News and commentary from the February/March edition of Corporate Citizenship Briefing, issue 104
Cabinet Office: Social enterprises will be at the heart of the new economy
On 11 February Liam Byrne, Minister for the Cabinet Office, set out a new era of influence for social enterprises as he announced steps to harness the sector to help Britain get through the economic downturn. Measures designed to aid aggressive growth in the social enterprise sector will be drawn up at a Social Enterprise Summit co-hosted with Business Secretary Lord Mandelson. The summit will focus on areas such as the expansion of the sector in public services provision with the aim of creating 25000 new jobs in the social enterprise sector “over the months to come”. Contact: The Cabinet Office www.cabinetoffice.gov.uk
Sharp rise in volunteering applications
The number of applications to volunteer more than doubled in 2008 across the UK, according to figures released on February 11 by charity YouthNet. The charity attributed the sharp increase in applications – from 26,185 in 2007 to 60,621 in 2008 – to the economic downturn and new attitudes to volunteering. “This is an unprecedented increase in numbers, and a sign that volunteering is becoming more accessible and attitudes are changing,” said Fiona Dawe, chief executive of YouthNet. The charity suggested that people are turning to volunteering as a means of keeping busy, helping those less fortunate, and gaining valuable skills to improve chances of re-employment. Contact: YouthNet www.youthnet.org
Third sector leaders band together on tax issues
Leading figures from the National Council for Voluntary Organisations, Association of Chief Executives of Voluntary Organisations, the Institute of Fundraising, Charity Finance Directors’ Group and the Charities Aid Foundation attended a meeting on February 12 with the Financial Secretary to the Treasury, Stephen Timms MP, to discuss proposals for further progress on gift aid reform and to address the issue of irrecoverable VAT. HM Treasury have confirmed they will look to complete research into the issue of gift aid and higher rate tax payers and will be in position to consider possible changes before the 2010 budget in order to support the sector at what is likely to be the full depth of the recession. Contact: Charities Aid Foundation www.caf.org
Abbey Charitable Trust launches free PR guide to aid UK charities
Abbey has recently launched a guide to PR for the third sector, which aims to help charities as well as voluntary and community groups get the most out of promoting their work to potential volunteers and funders. The free guide, developed by Abbey’s Charitable Trust and PR professionals, helps charities make the most of PR opportunities. With the help and support of charity communication officers, the practical advice contained within the guide provides an introduction to media relations, from interacting with corporate PR teams to hosting journalists at events. Contact: Abbey Charitable Trust www.abbeynational.com
Google chief for charity steps down on revamp
Larry Brilliant, the executive director of Google, announced on February 23 that he would step down from managing Google’s philanthropic unit and signaled that Google.org might curtail its financing of nonprofit groups unless they are closely aligned with Google projects. The announcement represents a shift in Google’s approach to philanthropy. Dr. Brilliant wrote on a Google blog that he and others at Google had been reviewing Google.org’s progress in its three years of operation. “During our review it became clear that while we have been able to support some remarkable nonprofit organizations over the past three years, our greatest impact has come when we’ve attacked problems in ways that make the most of Google’s strengths in technology and information,” Dr. Brilliant wrote. “By aligning Google.org more closely with Google as a whole, we will ensure that we’re better able to build innovative, scalable technology and information solutions”. Contact: Google.org www.google.org
Triodos Bank’s social enterprise and charity lending goes to record level in 2008
Triodos Bank announced on February 24 it increased lending to charities and social enterprises by £20 million in 2008, bringing its total lending to the sector to a record £93 million. For the first time, the bank – which only finances charities and businesses delivering social, environmental or cultural benefits – is lending over £200 million in total. Lending requests from the third sector and social enterprise organisations, have continued to be exceptionally high in 2009. This comes at a time when most high street banks are pulling back from lending to the sector, viewing them as too high risk in difficult economic times. Contact: Triodos http://www.triodos.co.uk/
Abbey and Age Concern share best practice
Executives from the retail bank Abbey and four Age Concerns across London, coordinated through Age Concern London, are taking part in a mentoring programme designed to share best practice in the private and third sector. The mentoring scheme was announced on January 29 and was established with the primary objective of sharing best practice during times of change as charities face increasing pressures from competition with the private sector and external economic uncertainty. Over the year the programme will involve personal and group mentoring sessions enabling participants to maximise the value gained from the programme and each other. Contact: Abbey National www.abbeynational.com
Comment
Social enterprises, which have long been supported by the Labour government, are currently benefiting from significant growth. Now contributing £8 billion to GDP, such organisations are being trumpeted as at the heart of the ‘new economy’.
This comes at a time when the economic crisis is calling many to question the role and purpose of more traditional forms of business enterprise. With scarce resources, and immediate social and environmental problems to solve, it is argued that the social enterprise model could represent a significant move towards a fairer world. The question is: Do social enterprises represent the change we require?
The central principle of a social enterprise is that it primarily provides social benefits, with profits mainly being invested back into the organisation in order to achieve its objectives. This process is done without the need to maximise profit. When run with ethics and integrity, such an enterprise can be seen to add true value to an economy and society. However, there may be a danger of companies being set up under the social enterprise banner, only to go on to maximise profit for its owners. Without proper safeguards determining what can (and cannot) be labelled a social enterprise there could be a real problem. Furthermore, even enterprises true to their original social aims may struggle to make a meaningful impact given their lack of impetus to grow to a scale of efficiency that would allow them to take on large government and private sector contracts.
There are problems to overcome and downsides to acknowledge with social enterprises. However, these sThird sectorhould not stop us from trying to make this ‘new’ form of capitalism part of a successful transition towards a more equitable society.
The social enterprise model works within current economic structures, which suits our need for fast change. With proper regulation and support, social enterprises could have a real, immediate and lasting positive impact.
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