Tag Archives: social enterprise magazine

Growing incredulity

Last night’s RBS SE100 awards ceremony was a curious mixture of the positive and the sombre. Based on first impressions, this year’s report is a more valuable document than last year’s – which, in itself, was a useful starting point in terms of describing the current situation in the sector. Concerns, raised by a number of commentators, about whether it was useful to regard growth as an end in itself have been addressed.

This year’s growth award went to Cool2Care based on high percentage growth from – in social enterprise terms – a reasonable turnover at the start of the year, and based on a clear plan for continued growth and sustainability.

Where social enterprise optimism syndrome is still in evidence is in terms of this year’s renewed attempts to compare the growth of participants in the SE100 with growth in other sectors of the economy. Report publishers Social Enterprise Live state:

“The revenue growth of the FTSE100 in 2010 was around 5%, and the fastest recorded growth period of the UK’s small and medium sized enterprises in 2006 showed growth of 8.4%. In comparison, the total combined revenue of the RBS SE100 top 100 enterprises grew by 51% and the revenue growth of all those on the index that submitted figures was 14%.”

While this clearly is a comparison, it’s not one that tells anything much. The RBS SE100 top 100 enterprises is made up of the fastest growing 100 social enterprises from a self-selecting sample* of social enterprises who’ve entered into a competition with a cash prize for achieving growth. The FTSE is an index of the 100 most highly capitalised companies listed on the London Stock Exchange. Growth in the previous year is clearly not the only factor affecting a company’s market capitalisation. To avoid confusing readers with jargon, the basic point is that companies are likely to be on the FTSE100 because they’re really big not because they’re growing fast.

If we wanted to make an accurate comparison between growth in the social enterprise sector and growth in the mainstream private, we’d need to compare the RBS SE100 top 100 enterprises with the 100 mainstream private sector enterprises that have achieved the most growth in the last year – or, in the case of the second figure, with the 100 SMEs that have grown most in the last year.

Another moment of possibly unjustified optimism comes from Peter Ibbetson, chairman, small business, RBS, who tells Social Enterprise Live that: “The SE100 helps us demonstrate the unique role this sector plays in terms of its social impact and rapidly increasing contribution to the UK economy.”

Even the headline figures on page 6 of the report suggest a slightly different understanding of a ‘rapidly increasing contribution’ at RBS to elsewhere. In 2010, 350 listed companies turned over a total of £812 million, while this year 409 companies turned over a total of £844 million. This represents a reduction in average turnover of 11% (over £256,000).

That doesn’t tell us that there’s necessarily been an 11% decrease in the average turnover of all social enterprises but given that the RBS SE100’s self-selection process hasn’t – to my knowledge – changed significantly, the fact that those who chose to enter this year are collectively turning over 11% less on average than those who chose to enter last year can’t logically be regarded as evidence that the sector is growing.

One problem with suggesting that the sector is growing significantly when it isn’t is that it has the potential to let key stakeholders – the government in particular – off the hook. Civil Society Minister, Nick Hurd, who spoke at last year’s event and has subsequently offered regular endorsements of social enterprise as an idea, was unable to speak last night as he was called away to a vote in the House of Commons. That was a shame as I imagine many of those present might have been keen to ask him if and when the Coalition is going to back up its theoretical commitment to social enterprise with some measures which are practically useful to social entrepreneurs.

The reality is that while many social enterprises are growing (and the RBS SE100 is valuable way of recording and celebrating their success), the sector as a whole has – along with most other sectors – had an extremely difficult year. With the publication of the Public Services White Paper yesterday – and the success of many social enterprises in generating income from sources other than the state – there’s plenty of opportunities to deliver a more socially enterprising future but, while optimism is a vital quality, it’s equally important to balance it with pragmatic realism.

*The term self-selection in this instance refers to whether the organisations choose to opt into the process, not whether they are regarded as social enterprises

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If you don’t invite us to your party then we’re not going to come

Any social enterprise observers who’d considered putting a bet on how long it would take leading figures in the social enterprise lobby to go cold on the Tories ‘Big Society’ brand will now be wishing they’d put £100 on  ‘under 3 months’.

In a refreshing break from the garbled niceties that so often serve to keep policy discussions well out of the comprehension zone of most of the small % of the general public who might be interested, Social Enterprise Coalition Chair, Claire Dove, has slammed the government’s new vanguard communities initiative saying: ‘It’s like the Emperor’s new clothes. There’s something there, but there’s nothing underneath.’

It’s true that Dove is partly cheesed off that one of the vanguard communities, whatever this is going to mean, is Liverpool but the Big Society team have decided not to talk to Blackburne House – the well known Liverpool-based social enterprise of which Dove is CEO – but given the reaction of Liverpool Council, her assessment seems reasonably accurate.

Also taking a turn in the direction of scepticism is Social Enterprise magazine editor, Tim West, who is still upbeat about some of the possibilities offered by the Big Society but dryly points out that it has now been launched at least three times without any clear explanation of what it’s going to be or do – and he also wants to know how social enterprise can actually get involved.

My overall position on Big Society is fairly similar to Rob Greenland’s. I don’t think it’s socially useful for social enterpreneurs to become either wide-eyed devotees of government policy initiatives or cynical opponents of those initiatives. We should always be open to engage with government to achieve positive social outcomes and to ask challenging questions of government to try and get them to deliver policies that make more positive social outcomes more likely to happen.

The early months of the new government period in office have seen many figures in the social enterprise lobby pursuing a PR strategy not entirely dissimilar to what the government’s been doing with the Big Society itself.

Not disconnected either as, while the government promoted the idea that the Big Society would somehow enable us to experience massive cuts in public spending without things getting extremely unpleasant, the lobby jumped on their bandwagon and explained that the social enterprise was the way to make this happen.

This changed slightly last week when Andrew Lansley published his health white paper which, whatever else it suggests, definitely doesn’t suggest that the exisiting social enterprise movement is going to be playing a major role in shaping the future of the NHS.

Now it seems that the Big Society initiative – while possibly promoting socially enterprising activity – may not involve taking a major interest in the ideas and experiences of the existing social enterprise movement.

I predict that this week’s outbursts are just the beginning of the gradual detorioration of the relationship between the government and the elements of the lobby who subscribed to the ‘our time has come’ rhetoric.

The problem is that our time hasn’t come. Ignoring the broader questions about the economy as a whole and focusing on public service delivery, with a few honourable exceptions in its current state most of the social enterprise movement can’t match the private sector for delivering services cheaper or the big players in the mainstream voluntary sector for delivering services a bit cheaper backed by a social ethos.

Given that the government needs to get some quick wins in the next couple of years, we’re not really the biggest players here. The government understands this, the social enterprise movement needs to understand it too, and get on with the job of pragmatically delivering positive social change.

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Banking on rhetoric

Those of us who turned up to the recent RBS SE100 awards were treated to a classic political anecdote from the new Minister for Civil Society, Nick Hurd. Roughly paraphrased, the anecdote went like this: a few weeks ago I met a man in Wales, he was running this project for the local community, it’s been running for a few years and it’s really good. I asked him what would’ve made things easier for him when he was getting started. And do you know what he said to me? He said: “I wish someone had backed us and given us some money.” That’s why we’re creating the Big Society Bank so that people who want to do good in the community and want some money, can have some money.

Exciting social investment bank rhetoric is not a specifically Tory phenomenon. Anyone who heard Labour’s previous incumbent as Third Sector Minister, Angela Smith, talking before the election will have heard similar anecdotes with was then the Social Investment Wholesale Bank cast in the role of hero. The Tories are indeed opening The Big Society Bank for business in April 2011. It’s not yet clear what the bank will do. It’s possible that it will partially replace Futurebuilders, the scheme that has been providing loans for organisations who want to deliver outsourced public services but which the new government is closing. ISAs have also been mentioned.

It’s definitely not too early to predict the Bank’s function in rhetorical terms. At this stage, I can solemnly predict that several key lobby figures will, from April 2011 onwards, make repeated and bountiful use of sentences along the lines of: “As CEO of <insert organisation here> I successfully lobbied for the creation of the Big Society Bank which ensures investment in the communities that need it most.”

And, even more solemnly, I can predict that at least two conference speeches this year will contain a phrase along the lines of: “We are creating the Big Society Bank to effectively channel resources to those who are creating real change in local communities.”

Unfortunately, for both Labour and the Tories (I’m sure the Liberals are also keen) the boring practical details have been a side issue. To an extent that’s because that’s their job. Politicians and sector leaders are primarily there to tell you why thing should happen or are happening, not to fathom out or even necessarily understand how they work.

But the Social Investment Wholesale Bank/Big Society Bank is an idea that’s been knocking around for a couple of years and has been a significant part of both major parties ‘offer’ to the Third Sector/Civil Society (delete as appropriate). It’s been trailed on and off platforms at every conceivable sector conference and seminar and equally lauded and slammed in the pages of sector journals. All without any clear plan for what it will actually do. (Just) some of the many outstanding questions include (in no particular order):

  • Is the Big Society Bank going to be purely a wholesale bank or will it be offering some banking functions directly?
  • Will it be providing cash to specifically defined social organisations or for socially good projects?
  • Is the cash going to come from ‘unclaimed assets’ or from the government?
  • Will the end result be more money available to social enterprises or (with the ditching of Futurebuilders) the same amount or less?
  • Are there really significant numbers of viable social enterprises out there who could sensibly take on loan finance but aren’t getting it from existing institutions? – I’m yet to see any meaningful evidence that this is the case, although I accept and support the call for more equity cash and similar funding.
  • Underpinning all of these questions, what specifically will be achieved by a Big Society Bank that can’t be achieved by supporting existing social finance organisations without setting a big, shiny new thing?

The fact is that the pushing forward of ‘the thing’ – for both major parties and sector leaders – continues with no coherent emergence or even reference to any practical proposals and explanations of how these proposal, to the limited extent that they exist, relate to need. This leads me – I hope wrongly – to conclude that their main priority behind it is the creation of a big, shiny, new thing rather than practical solutions to the challenge of financing social change.

The floor (or the bottom of the blog) is open for cleverer and better informed people to explain to me why I’m wrong.

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Civil wrongs

While no one would question the positive social commitment of the signatories to this letter defending ‘civil society’ from attack at the hands of pesky politicians, some queries might be raised about the wisdom of their intervention. The construction of straw men in order to push them over is neither a new nor especially shocking device in political debate but – proving the social enterprise movement is determined to be different – this letter constructs a straw man then leaves it standing.

The straw man is that politicians (and others) who have expressed doubts about the Big Society agenda are opposed to civil society. Whether or not you they choose to use the label ‘civil society’ there are no politicians anywhere near getting elected to anything worth running in the UK who think that citizens participating in the running in their communities is a bad thing in principle.

No serious politician would disagree with this broad thrust of this statement (even if the final statement might mean different things to different people):

“Citizens can and should be allowed to be active in their community by participating in local groups to make simple but significant changes in their square mile every week and not just every five years – for example by lobbying to get new pedestrian crossings put in to save children from being killed, by forming neighbourhood watch groups to tackle crime, by deciding the spending priorities of their local council.”

Where there is an important debate is around the role of civil society in delivering both social change and publicly-funded services, relative to the role of the state in doing so. So, this is a slightly more contentious position:

“Even in relation to more complex challenges, while it can be tough for citizens to run hospitals and schools single-handedly, they can and should – with help from social enterprises as well as the state – have much more of a say and be allowed to deliver and commission aspects of local services where they can and where there is demand.”

but it’s also a disingenuous one for a number of reasons.

One reason is that the group most passionately opposed to the idea of the combination of citizens and social enterprises running schools and hospitals is not politicians – in reality, all the main parties are currently offering slightly differently flavoured but practically similar options for how citizens can run their own services after the election – but trade unions.

Trade unions – with millions of members and democratically elected leaders to represent them – have at least as good a claim, possibly a better one, to represent civil society than individual social entrepreneurs or people who run social enterprises.

But more disingenuous is the apparent suggestion that scepticism about the likely benefits of a ‘Big Society’ or John Lewis-style approach to running schools and hospitals somehow reflects a broad-based cynicsim about or opposion to all community-based activity.

Politicians and unions aside, amongst others within the social enterprise movement, Rob Greenland and Rod Schwartz have – in a thoughtful and positive way – raised serious queries about the Big Society agenda and the potential role for social enterprises in delivering public services.

Sadly this letter doesn’t respond to these concerns or even meaningfully acknowledge their existence. Instead, it offers a crude ‘them and us’ choice between the view that civil society can solve all our problems and the belief that it doesn’t exist, while blithely equating support for civil society with support for outsourcing of public services.

I’ve got no doubt that the intention of the signatories is to show support for people working hard to make their communities better places for themselves and others, unfortunately the effect of it is to suggest that some social entrepreneurs and leaders of self-styled ‘civil society’ groups believe that their ideas are so clearly correct that neither politicians nor other groups in civil society should have the gall to question or challenge them.

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Marked down

The difficult start for the Social Enterprise Mark continues with challenging coverage in the new issue of Social Enterprise magazine. While I always enjoy reading Social Enterprise, we don’t always have the same outlook on things.

On the issue of the Mark, though, I entirely agree with Tim West’s editorial (page 11 of the print edition). West describes his feelings on witnessing the launch of the Mark at Voice! 2010: “I came away understanding that there was new brand for social businesses to try on. But I didn’t fully understand its aims or how it was going to achieve them.”

Later, West pointedly notes that: “Right now, the Mark company won’t say what targets it has – either for social enterprises signing up, or for the number of people it hopes will offer support as a result of the marketing behind it. The conclusion one is tempted to make is that either there are no targets, or they don’t want to set themselves up for failure by revealing what they are.” Indeed.

The lengthy feature by Gemma Hampson that accompanies the editorial reveals projected public and Big Lottery spending (roughly 50/50) on the Mark amounting to over £964,000 between 2007 and 2011. To be fair to those involves, this hardly makes the Mark the new Millennium Dome but it seems a lot of money to have spent on getting to the confused, confusing position that West and Hampson outline.

While, the Phone Co-op now does seem to be eligible, the 2009 Social Enterprise of the Year, One Water, isn’t. There’s clearly some sense behind RISE CEO Lucy Findlay’s comment that: “With various changes to their constitution One would be eligible… It’s a really a good opportunity and we would welcome them, but we have to make sure the rules are the same for everyone.”

If you’ve done lots of research and come up with some rules for a kitemark, hopefully for clear reasons, you can’t just junk those rules to suit one organisation. The problem is Findlay’s statement seems to wildly over-estimate the value that the Mark can currently offer organisations.

Given that One has so far funded £3.5 million of spending on social causes through selling on the open market through shops, its Directors may rightly wonder what the Mark – currently unheard of amongst the general public and not even supported by all major UK social enterprise umbrella bodies – will do for them.

For now at least, the credibility that One Water would give to the Mark is considerably greater than the credibility that the Mark would give to One Water. I’m not as big a believer in the munificent power of markets as the lobby but if the Mark really operated on the market basis that the lobby claims that it will, they wouldn’t need to spend much time pondering why One don’t want to change their mem and arts to get the yellow squiggly circle on their water bottles.

But the biggest current problem isn’t that the Mark can’t accommodate all organisations, it’s that it lacks a coherent message about what it can and will do for those who do fit its criteria. In Gemma Hampson’s article, even the Mark’s supporters (and holders) refer to the broad aim of informing more people about social enterprise rather than expressing any ideas about how the Mark will actually make that happen.

I’ve had their sales email and it tells me:

“The key benefits of holding the Mark for your organisation include:
–          It is proven that customers/commissioners would rather buy  from a company that helps society and the environment

–          Mark holders have competitive advantage

–          It’s more than just a logo, giving access to a valuable network of contacts and information

–          And, it’s easy to apply for (max 1 hour), through our new online website – just check http://www.socialenterprisemark.co.uk&#8221;

When two of the four selling points for a new project are defensive ones – against the accusations that it’s a just a logo* and takes ages to apply for – then you get the feeling that confidence is not high in Mark world.

Of the other two ‘selling points’, the first is a general point not directly connected to the Mark – we can and do already communicate the social benefits of our products and services to customers – and the second is a highly subjective one not backed up by any specific evidence – maybe it’s available if you have time to go and look for it.

I’m not a supporter of Mark in theory. But that discussion is over and the Mark is here. Given that it’s here it needs to develop a meaningful message to social enterprises about its ability to communicate a meaningful message to public and private sector commissioners and the general public who buy stuff.

*It’s likely that being ‘just a logo’ would actually be better than being a logo that places major restrictions on how you operate but doesn’t deliver any commercial advantage.

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Which side are you on?

The workers at social enterprise transport company HCT are on strike. HCT’s CEO, Dai Powell, is unhappy. He says that “It is becoming abundantly clear that the trade union movement – and Unite in particular – have a real problem with social enterprise.”

Unite probably wouldn’t disagree with this assessment. In general most trade unions think, correctly, that one reason why politicians love social enterprise is that outsourcing public services to social enterprises can be a way for governments to axe the jobs and downgrade the pay and conditions of people providing public services while not taking the blame for doing so. It’s not worse than outsourcing to a profit-making private company but it’s not necessarily any better. Most social enterprise/ trade union relationship begin at this fairly unpromising starting point.

Powell believes that: “This language of adversarial labour relations is from a different era and a different business model. As a social enterprise, our business model is based on the needs of a broad range of stakeholders: our staff, but also our service users, our communities and our broader mission.”

Rightly or wrongly, the adversity clearly is taking place, and the accusation of outdated militancy isn’t especially modern itself.

More interesting, though, is the implication that social enterprise is a different business model. The are clearly philosophical difference between HCT and conventional for-profit transport providers but it isn’t obvious why that the fact that shareholders are not amongst the stakeholders of HCT in itself changes the relationship between company and its employees. Powell’s position seems to be that workers should alter their demands for wages and conditions in the interests of the community (as represented by HCT).

There may be instances – in all sectors of the economy – when it is a good idea for workers to moderate demands for a wider purpose. The danger of Powell’s apparent position is that he could be construed as suggesting that workers should moderate their demands just because their employer is a social enterprise. It’s not surprising that unions find that position unpalatable. It’s no more realistic than saying that workers should moderate their demands because their employer is the government (which, after all, is a much larger not for profit organisation run for the benefit of the community).

For all the pluck exhibited by: “Alternatively, by its abject failure to recognise that social enterprises are different in form, function and purpose to regular companies, the trade union movement will become the vanguard of capitalism in the public sector.” Powell fails to disguise the clear underlying message ‘boss tells workers not to strike’. Most trade unionists are used to bosses telling them not strike. For all its passion (and for all HCT’s undoubted good work) I doubt this article will change many minds within the trade union movement.

The overall position of hostility is a shame because there is scope for partnership between social enterprise and trade unions. In the coming years, there’s a fair chance that social enterprises and trade unions working together to deliver public services could be a much more positive alternative them some of the other options on offer. But there needs to be movement from both sides to make that happen. Social enterprise has to do more than just assert its goodness and expect unions to fall into line.

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Bury your head in the brand (debate)

There’s nothing that excites social entrepreneurs more than discussing the meaning of social enterprise. And there’s nothing that excites the social enterprise lobby more than the idea that everything would be all right if only the general public knew what social enterprise is. Neither of these situations are either bad or surprising in themselves but I can’t help thinking that ‘brand wars‘ is shaping up to be one of the most pointless policy debates in the world, ever.

A committee has been set-up to discuss whether the social enterprise trade mark developed by Rise should be rolled out nationally as it is or split into three tiered trademarks: a top tier of organisations who meet a series of strict conditions as to what a social enterprise is; a middle tier of organisations who think meeting a series of strict conditions on what a social enterprise is is a nice idea but not nice enough for them to do it themselves; and a third tier of people who don’t have a business but drink Cafedirect and never take foreign holiday without planting five trees in the back garden first.

Already, some people are up in arms. In the linked article, social enterprise developer, Geof Cox, wants to know why ‘they’ want to ‘straight-jacket us’. They don’t, Geof. They want a hook for some publicity campaigns and some funding applications to enable them to do more publicity campaigns – if you don’t want to sign-up to whatever the official version of social enterprise ends up being they’re not going to make you and it’s unlikely to have any major effect on anything you’re doing.

Back in the real world, the debate doesn’t really matter either way to anyone whose actually doing social enterprise. If the conditions for being an official social enterprise turn out to be in line with what our organisation already does and wants to do already then it’ll make sense to sign-up and get some useful publicity. If they don’t, then we’re not going to be changing our approach to satisfy the whims of the social enterprise lobby, who are mostly very lovely people but are neither our paying clients nor our stakeholders.

My instinct is that, unlike Fair Trade or being a Social Firm, the notion of social enterprise is far too subjective and disparately delivered to be usefully trademarked. The brand debate is an interesting intellectual exercise but it certainly shouldn’t be allowed to become a distraction from the ongoing challenges of keeping on paying the bills while doing something socially useful. But it’s going to run and run and run.

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