Ask any ‘thought-leader’ in charity or government how to combat social exclusion, and social enterprise is rapidly mentioned as the way forward. Certainly the UK government is sold on the concept – new funding streams; an entirely new legal form, the community interest company; and now its very own day (November 15), as we report below.
At Briefing, we’ve long argued that companies should take a good look at the concept. Back in 1996, the Charities Aid Foundation started Investors in Society, as a vehicle to provide loans funds rather than donations to charities with viable commercial projects. It’s gradually grown, thanks to support from Barclays, NatWest and a few others, and today it’s the independent Charity Bank.
But most corporate investors in the community have not embraced this funding model. Maybe they prefer the old simplicities – business is business, charity is charity, and the donations budget is just that. Making an investment, and eventually getting the money back to be reinvested, is outside the comfort zone. The strict definition of a social enterprise is a business with primary social objectives, where profits are reinvested for community benefit not paid out to private owners. It’s true, too many are really charities pretending to be businesses and thus doomed to fail. So a healthy dose of scepticism is needed here. And – let’s be realistic – outside a kibbutz, the prospect of personal reward from business is always going to be a more powerful motivator than the common good.
Still, the SustainAbility report is in effect warning mainstream businesses that enterprises with that added ingredient of a social mission can be powerful competitors in both markets and in growth areas like the so-called ‘bottom of the pyramid’. So whether it is re-examining your business model or simply re-engineering your community programme for added results, we still say – take a good look at the potential of social enterprises (while keeping your feet firmly on the ground).
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Growing opportunities
Partnerships between business and social entrepreneurs could be the solution for the world’s socio-economic and environmental challenges, according to a report launched by SustainAbility. Growing Opportunity: Entrepreneurial Solutions to Insoluble Problems, a survey of 100 social entrepreneurs around the world, found that most of the people surveyed were interested in working with business. The main conclusions of the report were:
The social enterprise sector is growing but is still small;
Access to capital is the main challenge;
The potential for solutions to global problems is significant;
There is an appetite for partnering with corporations;
There must be a focus on government and changes in public policy.
The report was the first in an annual series of surveys conducted by SustainAbility in partnership with the Skoll Foundation and was financially supported by Allianz and DuPont.
More money is needed for a “robust” social investment market to exist by 2012, according to the Charities Aid Foundation. The Venturesome Model is a 5-year review of Venturesome, CAF’s social investment initiative, and outlines the learning that charities and social investment initiatives can take from its success. The model assesses overall financial risk and balances this risk with the social impact. Future challenges for the programme as well as the social investment sector are also considered.
The UK government has called for 20 social enterprise ambassadors to form part of its Social Enterprise Action Plan, which aims to raise awareness of the sector. They will commit their time to events and media engagements culminating on November 15, Social Enterprise Day.
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