Monday, August 25, 2008

A Social Enterprise By Any Other Name?

Speaking Up was mentioned last week by Debra Alcock Tyler, CEO of the Director of Social Change, as an example of a charity seeking to rev-up its own profile by adopting the brand of `social business' as opposed to the `for good' brand-leader, that of `charity'(

Debra's argument runs a bit like this. Charities are `for good'. Businesses are `for profit'. Anything in the middle confuses the poor old public who don't like their heads being messed with. Social firms are really charities. They should 'fess up to this rather than pretend to be something else. Period.

Sorry Debra, but the times they-are-a-changing. Although you are not alone in seeking to conserve the status quo, the world is fast moving on. Old ideas (like charity) are having to hold their own against new ones which the public quite like (eg. social business). We are in a period of transition that will only be apparent when we look back in a few years time.

So rather than accusing us of finding new words for old ideas, Debra needs to ask a deeper question: `Why is the concept of charity is slowly but sureley losing traction with both the public and those seeking to change the world?'.

Here are three reasons why social business is not a reheated version of charity.

Firstly, social business is, at its core, about self-help and entrepreneurialism as a vehicle for change rather than relying on the charitiable goodwill of others. Social business is a very different thing than charity, a Victorian concept which has its origins in the idea of doing good works unto others-less-fortunate.

Charity has its place - don't get me wrong - but its very much of the 19th and 20th centuries, not the one we're in. People now seek empowerment not alms. Trade not aid. Rights not charity etc. The concept of charity, I'm afraid. is pretty much exhausted. The `brand' will follow.

Secondly, social business is based on the idea of exchange: offering services in a market place. These services may have a social purpose, but they are are voluntarily purchased by a third party and bring with them an obligation of delivering to the customer.

Again, this is very different to charity where the idea is that you are given money to serve the objects of the charity. The line in the sand is clear.

Thirdly, and perhaps most importantly, the social business sector is dramatically expanding the boundaries of the `for good' sector well beyond the closely guarded borders protected by the traditionalists of the voluntary sector.

This little republic is highly conservative, perceiving a 'for good' sector which is very small in relation to both public and private sectors.

We in social business just don't accept this lack of ambition. By contrast, we believe in building a much bigger and more diverse `for good' sector. This means casting the net a lot wider beyond the usual lines of demarcation.

On one side, we embrace progressive for-profit businesses that make a difference, as well as profit. As Tim Smit says, the world's problems are too big to be left to charities. Without business on-side we might at well give up.

This progressive, environmentally-aware business sector is growing all the time and should be encouraged rather than treated with ultra-scepticism.

On the other side, we encourage charities (like Speaking Up) which are moving away from a charitable model to a business model that enables far more reach than if it stayed reliant on grants.

This model has seen Speaking Up grow from £0.5m to £4.5m in five years and help 4000 rather than 400 people. Its genesis was the leverage created by marrying third sector passion with the private sector methods brought to us by the Impetus Trust, a group of former venture-capitalists.

But the tired `three silo' world-view (for-profit, public-sector, charity) represented by Debra is instinctively suspicious of anything like this. For Debra, it seems, you are either on the side of the angels (a charity) or in league with the devil.

OK, perhaps that's a little harsh. But business isn't there just to supply tax for public services. This is to ignore its potential as a force for change.

Now for my potshot: What is most delicious to me is how voluntary sector stalwarts like DSC are actually fast-becoming more like social businesses than they would care to admit.

I feel proud when I see how much more they are relying on trading income and contracts and how they become more business-like with every passing year. Particularly as governement grants dry up and market opportunities open.

In fact DSC so getting good at social business that someone should consider entering them for this year's Upstarts Awards!


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