Tag Archives: social enterprise mark

Another defined mess

Anyone who’s ever been a ten-year-old child who enjoyed telling people interesting facts will know that, according to someone or other who’s definitely right, you’re never more than six feet away from a rat.

Similarly, anyone who’s ever been to a social enterprise conference will know that, in such a setting, you’re never more than six minutes away from the social enterprise definition debate. At Social Enterprise Question Time, a series of Question Time-style events that my company, Social Spider CIC, organises in partnership with the School for Social Entrepreneurs, we ensure that ‘How do you define a social enterprise?’ is the final question put to the panel at every event. Not because it’s an interesting question but because, if we guarantee that panelists will answer it at the end, they can’t be asked to answer it during the rest of the event (and, in doing so, bring to an end all discussion on social value, scaling up or whatever the overall topic of the discussion might be).

This week, we have the bizarre news that someone has decided to launch a rival to the Social Enterprise Mark. I’ve had my say on the Mark in the past and, while having great personal respect for the individuals involved and their dedication to positive social change, my views on the (lack of) usefulness of their product to either social enterprises or their customers remain unchanged.

Whether or not they actively object to the Mark or have just never heard of it, the vast majority of social enterprises in the UK have not applied: based on the most recent figures I’m aware of, fewer than 450 social enterprises have the Mark. Earlier this year The Cabinet Office claimed that: “Britain alone has over 180,000 social enterprises, generating £55 billion for the economy“.

It’s anyone’s guess who most of these 180,000 social enterprises are or where they might but whatever the ‘true figure’ is, it seems slightly bizarre that Milan Pastor, founder of Fairbusiness, is claiming, in an interview with Social Enterprise Buzz, that his new rival accreditation is necessary to challenge the Mark’s ‘monopoly power in the UK’.

In a narrow sense he’s correct, the Mark is currently the organisation that offers organisations the opportunity to call themselves a certified social enterprise as its only product. That said, Social Enterprise UK (my organisation is a member) offers members the opportunity to call themselves a social enterprise, along with a range of other benefits, for less money.

While Michael Porter is referenced on his website, Mr Pastor unfortunately doesn’t seem to have made it to the chapter of Competitive Strategy that deals with substitution.

Membership of Social Enterprise UK is one obvious substitute for buying the Social Enterprise Mark but others which potentially work just as well are registering as a Community Interest Company or, in the vast majority of situations, just telling people that you’re a social enterprise and explaining what it is you do.

There’s no evidence that customers – either public sector commissioners or people buying stuff in shops – have any greater desire to buy goods or services from an independently certified social enterprise over an organisation that calls itself a social enterprise that does have a certificate. Mr Pastor is challenging the Social Enterprise Mark’s monopoly power over a market that doesn’t (currently) exist.

Mr Pastor may, of course, succeed in creating a market, but he offers no evidence as to what entitles him to certify social enterprises beyond liking social enterprise and having set up a website. While a key selling point of the Fairbusiness certificate is that: ‘An annual membership from Social Enterprise Mark for a business with income between £500,000 and £1,000,000, for instance, costs £550, compared with £320 from Fairbusiness’, £320 seems quite a lot to pay for a bloke with no specified credentials to give his opinion on the social nature of your business.

That said, I don’t necessarily believe that Mr Pastor’s view on whether your organisation is a social enterprise has significantly less commercial value to a social enterprise than mine or the Social Enterprise Mark Company’s. They’re all equally valueless.

Potentially more interesting was last week’s suggestion from Big Society Capital (BSC)’s chief executive, Nick O’Donohoe, reported by Third Sector, that: “We need a clearer definition of social enterprise.

In turns out that ‘we’ in this instance is ‘BSC staff and corporate social responsibility specialists’ trying to get corporates to buy products and services from social enterprise. O’Donohoe explained that corporates: “… want to hire social enterprises and invest in social enterprises,” but “… they worry that they can’t identify them easily.

He added, possibly with a slight glint in his eye, that: “It’s fine for people in the sector. They can look at an organisation and tell at a glance whether it’s genuinely focused on a social mission. But for those who aren’t specialists it’s much more difficult.

Having already agreed with O’Donohoe once in recent months, I’m not going to say he’s necessarily right in this instance but I do think the idea of a government-backed social enterprise registration – available to organisations with a wide range of corporate based on a simple set of conditions – is worth considering, possibly as an extension of the remit of the CIC regulator.

As with charity registration, the function of social enterprise registration would not be to prove that an organisation is a successful social enterprise, so many of the conditions specified by both Social Enterprise Mark and Fairbusiness would be irrelevant, but it would show that an organisation had met a set of basic legal requirements around ownership, profit distribution and social purpose.

I’m supportive of O’Donohoe’s desire to help more corporates get social enterprises in their supply chain but an equally useful outcome from social enterprise registration would be that government departments seeking to fund or contract with social enterprises wouldn’t have to redefine social enterprise every time they set up a funding stream or enact a new law. That said, I’ve assumed that politicians and civil servants like doing that and that that’s why they’ve avoided a legal definition in the past.

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Have cake and eat it strategy abandoned due to lack of bread

“The social enterprise sector spends a lot of time justifying itself by using the estimate of that there are 68,000 social enterprises. But it doesn’t question, firstly, whether the figure is accurate and, secondly, if it is, what the figure actually shows us.”

At first glance this may appear to be a quote from another needlessly pedantic blogger or academic, questioning the honourable attempts of the government and the social enterprise lobby to spread the good news about the inexorable growth of social enterprise in the UK. At second glance, it is in fact a quote from Lucy Findlay, Managing Director of the Social Enterprise Mark Company.

The estimate that there are 68,000 social enterprises in the UK comes from the Annual Small Business Survey (ASBS), conducted by the Department of Business, Innovation and Skills (BIS).

This is the criteria by which BIS decide whether an organisation is a social enterprise:

  • no more than 75% of turnover is generated from grants and donations
  • no more than 50% of any surplus is paid to shareholders (or never generate a profit
  • the business owner thinks of the business as a social enterprise, and
  • the business owner thinks the business is a very good fit to the definition “A business with primarily social/environmental objectives, whose surpluses are principally reinvested for that purpose in the business or community rather than mainly being paid to shareholders and owners”?

A previous ASBS found that there were 62,000 social enterprises in the UK and this figure was used prominently what was then the Social Enterprise Coalition now Social Enterprise UK (SEUK) and the New Labour government for several years.

When Lucy Findlay says that ‘the social enterprise sector’ doesn’t question the accuracy and meaning of this figure she’s either short of information or using a narrow definition of the social enterprise sector that excludes me, some of the UK’s leading social enterprise academics, and leading social enterprise support charity, Unltd.

The problem isn’t with the ASBS – which provides credible statistics based on clearly explained criteria – but with the fact those statistics have been prominently promoted by social enterprise support organisations that define social enterprise by very different criteria.

So, the criteria for Social Enterprise Mark holders are:

A. Have social and/or environmental objectives

B. Be an independent business

C. Earn 50% or more of its income from trading

D. A principle proportion (50%+) of any profit made by the business is dedicated to social/environmental pruposes

E. On dissolution of the business, all residual assets are distributed for social/environmental purposes

F. Can demonstrate that social/environmental objects are being achieved

So far, 462 organisations have been awarded the Social Enterprise Mark.

Regular readers may be aware that I’m not really a big fan of the Mark but despite my own opposition to the venture, I very much admire Lucy Findlay for her dedication and committment to a project that she believes to be socially useful. I also partly sympathise with her predicament on this point.

While Social Enterprise UK’s current team are not responsible – and those who werre responsible were clearly acting with the best of intentions – it is deeply regretable in terms of the credibility of the sector that the organisation that was then the Social Enterprise Coalition, as a co-owner of the Social Enterprise Mark company, found itself in the position of simultaneously promoting two significantly different definitions of social enterprise – one of which was purportedly the method for social enterprises to ‘prove they are genuine against a set of qualification criteria’.

It’s equally regretable for the Social Enterprise Mark Company, who have found themselves theoretically trying to sell their product to a clearly-defined target market of over 60,000 organisations when in reality the vast majority of those potential customers would be turned away if they attempted to buy the product. Of course, the chances of the Mark project receiving £964,000 worth of grant-funding from the combined pockets of Big Lottery and the government may not have been enhanced by a realistic assesment of the scale of social enterprise, as defined by Mark supporters, at that time.

At this point, we can be quite clear that there are at least 462 social enterprises in the UK and that there may be hundreds of thousands more than that, depending on your chosen framework for definition. In the 2009 – 2011 period, I found it difficult to understand how so many otherwise sensible people in the social enterprise lobby could justify the apparent ‘have your cake and it eat it position’ that there was need for significant government spending on supporting social enterprises but less than 462 social enterprises – less than one per parliamentary constituency – worthy of support. Even being charitable, this position apparently involved believing that over 60,000 organisations were waiting to apply for the Social Enterprise Mark and would do so once they got around to it.

No there is no money for social enterprise support – and the current government has no desire to promote ‘the social enterprise’ as a model – so the ASBS figure, though its meaning is entirely unchanged, is now virtually irrelevant. On the plus side, it means that what’s left of the social enterprise lobby is free to get on with promoting the social enterprise as a diverse social movement in all its glorious, hopeful messiness.

 

 

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We are on the brink of a new era, if only…

Anyone who was hoping the 2012 was going to be the year when we finally forgot about the social enterprise definition debate has, unfortunately, only had seven days of hope before their expectations were cruelly dashed.

The first contribution (at least the first one I’ve read) on the matter this year comes on the Guardian Social Enterprise site where Declan Jones contributes a piece on ‘The Trouble With Not Defining Social Enterprise’.

Jones definitely succeeds in succinctly explaining a widely perceived problem: “Avoiding definition has also allowed social enterprise to be co-opted by others. We now witness public sector municipalists and private sector opportunists masquerading as social entrepreneurs. The former are zealous mini-state status quo defenders. The latter want to make money on their investments. Neither group are social entrepreneurs but both are nifty and inventive when it comes to using charitable, trust and social enterprise business structures and models when it suits them.

I share Jones’s view that if a council hives off its leisure services into a not-for-profit company and fills the board of that company with either local councillors or council employees, the entity that’s been created is not what I’d consider to be a social enterprise – for me, it’s a vehicle for wielding power without taking democratic responsibility.

I don’t share Jones’s view that the involvement of people who want to make money from their investments, in itself, prevents companies from being social enterprises but I would agree that it’s not helpful if the term social enterprise is used to refer to conventional private companies operating in a social sector, such as A4E.

What Jones doesn’t manage to do in his article, at least in a way that I can make out, is explain how these problems would be solved by a new definition of social enterprise.

The Social Enterprise Mark, an attempt to create an opt-in definition of ‘a social enterprise’ permitting a wide range of organisational structures, has not been successful. After two years of trading, the company is still some way from signing up 1% of organisations who self-define as social enterprises.

If a once and for all definition was worthwhile, one way would be to create a company structure – or series of structures – unambiguously called ‘social enterprise’. The then new Labour government could’ve done that when it launched Community Interest Companies but chose not to.

Another similar but slightly different option would be to create a form of registration along the lines of registered charity – registered social enterprise – whereby organisations could be registered as social enterprises on the basis of fulfilling particular structural and reporting criteria, and be regulated by a ‘social enterprise commission’, the equivalent of the Charity Commission.

Neither of these options is likely to be pursued in the near future but even if they were – and therefore all organisations were definitely either ‘a social enterprise’ or something else –  this wouldn’t stop council’s managing services through ‘not-for-profit companies’ rather than ‘social enterprises’. And while The Guardian and politicians have called A4E a social enterprise, it describes itself as ‘a social purpose company’ –  a definition of ‘a social enterprise’ wouldn’t prevent that (even if it were desirable to do so).

Aside from perceived badness that clear definition wouldn’t stop, I’m not clear on the benefits it would bring about. At the beginning of his article, before arguing for definition of social enterprise, Jones claims that: “Some social entrepreneurs eschew defining social enterprise because it is too awkward and troublesome. They prefer ambiguity and complexity because inclusion is seen as more important than differentiation.

That may be true for some people but it’s not my position. I don’t have a problem with definition that’s awkward and troublesome if it’s useful. It’s extremely important, for example, that running a hospital is clearly defined and regulated activity.

In terms of ambiguity and complexity in the social enterprise movement, I neither support nor oppose it but I recognise it as an inescapable reality. The previous government actively chose to chuck together loads of different businesslike approaches to social change under the banner of social enterprise. That may or may not have been a good idea but the result is that there is a wide spectrum of people in the UK who regard themselves as running, working for or buying stuff from social enterprises.

The definition debate will run and run. In my view, charters, kitemarks and accreditation can and should have a role in the social enterprise movement and individual social enterprises promoting themselves and their goods and services to customers, but a once and for all definition of ‘a social enterprise’ shouldn’t and probably won’t.

Some in the movement wish that we could stop talking about this issue. That won’t happen and I think it’s useful to have ongoing debate about what we’re doing and why. What we do need to do is ditch the believe that there’s some form of definition out there that would – in itself – transform our abilities to promote better ways of doing business.

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Rise (winds) up

In most cases, if a husband filing for divorce followed up that action by asking his wife whether she’d be happy to hand over the family home to his mistress, it wouldn’t go down too well. Bearing that in mind, it’s probably not especially surprising that (according to reports on Social Enterprise) members of Rise, the soon to be disbanded social enterprise umbrella body for the south west of England, have voted against transferring the organisation’s remaining assets to controversial accreditation scheme, the Social Enterprise Mark.

It’s quite possible that some of the members may now question whether Rise should have devoted less of its energies to developing the Mark, and more to developing social enterprise in the South West – in which case, those social enterprises might now be in a position to afford to support an umbrella body.

Clearly, though, Rise’s demise points to a wider problem in terms of regional support – the government was paying for it and is now not paying for it. Explaining the decision to close the organisation, Rise Chair, Andrew North said: “It is with great sadness that the Rise board of directors has been tasked with the closure of Rise, but with the demise of the South West RDA and a lack of government support for social enterprises, there is no other alternative. We hope that the network of south-west social enterprises, which Rise has been instrumental in growing, will continue to thrive.

While making clear – as I originally did over a year ago – that I believe (a) that the government’s claim to want an increase in social enterprise activity while failing to ensure the availability of specialist support lacks credibility and (b) that regional support organisations such as Rise provide an important service (the value of which may not be fully recognised until it’s not there), I do think there are number of important questions raised by the closure of Rise.

A report on the Civil Society website expands on the reasoning behind Rise’s decision: “Last year the government decided that all RDAs across England would close by March 2012. As a result the board of Rise has decided to dissolve, as there is no prospect of future business or direct funding. Rise’s most recent accounts show it has a healthy balance sheet with £389,744 in reserves, and a net asset value of £30,582.

It would be interesting to hear the thoughts of social entrepreneurs in the South West on Rise choosing to disband with a reasonable amount of money in the bank. As I understand it, there are other regional social enterprise bodies that run without any full time members of staff and I would be keen to know why Rise decided that it wasn’t worth investing some of their remaining assets in trying to establish a smaller, more sustainable operation.

It would be equally interesting to hear why Rise has taken the judgment that there is no prospect of sustaining their work through selling services to members. This amplifies a wider issue at the heart of the social enterprise support industry – I am not in any way implying that Rise, its staff or board members are either primarily or uniquely culpable – based on a culture of ‘do as I say, not as I do’.

Those of us who’ve cumulatively spent several days of our lives on the receiving end of earnest lectures from social enterprise leaders on the evils of grants and state funding – and the need to be a real business that sustains itself through trading – could be forgiven for wondering whether some of those same leaders could reasonably be expected to have a few entrepreneurial tricks up their sleeve beyond bemoaning the fact that the government is no longer giving them any money (part of which would be spent going round telling people to stop asking the government for money).

Four people are losing their jobs as result of Rise’s closure and many social enterprises will now not get the support they need. Those are bad things. One good thing that could happen as a result of the challenge faced by the social enterprise support sector would be a re-evaluation of the messages that organisations supporting social enterprise are putting out. There are activities that are socially valuable that can’t be funded (entirely) through trading activities. Ironically, this apparently includes helping people to do social enterprise. That’s nothing to be ashamed of but now might be the time to ditch the bluster, admit reality and have a serious think about how we can get stuff done.

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Lack of co-operation

I spent Monday and Tuesday at the third annual International Social Innovation Research Conference(ISIRC), hosted by London South Bank University. Amongst the wide range of exciting discussions taking place (which I’ll reflect on over the next few weeks) was the latest in a series of skirmishes over controversial accreditation scheme, the Social Enterprise Mark (the Mark). As I’ve mentioned before, I’m not really a big fan of the Mark but I’m beginning to think that the Social Enterprise Mark Company (SEMCO) often finds itself on the receiving end of a disproportionate level of ire as a proxy for wider problems that it’s in no way responsible for.

Roughly a year on from the post linked to above, there are now 440 Mark holders – a net increase of 165. This means Mark holders now represent 0.7% of the Social Enterprise UK'(SEUK)s estimated 62,000 social enterprises* in the UK. On that basis, the answer to Richard Patey’s question posed on Guardian Social Enterprise Network ‘Is the Social Enterprise Mark limiting social enterprise?’ is ‘no, no it isn’t’ because at least 61560 organisations are happily getting on with being social enterprises without holding it.

Patey, of consultancy Profit Is Good, has set up his own rival version of the Mark which is available free to all if they sign up to being part of: “a community of for-profit business which: 1) have an explicit social and/or environmental purpose and 2) are set up or reconfigured to create shared value for all.” Criticism of the Mark from the (to use an admittedly crude shorthand) ‘liberal wing’ of social enterprise is nothing new. There’s lots of people in the social enterprise movement who think that organisational structures are broadly irrelevant as long as organisations (or sole traders) are delivering the social goods. Patey bemoans the fact that: “The Mark’s strict interpretation of what constitutes a social enterprise means that it fails to encompass businesses which most reasonable people would say were social enterprises. One example is a fast-growing digital marketing consultancy called Yodelay.com whose business model generates income for charities but whose legal structure would not qualify it as a social enterprise.

Reasonable people are notoriously difficult to pin down but it’s definitely true that Mark’s key problem – in terms of the internal politics of the social enterprise world – is that it fails to encompass many businesses that the people running those businesses (some of whom are reasonable) self-define as social enterprises. This is probably true of most attempts to retrospectively define a diverse movement that already existed before the body doing the defining came into being. Either way, for many social enterprise ‘liberals’, the Mark is an attempt (as yet, not a very successful one) to rob them of their identity – whilst also discouraging others with similar approaches from joining the movement. Patey’s brand, on the other hand: “can be used by owner/manager ethical businesses right up to multinationals such as Nestlé, which has embedded the concept of creating shared value into its business model.

Unfortunately for SEMCO, while some in the co-operative movement might not advocate a social enterprise definition that extends as far as Nestlé, Tuesday’s debate at the ISIRC saw co-operative entrepreneur and academic, Rory Ridley-Duff offering a critique of the Mark that at least crosses over with Patey’s argument (with a response from SEMCO managing director, Lucy Findlay).

Referring to the discussion on the Mark’s Linked In group that prompted him to develop his alternative brand, Patey explains that: “At the last count, the blog had more than 170 comments, mainly from charities which are Mark holders arguing that they are businesses and that my business is not a social enterprise because it does not have profit distribution and dissolution of asset clauses, even though it has an integral social purpose.

Ridley-Duff explains his position on the Guardian site and at greater length in The Social Enterprise Mark: a critical review of its conceptual dimensions a paper presented at the ISIRC (which I have read in full but which is not currently available online due to a complaint from SEMCO). Ridley-Duff’s underlying position – based on discussions with his students – is that the Mark discriminates against co-operatives and in favour of charities, which amounts to a rejection of the social enterprise movement’s co-operative roots: “Co-operatives and their support bodies were also vital to the formation of the national support network for social enterprise. Worker co-operatives, co-operative development agencies and the Co-operative Party acted together to create Social Enterprise London. National and regional social enterprise organisations, including those that formed the company to promote the SEM, were registered by the Co-operative Union. The umbilical cord that provides intellectual nutrients for social enterprise development is provided by the co-operative movement.

Imagine our shock that participants on co-operative and social enterprise courses identified trading charities and voluntary organisations as the most likely to meet SEM evaluation criteria. Whether course participants came from the co-operative movement, public or charity sector, the results were the same. All thought that trading charities were advantaged, and co-operative enterprises disadvantaged by SEM evaluation criteria.

Ridley-Duff’s broader point is that as the UK social enterprise movement has evolved (and responded to the needs of UK governments) co-operative ideals of ‘socialisation’ – democratic organisational structures and worker ownership – have been sidelined in favour of ‘social purpose’. Having a social purpose, in this sense, means organisations whose outputs are beneficial to society rather than companies structured in a specifically social way.

The upshot of this is Charities and Community Interest Companies can fulfill an external social purpose without giving their staff any say over how their organisation is run or even treating them with greater consideration than employees of any other organisation – and still receive the Mark.

On the other hand, co-ops that – through their democratic structures – allow members to distribute profits and dispose of assets in any way they see fit, as opposed to accepting the Mark’s specified 50% distribution limit and commitment that: “If your company ceased trading, remaining assets would be distributed for social/environmental purposes” would not get the Mark.

To an extent, SEMCO is responsible for its own predicament based on its one dimensional approach to PR. The opportunity provided by The Guardian for a reply to Patey’s article was used to issue what amounts to a bland press release which shows little evidence of actually being written after the article it purports to respond to. Even as someone who doesn’t support a generic social enterprise kitemark, I can think of plenty of question about the value of a social enterprise kitemark (Patey’s) available for use by anyone who self-defines as having a social purpose and commitment to shared value. The line: ‘Richard Patey thinks Nestlé is a social enterprise, is he quite sure about that?’ is ominously missing from Lucy Findlay’s response.

The possible suspicion that SEMCO are simply not interested in engaging in discussions with the wider social enterprise community is disproved by the fact Findlay chose to turn up and engage in a debate with Ridley-Duff and other assembled social enterprise academics. Having turned up, though, she might have done better to spend more time talking about the fact that the Mark team are currently working with trade unions and others to develop further criteria based on employee engagement – mentioned briefly at the end of her presentation – and less time rehashing the basic points about why the Mark needs to exist.

While anyone who’s ever tried to sell anything – particularly something they really care about – will understand SEMCO’s initial desire to promote the Mark primarily to people who share their assumptions about the axiomatic need for their product, the next version of their PR and marketing strategy really needs to deal with the possibility that there may be under 500 of those people running social enterprises in the UK, and that they also need to sell to people who need a bit more convincing.

Having read the paper and listened to the debate, I’m not clear what SEMCO have to gain from pursuing a complaint and therefore preventing further dissemination of The Social Enterprise Mark: a critical review of its conceptual dimensions. The paper is an important one but not so much for its specific criticisms the Mark as for the questions it raises for the movement as a whole. The Mark may be one of a number of institutions – including, for example, the Big Society Bank – that embody a government-sponsored shift from socialised enterprises to social purpose enterprises within the wider social enterprise movement but it’s hard to see how the existence of the Mark actually makes it harder for ineligible co-operatives to make their case.

Co-operatives, like the more loosely defined social enterprises promoted by Richard Patey, are free to call themselves social enterprises and apply for or adopt any badges or kitemarks that they want to explain their values to customers and other stakeholders. The Mark is a means for defining social enterprise that is currently of value to over 400 hundred organisations. Engaging more effectively with co-ops might be a good way for SEMCO to get some more customers for their produce without significantly altering what they’re trying to do. But there’s lots of really bad stuff happening in the world and the Mark isn’t responsible for any of it.

*I know, the figure is possibly not as robust as it might be.

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The Social Enterprise Mark – what went wrong

It’s always been my intention for this blog, where appropriate, to be robustly critical of negative developments within the social enterprise world but to avoid being gratuitously rude or nasty. I’ve been attempting to come up with a suitable response to the article from the Mark team in this month’s (generally very good) issue of Social Enterprise magazine but unfortunately, the Mark saga has now reached a point where it feels distinctly unpleasant to be stating the facts.

The Mark’s Marketing and Communications Manager, Lesley Foster, explains that nine months on from its launch as a ‘national brand’ there are now ‘more than 250’ Mark holders. Based on (Mark partner) the Social Enterprise Coalition(SEC)’s claim that there are 62,000 social enterprises in the UK, the Mark is still some way off signing up 0.5% of those eligible. With grant funding for the project totaling between £814,000 and £964,000, current figures (now reported by the SE Mark team as 275*) show each £99 Mark award being subsidised with at least £2,960 of grant income*.

With 275 social enterprises signed up, trading income equals £27,225*. At best this represents slightly over 3.2%* of the project’s turnover. Given that at least 50% of a Mark holder’s income needs to come from trading, the Mark team must now be contemplating the possibility that – even if the project receives a further injection of grant or government funding – it will be morally impossible for The Social Enterprise Mark Company to display the Mark on its own website after March 2011.

As mentioned previously, I’ve never been a supporter of the Mark. It neither tells commissioners about what organisations do and how they do it, nor tells consumers about the social impact of the products they buy (like, for example, the Fairtrade Mark). I’m remain willing to sign-up to a Mark that does either of those things but I see no benefit in buying into what a friend in the movement describes as ‘a bumper sticker that delivers no social impact’.

Despite my own opposition to the Mark, I’m genuinely surprised it’s been as unsuccessful as it has been. My hunch at the time of the its launch was that as many social entrepreneurs are optimistic people, keen to try and make the best of things, often against their better judgment, many would apply for the Mark as a gesture of social enterprise solidarity.

As it is, the speed and scale of the comeback necessary for the Mark in its present form to become a sustainable business would, if achieved, rightly see the Mark Company registered as a religion in the next census. The Mark has been a cock-up from start to (looming) finish. Given the resources expended, the number of social enterprises signed-up is significantly less than the number who could reasonably have been expected to have been engaged in lengthy one-to-one discussion on their needs during the market research stage. Instead, the Mark has been a political fudge – who can forget the darkly hilariously proposals for a three-tiered accreditation system – that failed disastrously to even fudge the politics of the issue.

A clue to the debacle may possible lie in the fact that the project was pushed forward by a “14-member social enterprise identifier project steering group that was set up to find a way to brand the sector with professional marketing advice from the government’s Central Office of Information (COI).” I’m sure there are some good uses for a 14-member steering group but I don’t think any of them are directly-related to starting a sustainable business.

Current SEC chief executive, Peter Holbrook, is not to blame for what’s happened. He’s loyally and honourably backed the Mark after finding it in his inbox on taking up the job this year but he will hopefully be able to play a role in both sorting out the mess and making sure similar mistakes don’t happen again. Between them, Rise, SEC and the late Office of the Third Sector have – with undoubted good intentions – cooked up an embarrassingly expensive dogs dinner. Most worryingly, the Mark saga demonstrates the failure of many in the upper echelons of the social enterprise lobby to understand either what social enterprises need or how social enterprise works in practice.

Recriminations are no use to anyone but it’s time for a bit of humility and a lot of listening. I hope that it’s not too late to salvage something from the mess. Maybe there’s still time for a new Mark product, developed in consultation with people running social enterprises rather civil servants and umbrella body executives and enabling social enterprises to better explain what they do to commissioners and/or customers, to be brought to market.

*Figures updated in response to new information provided by the SE Mark team.

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New strategy for Coalition?

It’s not just regional social enterprise support agencies that are operating under the shadow of looming cuts. In fact, things are looking at least as bad, if not worse, for the Office for Civil Society(OCS)’s strategic partners. Discussions about impending reductions in cash available and the number of organisations sharing that cash seem to be side-stepping the – hopefully important – issue of what the sub-department formerly known as the Office of the Third Sector (OTS) gets for its current annual investment of £12.1 million in 40 umbrella-type organisations. What we do know is that Nick Hurd wants to cut this outlay to ‘a maximum of £7.5 million’ in funding to ‘a maximum of 15’ partners – and that none of these organisations should receive more than 25% of their income through the programme. This suggests that Mr Hurd thinks nearly 40% of whatever it is is not very useful.

Social Enterprise magazine’s report highlights that Social Firms UK currently receives over 25% of its income through the programme but – certainly on the basis of its latest available accounts – this has until recently also been the case for the Social Enterprise Coalition which, in the year ending 2009, received £562,829 out of a total income of £1,969,532 for being a strategic partner. This amounted to over 28% of its income and – taking into account the Coalition’s role in delivering Social Enterprise Ambassadors programme – does not even represent the full extent of the Coalition’s financial dependence on the OTS/OCS let alone its dependence on funding from the state in a general sense.

As an organisation which, unlike regional agencies, doesn’t focus on delivering services directly to members and generates just £101,879 (or just over 5%) of its income from membership fees, it’s not surprising that the Coalition has operated more as a Quango than a membership organisation.

It has been very successful in pushing social enterprise as an idea to the top of the policy agenda – including partnering with Labour ministers to push the ludicrous idea that most people want public services delivered by social enterprises despite not knowing what social enterprises are – but spectacularly unsuccessful in leading the development of an actually existing movement able to tackle the challenges posed by the current economic situation.

The Coalition first persuaded New Labour politicians that social enterprise fitted in with their political agenda, then got stuck into the job of raising public consciousness about the the version of social enterprise that those politicians supported. The nadir of this approach was the launch of the Capacitybuilders-backed Social Enterprise Mark. Without rehashing the many practical criticisms of the Mark, the Coalition is ultimately responsible for the fact that the entire project was developed on a flawed premise – that what the social enterprise movement most needed was for more of the general public to know what social enterprise (or a social enterprise) is.

The Coalition’s own very good research shows that only 12% of social enterprises consider this to be an important issue for them. An organisation focused on supporting a movement rather than a reciprocal lobbying agenda would’ve looked into this beforehand.

The problem for the Coalition – a problem for all organisations – is that they’ve taken money for stuff that the then government wanted to pay for. And what (quite shortsightedly) the then government wanted to pay for was a lobbying organisation promoting the idea of social enterprise and not a membership organisation supporting the development of a social enterprise movement.

The result is that – at a national level – social enterprises do not have a membership organisation to represent their interests in the way that the CBI represents big business or NAVCA represents community groups but then we – social enterprises as opposed to taxpayers – haven’t paid for one.

So what happens next. It would be a shame if the OCS strategic partnership review leads to organisations such as the Coalition keeping funding for lobbying activities at the expense of smaller sub-sector bodies such as Social Firms UK than actually help grassroots organisations to create employment and organisations such as SSE that help social enterpreneurs to do social enterprise in a more general sense. Not least because the best way for people to find out what social enterprise is in a meaningful is for there to be more social enterprises carrying out useful activities in the community, and employing them, their friends and family.

In the current economic circumstances, a smaller Coalition, less dependent on state funding and less beholden to government agendas could become a more independent voice for social enterprises, helping them to tackle the practical issues they face – and ultimately be more useful to both the government and the social enterprise movement.

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