When the Wall Street Journal write about social enterprise, and write about it negatively, it seems everyone notices. I blogged my initial reaction to it previously in this post, but the reaction since, and the debate it has provoked, warrants a further mention.
Leading the charge is the Social Enterprise Alliance, the Social Enterprise Reporter here and here, followed swiftly by Nonprofit Board Crisis, and Xigi. There’s plenty more (see this link to view the 50 or so posts linking) comment, mostly from the US / Canada. There’s a whole range of opinion, mostly centering on the organisation (SEEDCO) that produced the report that the WSJ article is based on: ranging from "SEEDCO deserves credit for publishing a case study of their own business failure" to "Seedco, one of the least informed and most inept players to have dabbled in the nonprofit Social Enterprise field". Difficult to judge from this side of the Atlantic, but both may be true.
By all accounts, the original report (the Limits of Social Enterprise) is worth a read, and is more balanced than the article, which is pretty one-dimensional and un-thought through. SEEDCO focus on one aspect of social enterprise/entrepreneurship (non-profits starting up a business arm) and use their failure to extrapolate more widely….which is always a little tricky. Nevertheless, I think there are lessons / messages / points to wrangle with here for the UK scene, even if it’s just a reiteration of ones we already know. Here’s a few quotes from some of the blogs, for example:
- "We already know that the purpose of social enterprise is to accomplish a social mission, not to change from being a nonprofit"
- "While improved self-sufficiency, efficiency and quality are certainly
key social enterprise goals for most entrepreneurs, no one touts social
enterprise, earned income or business practices as a magic bullet"
- "Sustainability is not just about earned income or self-sufficiency"
- "The report only seems to use the term Social Enterprise to include existing non-profits that start a revenue generating business"
- "People entrenched in the status quo are threatened by new ideas as they
gain momentum, so these attacks are a good thing and a sign that we are
- "Viewing social enterprise solely from the perspective of
the for-profit world misses the social goals of nonprofits, where the
primary measures of success are social outcomes"
- "Growing numbers of nonprofits are…embracing social enterprise in order
to diversify revenue streams, increase independence, improve overall
capacity and advance more mission"
- "Blind faith (and adherence) to one ‘pure’ model, whilst turning down
other [funding] opportunities to achieve impact, isn’t entrepreneurial, it’s the
opposite" [OK, that was me]
I think this gives a flavour of why we should be paying attention to the debate; because it covers a lot of the key issues: mission vs. money / business model as magic bullet / sustainability is about more than income / social enterprise as spectrum / the movement challenging commercial business / measurement is king / diversification of revenue / entrepreneurialism vs. blind faith in model…..
Not to mention the wonderful use of the phrase "advance more mission" which is a new one on me.