The School for Social Entrepreneurs

Philanthrocapitalism and new clothes

One of the frustrations of recent events I've attended has been the common assumption that what comes from business into the social sector must be "better": venture philanthropy will revolutionise philanthropy, coherent investment-style metrics will revolutionise social impact, risk investment, social stock exchanges and loan funds will provide liquidity for the sector, and social enterprises will scale up in order to meet the challenges they face. Etc.

As regular readers of this blog will know, SSE's view of social entrepreneurship is an inclusive, broad-based one, not one that insists that social entrepreneurs must "have large-scale impact" to warrant the label, nor one that insists that social entrepreneurs must "earn income and trade", nor one that thinks impact is only delivered by an organisation's services, and not also through its operations in the round. For us, at its simplest level, social entrepreneurship is about entrepreneurial individuals applying themselves for social / public benefit rather than solely personal gain.

Further to this, the sector an organisation comes from, its legal structure, or its financing is not a guarantee of efficiency, quality, greater impact, excellence or even, in some cases, competence. Measurement in this sector is more difficult, intangible, and (at times) nebulous than the financial bottom line. Venture philanthropists have a more sensitive, complex role than venture capitalists....and so on. In reality, there should be knowledge transfer and learning between sectors (and always has been); indeed, the action learning process that underpins the SSE programme was originally pioneered in large companies for senior management. And, when 'business-like' is equated with more professional or making best use of its money (and people), then no-one has an issue with that either...

But, currently, it has felt rather one way (though I wouldn't wish to generalise: there are those who have a much more nuanced understanding all along the spectrum): and focusing more on business practice in the social sector, rather than achieving greater social equity and transformation. Hence my welcome for Paul Farmer's remarks at the Skoll event recently. And hence also my interest in this new book by Michael Edwards: Just Another Emperor? The myths and realities of philanthropcapitalism. It looks at the application of business practices to the social sector / philanthropy in great detail and, as far as I've read, speaks much sense, as well as provoking debate. I won't go on too much more, but would recommend starting with the transcript from the launch downloadable here, and I'll end this rather long post with a short quote from that which gives you a flavour of the argument:

"[Another] area where philanthrocapitalism claims to make an impact is in
improving the financial and the management capacities of civil society organisations.
However, I’ve always been confused by the way venture philanthropists and social
entrepreneurs differentiate themselves from the rest of civil society on the grounds
that they are “results based” or “high performance”, implying that everyone else is
uninterested in outcomes. Now sure, there are mediocre citizens groups, that’s true,
just as there are mediocre businesses, mediocre venture philanthropists, mediocre
social entrepreneurs and mediocre government departments. So why import the
practices of mediocrity into the social sectors, is Jim Collin’s conclusion, of Good to
Great fame.

What separates good and bad performance has very little to do with
business thinking or involvement in the market. What separates them is whether
they have a clear focus to their work, strong learning and accountability mechanisms
that keep them heading in the right direction and the ability to motivate their staff, or
volunteers, to reach the highest collective levels of performance. There’s no evidence
I know of which proves that business thinking, or business experience, can generate
those advances more effectively than experience in other sectors."

   

Friday round-up: audio, aggregation, and alltop

It's been a while since the last round-up, and lots to link to and write up.

- Will write more about this shortly, but the Ambassadors have started to blog....and there is an uber-feed you can sign up to for all of them combined (http://feeds.feedburner.com/SocialEnterpriseAmbassadorBlogsFeed). Early days, but starting to happen....

- Details of the next Social Enterprise Research Conference announced

- Free audio file from Stanford Social Innovation Review from their Social Entrepreneurship Day, which I shall be listening to on the way home...

- Podnosh has an interesting post on "Why should leaders blog?"; check comments also...

- SSE graduation in London on March 14th (a week today); if you haven't got an invite, and think you should have, then get in touch.

- US article about entrepreneurship and social change (in the Tennessean, no less)

- Updated research from CAF on Social Enterprise in Practice; haven't had a chance to read, but looks very interesting both on the challenges to the sector (quote from PR: "Social enterprises are unlikely to achieve financial sustainability and it is unreasonable to expect them to do so") and on what is needed in terms of measurement and support. Will follow up on this......

- Sally Reynolds is held in high esteem in the sector for her work leading Social Firms UK, and they continue to take an approach focused on quality and delivery; new trade directory of social firms is now online, and their Star Social Firm quality mark is also taking hold. Interesting to hear her discuss the other day how they could develop quality standards for social firms because they are more tightly defined / structured (see definition of What is a social firm?) than the diverse and varied spectrum of social enterprise.

- Related to that spectrum-like nature, NCVO are "unhappy with the government definition of social enterprise", according to this Guardian article on their new 'civil society' approach. I do hope we're not entering a period of definition debate.........

- Social Enterprise Magazine has relaunched (more developments on website to follow), and, IMHO, looks a country mile better in design, focus and content. Massive congratulations to all involved in making it happen and promoting it so effectively: Tim, Claudia, Deniz and the team. Look forward to encouraging our students and Fellows to read and get engaged with it....

- Greed offsetting. Really?

- Interesting Business Week article on the profits (social and financial) of CSR

- And finally, for all your non-profit blog needs, here's Nonprofit.alltop.com; single page aggregation is the future?

Have a great weekend, one and all....

The importance of a citizen base

In my second full week with the SSE I've become increasingly aware of the many SSE Fellows who are out there, still keeping their projects sustainable and still causing positive change. On the tube this morning I was reading the Global Ideas Bank's  "500 Ways to Change the World" and it really occurred to me how many different people have original solutions to various problems. While the book was edited and compiled by Nick Temple (Network Director at SSE) , the content was created by people who have recognized a fault  in  society and  have an idea  to fix it : 'ordinary' people suggesting social innovations.

The fact that so many want to help, and have such ideas, bodes well not only for the future of the SSE model, but also similar projects such as Ashoka's much welcomed CBI Initiative. While not in Britain quite yet, (although on the way: it's made it to France ) the Citizen Base Initiative seeks to alter "old funding strategies" and aims at helping citizen sector organisations to think differently about utilising resources, revenue streams etc, so that they can become more self-sufficient/more vibrant/less dependent on erratic funding. CBI tries to help the citizen sector break from traditional funding bodies and the state.

In essence, It's about a wider view of stakeholders and how they (your organisation's citizen base) can help access different types of resources, and help provide support. Very much in line with the view that social entrepreneurs create change through building networks, teams and movements, rather than as heroic individuals (see previous post on this subject)

Corporate social responsibility and inflection points

At the CAF Companies and Communities awards event yesterday, there was some interesting debate and discussion about CSR, the way it is changing, and how there has been a shift over the last two years in the way that it is viewed by the corporate sector. John Humphrys hosted (and gave out the awards later on: congratulations to all the winners) and was endearing in his contrariness. The most interesting insights for me came from Mark Kramer from FSG in the US, and I particularly enjoyed one graph he showed that looked as follows:

[click to enlarge]

Profit (or probability of profit) is on the y-axis, and consumer awareness (over time) on the x-axis. The red line represents profit from 'harm', and the green line profit from 'cure' (see below). The circled area is the inflection point.

Basically, the graph shows how companies reach a point where their ability to make money whilst still 'harming' or creating a problem (eg polluting, deforesting) becomes superseded by their ability to make money from 'curing' or creating a solution. Recognising the point where this happens (for each product / service / activity) is a key challenge for companies....or at least for those where this way of thinking can be applied. It also got me thinking that you could apply a similar graph from the charity point of view, with social impact on the y-axis: and the inflection point would be where the charity's ability to change things through campaigning against corporates is superseded by their ability to make change by working with them.

Obviously this isn't true for all, but it's an interesting lens to look at this issue through. Particularly if one considers that social enterprise and social entrepreneurship might be viewed as operating at those respective inflection points from their inception.

Will the private sector discredit or absorb social enterprise?

These (discredit / absorb) are two opinions of the private sector: social enterprise relationship I've read recently.

The first was from Cliff Prior, CEO of UnLtd, who was reported (in this Third Sector article) as making the point that "social enterprises are in danger of being discredited by private sector imitators" (aka profit-making businesses adopting a social enterprise model). Nigel Kershaw (of Big Issue Invest) rebutted this with "if you are transforming society, it doesn't matter what you are".

The second was from Julia Meek on Catalyst's Social Business Blog (Social Businesses: Victims of their own success?). In this post, she discusses the trend for mainstream businesses to adopt the approaches of social businesses, and then adopt them wholesale at a much bigger scale. Or, as Julia puts it:

"These supermarkets, electricity suppliers, market leaders and others have been able to watch the market and let social businesses prove the effectiveness of their various approaches. On observing a successful one the companies have been able to leverage their infrastructure, human capital, market positioning etc. to adopt it quickly themselves, marketing ’social’ products and services to the same target audience and at a lower price than can feasibly be offered by smaller, social businesses."

This is partly a conversation about scale: can social businesses ever break the 'ethical glass ceiling', as Julia's colleague puts it, and get the necessary investment to compete on more equal terms with the big boys? Does it mean that the best way for social businesses to make change is to pioneer/prove and hope for adaptation by the mainstream? (an approach often seen in the public sector and web 2.0 alike). She then posits 4 potential approaches, around quality, brand, partnerships and acquisitions. Well worth reading.

---

On the first, I partly agree with Cliff, in that just adopting a model / particular legal structure proves nothing, and this is a problem. This is as true for PCT's hiving half of themselves off into a CIC (excuse acronym-itis) and then commissioning that 'new' half, as it is true for the private sector. Unless the primary mission of an organisation is a social one and the initiative is driven by a social entrepreneur / team of socially entrepreneurial leaders, then its motivation can always be called into question. But we see social entrepreneurs operating across all sectors, and that is where I agree with Nigel: ultimately, moving forward, there will be this increasing blurring of boundaries, and what will matter, as I've posted before, is:

- the quality of the work/activity/product
(reputation / measurement / evaluation / provenance etc)
- how well this is communicated
(brand / voice / connections to stakeholders etc)
- the transparency with which the organisation operates
(mission / finances / governance etc)

Regardless of the legal structure chosen, these will be key things for all organisations operating across this field; from enterprising charities through to socially-responsible companies.

It's interesting to relate the second post to the 'six practices of high-impact non-profits' (which I mentioned here), in that one of those practices was to 'serve and advocate'. If the pioneering role of social business in getting ethical / fair / green / social practices adopted by the mainstream is seen through this lens of advocacy, then maybe that helps place it in a slightly different context. Also, as I am bound to say in this context, the assumption is also there that social enterprises and the like want to scale up. As the Small Business Blog posted the other day, "69 percent of small business owners said that they prefer to have their business remain small.” If that is true in the private sector, surely the same can be said of the third sector / social enterprise movement as well? (If not more so, as 'small and beautiful' is a mantra to some).

And surely the movement should be proud to be influencing and changing the mainstream in the way that it has: how satisfying, however imperfectly done, to see big supermarkets pushing fairtrade coffee, to see Fiji water pushing its carbon neutrality, to see M&S put out its Plan A...none of which would have been achieved without hundreds of activists, campaigners and social entrepreneurs, and none of which we could have said even one, two, three years ago. Where we are strongest is in demonstrating, through quality practice and delivery, that things can be done differently....and that they are better done that way.

Friday round-up: microcredit, RED, leadership, Harvard et al

Friday round-up, and there's a fair bit after inactivity this week:

- good Worldchanging post on microcredit and the ongoing debate about how effective it is; the argument seemed to be saying that entrepreneurship and enterprising people were needed to change things: access to finance alone was not enough (which is undoubtedly an argument we'd hold to over here as well); well worth a read, and a topic that is not likely to go away...

- Intelligent Giving follow up on the RED campaign (after it got a kicking in the press); not sure I totally agree with their take, but difficult to disagree with: "If you like RED products, buy them, but don't pretend you're giving to charity. We're talking pennies here....." and they have some interesting information about the charity that benefits too....

- the Harvard Social Enterprise Conference has been happening; someone kindly rounded up those who were blogging from the event, though they did miss one or two other interesting posts. Both of which see progress or "the ball" moving forward....

- we attended the Third Sector Leadership Centre Provider Forum on Monday; we're in their directory and they have an interesting interim report on action learning sets for third sector leaders (free registration needed); obviously we've been at that for a decade... ;0)

- Yunus saves the world with yoghurt....

- ...and We Are What We Do with a bag

On that bombshell, we bid you farewell for this week.

Fair trading, fair tracing

As a brutally strong coffee sits before me, I cannot let fairtrade fortnight pass without mention. There've been plenty of supplements and recipes and articles flying around the media this week. Most interesting for me was probably this morning's interview with Penny Newman, the CEO of CafeDirect (in the Guardian). Interesting for the insight it gives into how the company has grown and evolved, and for their plans for diversification (international, new products, not-at-home market). This suggests that the direct retail in supermarkets is not where they see fast growth lying...although their new branding and products look more like Nestle and Kenco than the more aspirational, high-end brand of old (Machu Picchu and the rest). Like the logo though.

Penny also mentions towards the end of the article that she would like to mentor more social entrepreneurs. Certainly, the SSE Fellows mentored by her have benefited enormously from her experience, so we hope we can broker more such relationships in the future.

A final, related note on an idea that I ran across via the Doors of Perception conference taking place in Delhi: Fair tracing. The core of the concept is to use digital tracing technology to enhance the credibility fo the fair trade model. It's a brief glimpse into the future of supply chains:

"At each stage of the product’s journey, information may be added and/or edited and, if the information is stored digitally on the internet, may be of various multimedia types. The ability to access this rich information at the point-of-sale will empower the consumer to make an informed comparison between competing products before finalising his/her purchase."

[Worldchanging has commented on the idea as well, which is worth a read.]

Ethical business and business ethics...

Social ROI blog updates us on the progress of the RED campaign, the big one that sells specially branded products (phones, credit cards etc) in order to raise money for AIDS charities. Apparently, it has only raised $11 million in the past year. Obviously that is a substantial amount of money, but given the companies/celebrities involved, it's not really much at all. Particularly given the amount of money committed to international work on AIDS worldwide (in the many billions). I wonder how much might have been raised if all those companies and stars had donated 1% of their annual income instead of putting it on the consumer.....probably a little bit more.

Meanwhile, the private equity storm continues. As mentioned here previously, there are a few links with the social enterprise world, via Permira and Ronald Cohen/Apax (who founded Bridges Community Ventures/Unclaimed Assets), for example, so it will be interesting to see how it all pans out. Interesting because the primary issue seems to be around transparency and accountability to stakeholders, which is what social enterprise is, at least partly, all about. And because the backlash could be seen as part of a wider consumer and user-led movement demanding greater accountability and ethical backbone in companies. It could, of course, also be seen as old-fashioned union-led action against the paymasters. Take your pick...

Finally, it's been difficult to open a paper without Sainsbury's or M&S banging their fairtrade credentials drum.....and M&S has started up an ethical investment fund, which surely puts to bed any remaining questions about their commitment to this area. They clearly believe, simply, that this is the way forward...how many more will follow?

Your Ethical Business + SSE

When we were undergoing our re-branding (the final part of which, the website, will be coming soon), we did discuss whether we should change our name. Why? Because people get misled by the word 'School', and assume we are an academic institution delivering taught content/programmes. When, as anyone who knows us will tell you, our focus is on action learning and personal support: learning by doing, and gaining confidence and self-esteem, as well as business skills and knowledge, to achieve personal and project development. But some people don't get past the word 'School'....

Anyway, as you will have noticed, we never got that far down the line of a name change, given the track record of the organisation, its reputation, and so forth (the agency who suggested the name 'Spark' will remain nameless; although if we ever diversify into soap powder, we may revisit). One of my former colleagues, Matthew Thomson (now at the London Community Recycling Network), suggested cunningly that we should change it from School FOR Social Entrepreneurs to School OF Social Entrepreneurs, making 'school' the collective noun for social entrepreneurs, like...er...whales. And making clear that we are representative as well as service-driven.

Why am I burbling on about all this? Because I was asked to give feedback about a new book, Your Ethical Business, which is being launched in March. It aims to be "a 'how to'  handbook covering everything you need to know about starting and succeeding in an ethical enterprise" and it's pretty good: clear, coherent, and covering all the main areas. But, as you may have already guessed from the above, we are mentioned only as delivering 'academic programmes' and bracketed with accredited university courses, rather than listed as a deliver of business support in the (otherwise very good) resources directory. Very frustrating and, given that all our literature/website makes clear that our ethos/aproach is the exact OPPOSITE of an academic programme, I can only assume it is because we are called 'School'.

Rant over. The book is a good introduction to the field, and worth adding to your reference library, although it does make out that it's all rather easier than is really the case. I would have put a few more lines in about the need for personal support, support networks, work-life balance and so forth which we have seen emerge as key issues for social entrepreneurs over the years. The only other comment I would give is that, as someone said to me recently, entrepreneurs (of all types) have a drive and spirit that can't be gained from a book and, if they're a true entrepreneur, they probably won't have time to read it anyway.....

Global Cool...but not in school

Steve Bridger heralds the arrival of Global-Cool over on his nfp2.0 blog. I'm not sure how to describe it really. The website is kind of celebrity offsets meets change-the-world-in-simple-ways meets ecotainment. Or something. Here's the (very well-designed) site for you to make up your own mind. It's a pretty clear and good addition to what's out there already, although nothing groundbreaking as far as I can make out. There may be those who want the Scissor Sisters to tell them to turn their lights off, and if it reaches more people in a clear and entertaining way, then all power to them. Of course, there may also be those who question why, from a £20 donation, £3 goes to Global Cool Productions Ltd and £1 on administration. That's 20% of your donation not going to alternative energy/energy-reducing projects.....(the admin's fair enough, and the production company will "put on more carbon-neutral shows and make more programmes to create a bigger noise to turn more people into planet-savers").

[Incidentally, it's founded by the guy who founded Future Forests as it was then called....]

I'm not going to bang on about whether it's ethical to offset or not; you can read plenty of stuff about that in every paper under the sun. But it also seems to me to be connected to something else Steve mentions in his article: that the UK government are going to distribute a copy of Al Gore's Inconvenient Truth documentary to every school in the country. Now, of course it is important that children are educated about the challenge of global warming and climate change; and of course it is important that this is communicated in effective ways. But is this really necessary? Aren't kids, in fact, the one group of society that DO fully understand, having had it drilled into them consistently at school in geography, science etc....? Several articles recently have detailed how children have started campaigning at home, prompting one parent to write in to a school saying, "Can you please inform Paul that it is allowed to have the light on to read at home?" Does that child really need to watch Al Gore?

The fact is that sending out DVDs is just information provision; but the point has already tipped: you can't move for environmental debate, recycling schemes, offsetting of flights, healthy organic food, and so on. It's not information and promotion of the cause that is needed, surely; it is action and, probably, legislation. How about ministers committing to a set (collective) number of flights per year? How about taxing companies who won't match M&S zero carbon initiative? What about the Global Cool people giving £19 of the £20 to carbon reduction, instead of more publicity and programmes? What a better example it might set for them to walk the walk, rather than talk the talk. The point is that it is not easy (we have these debates in this organisation as well), but has to be addressed. David Miliband is strong in the department, communicates and debates well, and has a lot of good ideas (individual carbon quotas etc.) but it would be great to see some of them, challenging as they are, put into action.