The Financial Times on social enterprise


The Financial Times carried a piece on social enterprise last Thursday, which somehow crept past our eyes, entitled "When the good struggle to be great". It covers the mighty GreenWorks, and attempts to wrestle with two key questions (which won’t be new to many of you…):

1) What exactly constitutes a social enterprise?
2) How can such businesses achieve the scale needed to meet the expectations being heaped on them?

The first is an old thorny argument: social entrepreneurs choosing the models most effective to them achieving their outcomes, or social enterprises being defined by their business model. As if to elucidate this issue, the FT article mentions CafeDirect, Big Issue and Fifteen, none of which are a CIC, a Co-op, a social firm, a DTA etc….but a Plc, a private limited company and (I think) another company (the Fifteen website says that the charitable arm, the Fifteen Foundation, "effectively owns the restaurant"). I’ve probably said enough on definitions to last a lifetime but would only add that the issue for me is transparency; we trust CafeDirect because it is clear that 86% of its profits go back into their social initiatives; we trust Fifteen because it is clear that all profits go to fund the work. And so on. A CIC does lock in assets (and prevent takeovers?) but it’s not necessarily a barrier to unethical practices, or a direct route to the most effective social impact.

Interestingly, Gordon D’Silva (of Training for Life) is quoted as saying that “a lot of rubbish about 55,000 successful social enterprises”, the government’s estimate, and it’s certainly true to say that there is a fair amount of scepticism about that figure. And there’s mention of a web toolkit for budding social entrepreneurs which we look forward to. It’s also interesting that Gordon talks of "sharing knowledge" as a means to scaling the industry, rather than necessarily expanding his own organisation to the hilt.

It’s just frustrating that a major piece of coverage in the mainstream business press should focus on what is, really, a bit of a tired debate. Yes, some focus on the individual making change and some focus on the model/structure. Some more on the social impact and some more on the (financial) sustainability….but there is room for all of them and more, and the less time spent debating these internal issues and the more spent delivering on the promises the better.

Share Button

Comments are closed.