit and voluntary sectors within both the wider US culture of support for business and entrepreneurialism, and the dominant neo-liberal economic model which demands a smaller role of the state with an increasing role for the voluntary sector in social service provision.

As well as an increase in contractual trading relationships between the voluntary sector and the state, Eikenberry also sees dangers in the growth of cause-related marketing which has: “grown rapidly in recent years as corporations look for ways to make philanthropic activities more strategic and profitable“.

The result is that “traditional notions of philanthropy, such as concern with mankind, creation of social capital, and responsibility to give back are colonized by a market discourse that promotes consumption as a practically effective way to solve social ills, thereby marginalizing other forms of civic and philanthropic means to effect change.

Eikenberry warns that “a market discourse appears to compromise contributions nonprofit and voluntary organizations might make to democracy“. She cites a 1999 survey which found that: “market orientated organizations have shifted their focus from public goods such as research, teaching, advocacy, and serving the poor to, to meeting individual client demands.

This is followed up with reference to a claim that “social enterprise ‘may well end up addressing symptoms rather than root causes’ because of its focus on the most entrepreneurial way to address a social problem rather than on why the problem exists at all.

Whilst the claim that entrepreneurial approaches to tackling social need don’t necessarily tackle the root causes of social problems, Eikenberry doesn’t offer a clear illustration as to why they’re inherently less likely to do so than less entrepreneurial (democratic?) approaches.

For example, a social enterprise that provides sustainable, reasonably well paid employment in a disadvantaged area might come closer to tackling the route causes of chronic hunger in that area than a donor-funded food bank. If you view the root cause of hunger as the underlying economic structure of society as a whole as the root cause of hunger then neither of them make a decisive difference – although the sustainable employment should have a greater effect – but this seems to be more of an argument about practical action vs. campaigning rather than an argument about different funding models for practical action.

Eikenberry is on solid ground with her secondary critique of the shift towards entrepreneurialism and earned-income generation that, in many cases, it doesn’t work. After raising the issues that donors might stop donating to organisations that appear to be operating as commercial businesses, she notes that: “New research has shown that social enterprises tend to be more complicated and less lucrative than they might first appear.”

Her anecdotal references may mean more to US readers: “For instance, The Delancey Street Foundation, which is generally seen as a successful social enterprise, still relies heavily on private donations for support (Seedco Policy Center, 2007)” but UK readers are likely to be able to insert a social enterprise posted child of their own into that sentence with same effect.

Beyond anecdotes, the evidence of a 2005 survey that reported: “nonprofits that had received philanthropic funding for an earned-income venture during 2000 and 2001 found that 71% of the nonprofits said that they were in fact unprofitable, 24% believed they were profitable, and 5% stated they were breaking even” is telling.

This evidence, or similar evidence of the non-profitability of social enterprises in the UK, is not necessarily a convincing arguments against social enterprise as an activity but it’s a major challenge to the idea that it’s an activity that can replace grants and donations as a source of funding for social change.

Where the paper is less successful is in its apparent primary purpose, to explain the need for and practical implications of a democratic counterdiscourse to marketization in the nonprofit and voluntary sectors.

That’s partly because Eikenberry doesn’t manage to communicate the negative effects of marketization in a way that would mean anything much to anyone who doesn’t regard consumerism as a great evil and is broadly unconcerned about the possibility that a nonprofit or voluntary organisation might engage with them as a customer rather member or donor.

More tellingly though, the democratic alternative discourse is apparently based primarily on getting more donations from individuals: “One possibility is for nonprofit practitioners to cultivate more meaningful and diverse relationships with individuals rather than focusing mainly on raising funds through market approaches. In the United States, more than 80% of private contributions come from individuals, and there is substantial capacity for greater charitable giving by individuals.

The idea that donations are fundamentally more (or less) democratic way of funding nonprofit than trading is one that needs some explanation but it’s not immediately obvious that donations are (necessarily) even a less marketized way of funding social action than selling products and services. Certainly in the UK, fundraising charities through everything from chugging, to branding, to celebrity driven stunts, compete aggressively in a cut throat market for donations.

Eikenberry does add that: “The important goal here is to build social relationships and social networks, in line with Grace and Wendroff’s (2001) suggestion that fundraisers shift from a transactional to transformational giving model that engages individuals more regularly and more deeply in the work of the organization.”

That makes sense but it’s unclear why the existence of a transactional relationship would necessarily prevent a nonprofit or voluntary organisation from moving beyond a purely transactional relationship. It’s an argument that provokes the tautological statement that surely the best measure of how democratic an organisation is, is the extent to which it operates democratically – not whether or not it generates its income by selling things or asking for money.

Further suggestions for the democratic counterdiscourse include that: “nonprofit and voluntary leaders could look for ways to diversify their boards of directors so they are more representative of clients and the community (Guo, 2007). They might also put as much effort into encouraging deliberation among board members on substantive social policy issues as they put into ensuring resource support and efficient outcomes.

The paper makes a valuable contribution towards opening up the debate about marketization of the nonprofit and voluntary sectors. While the arguments for an alternative ‘democratic discourse’ seem under-developed, they do offer a starting point for discussion about what a democratic social economy might look like.



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Reconstructing Social Enterprise 1: The Critical Turn in Social Enterprise Research

This post is the first in a series of four posts about the Reconstructing Social Enterprise seminar series:

… reviewing the extant literature there was an uneasy feeling that many social entrepreneurship scholars have been keen to reiterate political and media narratives with no or only minimal critical interrogation. As a result, the scholarly debate of social entrepreneurship purports the view that social entrepreneurship is a good thing and that, by extension, the more social entrepreneurs the better.

This quote from the summary version of Pascal Dey and Chris Steyaert’s paper, The Critical Turn in Social Enterprise Research,  sets the scene for both the paper and Reconstructing Social Enterprise as a whole. The ESRC seminar series brings together academics with an interest in social enterprise, policy people from social enterprise support organisations and social enterprise practitioners to address: “a reality gap between the idealised notion of social enterprise presented in academic and policy literature, and the day to struggles of those practising social enterprise.

Dey and Steyaert’s paper, as presented at the first seminar in Northampton in November 2012, maps four possible critical approaches designed to bridge that gap before considering the wider questions of how social entrepreneurship ‘might contribute to an alternative social, economic and cultural order’ and how research might support that.


The first critical approach to be considered is ‘Mythbusting’ which “probes whether what is casually said about social entrepreneurship (read myths) actually corresponds with reality.

There are the grandiose claims made for social enterprise: “Common mythical themes pertain to the way social entrepreneurship is related to, for instance, system-wide social change or to the sweeping eradicating of the intricate problems of our era (Cukier et al., 2011).

One specific myth mentioned in the presentation is Resource Dependency Theory (RDT) , which “suggests that social organizations switch to commercial activity to compensate declining government grants and/or private donations“. Current research suggests that few actually do so (successfully).

Equally important to a myth-busting approach is to talk about “things which are not mentioned” causing myths to develop as a result: “Emblematic in this regard is the issue of failure: failure has to this day remained under the radar of researchers (despite there being notable exceptions… ) which in turn fosters the (mythical) impression of social entrepreneurship being infallible or at least far more successful than it actually is.

The authors note that: “the hope of mythbusters is that the sacrifice of the myths of social entrepreneurship will lead to an incremental approximation of the truth“. It’s an approach that involves cutting through the crap.


The second critical approach considered is ‘Critique of power effects’ which is based on the idea that, having cut through the crap, the mythbusters may not arrive at ‘the truth’ but instead find themselves confronted with some more crap or, to be more specific, the dominant worldview and the powerful people who propagate it.

These critiques consider social entrepreneurship as a: “grand narrative or ideology which, in its usage by societal elites and powerful actors (Mason, 2012), presents dominant cultural and historical values and world-views as self-evident and natural, while rendering possible alternatives (read more egalitarian,  participatory, democratic, etc. values and vistas) unthinkable.

So, ultimately, it less important to ask whether ideas about social entrepreneurship are true than to consider how powerful people are using the overall idea of social entrepreneurship to support their political and economic agendas. 

To take one of the biggest examples, many governments are currently cutting public spending and opening up markets in public service delivery, while encouraging social organisations to become more business-like. According to this critique, social entrepreneurship, as defined by those governments, supports that agenda and helps to close down the space for that agenda to be challenged.

What’s social about social entrepreneurship? 

The third critical approach considered is ‘Normative critique’. These critiques reflect on social entrepreneurship  “in terms of whether and how it contributes to the common good, the good life or an inclusive sociality at large.

They question: “the ostensible win-win relationship between the two terms ‘social’ and ‘entrepreneurship’.” and consider whether it’s right to assume that: “that the single best way of solving the ills of the market is through the market.”

Some normative critiques ask whether the market-based approaches suggested by social entrepreneurship threatens the democracy of the voluntary and not-for-profit sectors. In doing so, they have:  “gone as far as to dispense with the term ‘social entrepreneurship’ for it seems to undermine the democratic spirit of the social sector (Eikenberry, 2009) or simply because it ingests the social: the “social in social entrepreneurship is too weak, and entrepreneurship is too managerialised (Hjorth, forthcoming).

“The witches-brew of actual practice”

The fourth critical approach considered is ‘transgression’. This approach is: “premised upon the assumption that the best way of practicing critique is to study carefully the witches-brew of actual practice (Brady, 2011), i.e., the complex, often paradoxical and ambivalent ways in which practitioners go about their everyday lives.

The critiques explore the ways that people actually running social enterprises and other voluntary sector organisations deliver their own critique of dominant ideas about social entrepreneurship by not being the people that politicians and sector leaders say they are, and not doing the things that politicians and sectors say they should do.

Transgression “testifies to the fact that the Discourses, grand narratives or ideologies of social entrepreneurship which inter alia demand that practitioners in the social sector become more flexible, risk-taking, perseverant, innovative, etc. are not blindly adopted by those working in the field (Curtis, 2008).

This approach could enable researchers to question, for example, the extent to which the fact that such a small percentage of social enterprises manage to ‘scale-up’ is actually down to the fact that – despite all the political pressure and hype to the contrary – many of them don’t want to.

These critiques do not assume that practitioners reject dominant ideas about social entrepreneurship in totality: “Whilst transgression might take the form of down-right resistance, it might also involve more nuanced, elusive reactions such as the ongoing struggles and ideological dilemmas taking place at the intersection of power and local action, where practitioners might simultaneously endorse and perpetuate certain spaces of constraint while rejecting others.

It seems unlikely that many social enterprise and voluntary sector practitioners would see their work as being an active rejection of ‘grand narratives or ideologies of social entrepreneurship’ but in running organisations with different priorities, structures and approaches to doing business to those promoted by those in power they are promoting a (possibly partial) alternative approach.

For example, give the dominance of the heroic model in social entrepreneurship theory, social entrepreneurs can provide the basis for a transgressive critique by being hard-working, not especially charismatic people who quietly get on with improving the situation in their local area.

Provocation and intervention

The paper argues that critique of social entrepreneurship is an ongoing process that: “needs to be approached not as a project (which has a clear beginning and ending) but as an open-ended endeavor (Derrida, 2001).

Ultimately, critique can itself play an active role in delivering social change: “the pressing task ahead is to move the critique of social entrepreneurship away from an exclusively contemplative and scholastic mode towards one whose objective is to provoke and intervene into how social entrepreneurship is both understood and practiced.

The authors suggest two possible ways to make this happen. One is by doing more ethnographic research, looking at how social entrepreneurs operate on a day-to-day basis, and interacting directly with end users of social enterprise products and services to find out that social enterprise affects their lives.

This authors point out that: “ethnography’s intimate fieldwork has critical potential in the way it gives voice to those people and perspectives who/which are conventionally not heard in academic discourse (such as beneficiaries but also social entrepreneurs; Hervieux et al., 2010).

Another method of provocative intervention in social entrepreneurship is action research. Like ethnography, action research into social entrepreneurship involves working directly with social entrepreneurs to see things from their perspective. The key difference being that: “A central component of action research is that it is not a priori clear where the research journey will lead or what sort of outcomes it will produce.

The result is: “Whilst the research trajectory is largely shaped by the participants, the responsibility of researchers is to explore how they can support a world becoming different.” So researchers work with social entrepreneurs and other participants to develop alternative approaches to social problems.

Is there an alternative?

For the authors: “The last and arguably most challenging task suggested here is related to the question how social entrepreneurship might contribute to an alternative social, economic and cultural order.

While social entrepreneurship is often heralded as an alternative (better) way of doing business, the authors suggest  that, in most cases, it is the same way of doing business and, at best, addresses the symptoms of economic failure rather than the causes: “at closer examination it appears more apt to suggest that social entrepreneurship is chiefly in line with a deeply uncontroversial version of capitalism (Boje & Smith, 2010).

In conclusion the authors argue that researchers: “… should not only identify the more radical examples of social entrepreneurship (i.e. those which do not immediately translate into support for the capitalist project) but actively create collective spaces and open platforms where such endeavors can be connected with the aim of articulating and negotiating (alternative) reality accounts and identities.

The second post in this series is published here.


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