Lucy Findlay, Managing Director of the Social Enterprise MarkLucy Findlay is Managing Director of Social Enterprise Mark CIC – the only UK and international body to independently prove when a business or organisation puts profits towards social or environmental good.

The Social Enterprise Mark is for organisations which are committed to genuine social enterprise principles and want to verify their social enterprise credentials.

Lucy is publicly recognised by 2degrees as a Sustainability Champion and blogs on a range of topical issues affecting social enterprises.

Can ‘fairly traded’ really replace ‘Fairtrade’?

As the authority responsible for implementing the robust standards and independent accreditation processes of the Social Enterprise Mark and Social Enterprise Gold Mark, we were very sad to hear of the decision by Sainsbury’s to apply their own “fairly-traded” scheme to Red Label tea in place of the widely trusted FAIRTRADE Mark.

Much as Sainsbury’s is loved and trusted by its customers, this move risks opening the door to less reputable businesses creating their own in-house schemes. We are very concerned that this will lead to a proliferation of unsubstantiated social and environmental claims that will confuse consumers and ultimately erode their trust in all such schemes, far beyond the sectors in which Fairtrade operates. The extent of these concerns is apparent in the response to the petition on Change.Org on this topic which quickly attracted over 5,000 signatures.

As a labelling company ourselves, we know that considerable investment, expertise and commitment is required to develop and process robust standards. We are concerned that by Sainsbury’s controlling the certification of its own products, it will ‘water down’ the regulations to suit its own agenda.

There is likely to be confusion amongst consumers, who have come to recognise the FAIRTRADE Mark as independent proof that a product has met international Fairtrade standards. This trust has been built up over 2 decades.

For our part, we verify the claims of genuine social enterprises, by providing a trusted independent label to assure stakeholders that they meet common standards. The assessment process helps them to benchmark performance against the norms and encourages them to work towards best practice. The key to credible accreditation/certification is an external assessment process, which should be conducted by an independent third party. Only with a completely impartial and transparent process is it meaningful.

We therefore fail to understand why Sainsbury’s would choose not to support such a process in respect of its own products that meet Fairtrade standards, rather than upholding the principles of transparency and consistency that the FAIRTRADE Mark provides. This is, I am sure, a sentiment which is echoed by our network of Social Enterprise Mark/Gold Mark holders, and the wider social enterprise sector.

We offer our full support to Fairtrade, which itself inspired our own Mark, and stand by the importance of independent, credible, transparent authentic labels that consumers know they can trust.

Profiteering from the sick and dying…chapter 2

Another bonanza for the shareholders?

This blog follows on from a previous blog on this subject, published in 2014

My family and I have recently been subject to the vagaries of NHS system and the bewildering world of social care.  Like so many families when a loved one falls seriously ill, you take a dive into a parallel universe that you might have thought about, but suddenly get thrust into for real.  It starts with shock and confusion and pretty soon moves on to frustration at trying to find your way round a system that is supposed to put the patient first, but often fails due to being overstretched and managed by too many ‘cooks’.  I am aware, however, that in many ways we are in some ways more fortunate (if that’s the right word) than others in this situation – the illness is cancer, not dementia.  The NHS goes into full swing for us and we don’t have the added stress of to try to work out which care agency to use, how much it’s going to cost and how to pay for it.

The Conservative Manifesto suggests that in the future more social care will have to be paid for privately, if necessary by remortgaging any property without a financial cap.  I understand that there are pressures on the system, but what will the real cost be and who will be the winners if this policy is enacted?  It probably doesn’t take a detective to work it out, but one thing’s for sure, with an aging population there will certainly be profits to make.  The likelihood is that the private care sector will ramp up to fill the gap with little or no protection on costs from the government, along with equity release companies who will charge interest for the privilege of staying at home.  You only have to look over the Atlantic to see the impact that such private companies have on the lives of people who should be concentrating on caring for their loved one, rather than being stressed out about deciding which care/health company is good or bad, whether the insurance will cover it, and if not how to pay for it (possibly selling/remortgaging their house).

It is a shame that more creative and equitable solutions are not being considered in the future of social care as well as how to fund it – they do exist!  There is always a rush to look for a private solution, with the same old business models, which put their shareholders first.  The Manifesto talks about encouraging Public Sector Mutuals, but the current Government has made no real effort to encourage the formation of social enterprises that could reinvest profits back into the system as well as behaving more ethically.  The local community could even have a stake in such companies!  What is clear though is that if we are talking about delivery outside the state, then there is a need for regulation and a guarantee that people can have confidence that shareholder financial gain is not the underlying goal – profiteering from the sick and dying is inexcusable, morally questionable and one of the key reasons that the NHS was set up in the first place.

The rise of ethical consumerism: considering the impact of purchase decisions

Although it is heartening to see that consumers are increasingly looking at sustainability and ethical issues in their purchasing decisions, as evidenced by a recent international study by Unilever, I do worry about whether they are actually able to make an informed decision.  The proliferation of ‘greenwashing’ does mask and make buying decisions more confusing.

Greenwashing is the corporate practice of using clever PR and marketing claims to mislead customers into thinking a company and its products are ethical/sustainable/environmentally friendly etc. Sadly, the rise in consumer interest in sustainability and ethics seems to be marked by the rise of this tactic by big corporate brands.

This is a smoke screen for their anti-social behaviour, as has been evidenced time and again in the hypocrisy of the banking world.  I will never forget, on the passing of the Public Services (Social Value) Act, being lectured about what to do to add social value by a big name High Street bank, whose Chief Executive the week before had been apologising for yet another expose leading to huge fines by the regulator.

Another very high profile example is the Volkswagen ‘Dieselgate’ emissions scandal in 2015, where the organisation admitted fitting cars with software designed to give false readings in emissions tests. This served as a public reminder of the need to be vigilant for misleading messages – if a multinational giant that was once considered a leader in sustainability was deliberately deceiving customers, then it poses the question – who else is up to this dodgy practice??

Unfortunately, greenwashing isn’t always easy to spot, especially where there is an existing high level of consumer trust within a brand. Even where there isn’t trust, many consumers take claims at face value and do not question other behaviours of that company – people have short memories! There are so many ethical labels and claims used by brands to entice customers to buy their products, so where to start for consumers when it comes to knowing who they can trust?

This is the focus of our latest campaign – Beyond the Badge – which aims to help consumers identify genuine labels and claims, and therefore make more informed choices, rather than taking things at face value.  For instance if a product claims to be ‘fairtrade’ – did you realise that it is only certified as such if it displays the FairTrade Mark?

We are pleased to have the support of several high-profile partners, including Soil Association Certification and Ethical Consumer, to engage with a wider consumer audience across multiple sectors.

In our research , I was interested to come across the UL Environment ‘Seven sins of greenwashing’, which identifies seven of the most common greenwashing tactics used by big brands. Interestingly, these include ‘the sin of no proof’ – where a claim is not substantiated with any reliable proof – and ‘the sin of worshipping false labels’ – where the impression is given of a third-party endorsement, where no such thing exists.

To me, these seem particularly relevant to the markets in which we operate, as from its inception, social enterprise has been plagued with vagueness and moving the goal posts.  The advent of social impact reporting and social investment have not helped this cause as they do not support the uniqueness of the social enterprise business model – essentially that by putting people and planet before shareholder profit the business is focused on the social/environmental need that it aims to address.  It may be hard to prove – but the social outcomes are central, not a by-product.  Hence the Social Enterprise Mark – a way of assessing and identifying genuine social enterprises that have a proven commitment to trading for the benefit of people and planet.

We want to encourage everyone to consider the potential impact of their purchase decisions, and to think about whether brands that they support are actually living up to their ethical and sustainability claims. I invite you to get involved, by pledging your support to the campaign and spreading the word amongst your own networks, by joining our Thunderclap campaign, which will send an automated social media post out from your account to create a buzz of conversation about the campaign.

Fairtrade: A Mark of inspiration

The impending Fairtrade Fortnight (27th February – 12th March) led me to reminisce that the Fairtrade movement inspired the roots of our own accreditation system, back in the late 2000’s. Fairtrade is a global movement to secure fair prices, working conditions and terms of trade for farmers, producers and workers across the world. By guaranteeing a minimum price and a premium payment, which producers invest into their businesses and communities, Fairtrade gives people in developing countries the opportunity to improve their lives and plan for their future.

Fairtrade Fortnight is an annual campaign to increase public awareness of Fairtrade certified products, organised by the Fairtrade Foundation, an independent non-profit organisation that licenses use of the Fairtrade Mark on products in the UK. This year marks 20 years since the inaugural Fairtrade Fortnight campaign was launched in Scotland on 12th February 1997.

The credibility of the Fairtrade system is upheld by FLOCERT, which is coincidentally a Social Enterprise Mark holder. FLOCERT is responsible for independently certifying Fairtrade products and awarding the internationally recognised Fairtrade Mark; an independent certification that you see on a product that meets the international Fairtrade standards. This label shows that the product has been certified to offer a better deal to the farmers and workers involved. The Mark helps consumers to easily identify products that have met the required standards.

The Social Enterprise Mark was borne out of a similar need – to address the lack of robustness behind the term ‘social enterprise’ and the lack of a way to market social enterprise products and services. Social Enterprise Mark accreditation provides reassurance for customers and stakeholders that there is credibility behind claiming to be a social enterprise. Our two accreditation Marks – the Social Enterprise Mark and Social Enterprise Gold Mark – protect the integrity of genuine social enterprises and enable them to stand out from the crowd, as an externally assessed, independent guarantee of their primary commitment to using income and profits to create benefits for people and planet.

In very simple terms, the Social Enterprise Mark is the social enterprise equivalent of the Fairtrade Mark, providing a clear definition of what constitutes a social enterprise, and an instantly recognisable ‘stamp of approval’ to show that a business has been independently assessed and meets sector-agreed criteria to justifiably call itself a social enterprise.

With the Fairtrade Mark now well into its third decade, working with over 1,200 certified organisations worldwide, it is perhaps no surprise that 9/10 people now recognise and understand the label. Although, I am sure that maintaining and raising public and consumer awareness remains a key objective, hence the annual Fairtrade Fortnight campaign.

It has always been my wish that the Social Enterprise Mark will not only become as recognisable as the Fairtrade Mark, but that it will also stand for business that is striving to be really good at what it does, i.e. trading for people and planet. There are many challenges to this, as there are to any accreditation/labelling scheme, but it remains a key priority.

To this end, we are excited to be putting the finishing touches to a new campaign targeted directly at consumers, where we will be working in collaboration with several high profile partners. We hope that by working in partnership with other companies that share similar challenges of public perception and awareness that we can amplify our collective voice, to reach a wider audience across multiple sectors and demographics. We are planning to launch the campaign over the next few weeks and this will run into our conference in June, when we will consider the impact it has had in generating awareness and recognition.

Watch this space – more details to follow soon!

Celebrating 7 years of upholding the standard for social enterprise

On the  7th anniversary of the launch of the Social Enterprise Mark, I am reminded of how far we have come as a sector in that time, but also of how far we have to go in being truly recognised as competitive, sustainable businesses in the mainstream business world.

sem-homepage-buttonSince our inception back in 2010, Social Enterprise Mark CIC has endeavoured to ensure the social enterprise business model remains ethical, credible and commercial, through independent accreditation. As well as providing a single recognisable ‘identifier’ for genuine social enterprises, which are externally assessed against sector-agreed criteria, we work to promote the capabilities of social enterprises as a credible alternative to more traditional business models.

This is not easy by any means, especially when it comes to spreading the message to the public and consumers. However, there is clearly a shift change occurring in consumer attitudes towards the sustainability of brands and organisation, as seen in a recent study by consumer goods giant Unilever, which found more than a third of consumers now choose to buy from brands they believe are doing social or environmental good.

We are currently planning a new campaign, which will aim to encourage consumers to consider how they can be sure of the ethical/sustainable credentials of the organisations they buy from. By working with several high profile partners, we hope to spread the message to a much wider audience and to start a global conversation about how consumers can be sure brands are ‘walking the walk’ and not just ‘talking the talk’ when it comes to sustainability and their social purpose.

Another constant challenge is influencing government policy and embedding social enterprise within their mindset. I was interested to see PM Teresa May allude (albeit briefly) to her vision for an inclusive business strategy in the foreword of the government’s Green Paper on the Industrial Strategy: Building our Industrial Strategy. Although there was no direct reference to her recent Shared Society speech, the PM declared that the government wants to “move beyond short-term thinking to focus on the big decisions that will deliver long-term, sustainable success”.

As I wrote back in November in a post looking at the pressures faced by the public sector, tight financial constraints have been resulting in a rather short-term focus, where the bottom line has become of overriding importance, over and above what may be best for society in the long term. Social enterprises are rooted in their stakeholders and communities, and are therefore well placed to respond to the biggest issues facing society. They are set up to address a particular social issue or objective and this remains their driving, primary purpose for the long term – of course profitability is also important for the business to remain sustainable, but profits are used to serve the needs of social stakeholders and feeds back into their social objective.

As we begin our 8th year as the social enterprise accreditation authority, I am confident that we are moving in the right direction to achieving these goals, and look forward to what the next 8 years will bring.

Is the Shared Society all ‘Motherhood and Apple Pie’?

Theresa May’s recent announcement of a ‘Shared Society’, after all the fuss about the Big Society when it was launched, has been greeted with a healthy degree of scepticism, but it is worth having a look at the finer detail and trains of thought that lie within the speech.  Much of it is ‘motherhood and apple pie’, but there are some key themes that chime with me, as she was talking directly about social enterprises (albeit in a limited context of social finance).

Firstly, she highlights the limits of the cult of the individual and how social enterprises help to break this down.  For me, this is a fundamental point about social enterprises.

Social enterprises aspire to be more than a single founder or entrepreneur, however charismatic and publicity hungry such individuals can be in driving the business forward. The most effective social enterprises are rooted in their stakeholders and communities. Conventional business may also be bigger than the individual who runs or sets them up, but social enterprises are set up to address a particular social issue or objective and this remains their driving, primary purpose for the long term; profitability remains important, but it serves the needs of social stakeholders above that of the whims of individual shareholders and their personal profit motivations.

Alongside this the PM also talked about how social enterprises (as well as charities) are not only dependent on the people involved, but also the trust which they engender in the way they work.  The Charity Commission and new Fundraising Regulator are working to help the government with this.  However this does not address the trust placed in social enterprises.  This is where the Social Enterprise Mark comes in – we externally assess social enterprise credentials as well as commitment to providing additional social value. The Mark acts as an independent guarantee that an organisation is trading for the primary benefit of people and the planet.

Lastly, social enterprises also often provide goods and services that address the needs of a whole community, not just the poorest, although they may have programmes that are targeted at or support those in the most need.  The fact that they are run as businesses (and as I touch upon above, must therefore be profitable) allows a cross- subsidy model and does not require grant funding, which tends to be more specifically targeted at the most marginalised.  Therefore you can legitimately argue that the social enterprise business model can help ‘the just about managing’.

Post truth and post authenticity?

I write this on a day when Donald Trump has been announced as President Elect of the USA.  There are many questions being asked and much soul searching for answers to them. Amongst others – are we in a post truth era or an era that wants to kick over the traces of corporate and institutional power that have bypassed them? One thing is for sure, it has been very difficult to see the truth from the myths and the authenticity of the message.

A lack of transparency and clarity from leaders and commentators regarding the business model has also been a feature of social enterprise too for as long as I can remember.  This has served a purpose; to pump-up the sector in terms of size and diversity without asking too many questions.  It has also served a small number of well-connected social enterprises that know and can milk the system, which has led to the development of opaque business models that have benefited from the patronage of government and support programmes, e.g. Social Impact Bonds and the advent of Social Investment.

se_brand_approved_rgbIt was partly for this reason that we set up the Social Enterprise Mark as a project 9 years ago, and 3 years later as a business in its own right.  We now have the longest pedigree and experience of social enterprise accreditation in the world and are indeed seen as leaders, with international academics and experts looking to us for our expertise in this field, e.g. British Council in China. Social enterprises outside the UK have also decided that they wish to accredit directly through our process, e.g. Fairtrade Labelling Organisation (FLOCERT). This proves that there is an appetite for being seen as different and being able to prove it credibly.

trustmark-logoWe can draw an analogy to TrustMark, a Social Enterprise Mark Holder, which evolved in response to concerns in the building sector. It is a government-endorsed accreditation scheme for trades in and around the home, providing reassurances that businesses must regularly stand up to scrutiny to.

Social Enterprise Mark CIC had an original mandate from our sector to provide a similar service in the UK, verifying businesses who are genuine social enterprises.

We have learned, from the experiences of Fair Trade, of the importance of having a status that could confer genuineness and authenticity.  At the time many different models were banded about, e.g. self-certification, CSR marks, membership bodies etc.  We were clear that certifying authenticity can only be achieved through independence (the certification panel) and with transparency (application of the criteria consistently). This is why we operate as an independent CIC and not a membership body.  Membership bodies depend upon and exist to promote the interests of their paying members, and through their sector – a potential conflict of interest.

We take our customers and accreditation very seriously and have built the value added to ensure that our accreditation does not stand still and is really clear to the outside world – for example, developing social value declarations to help demonstrate the commitment that all social enterprises should have to making a positive difference for people and planet, as well as the Social Enterprise Gold Mark as an indicator of business excellence.

The term “accreditation” may be used to distinguish a system of certification that actually seeks evidence in confirmation of an organisations credentials. The Social Enterprise Mark has always done this and we are challenge-stampcurrently working with international sustainability standards, established by ISEAL, to help align our Marks with best practice models of accreditation. Whenever you see the term “certified”, ISEAL encourage people to “challenge the label”; to consider a few critical questions that help determine what that certification is really worth.

In striving for the best practice in accreditation, we have been and will continue to consult Mark Holders (and the wider sector). Our aim is to continue to provide a certification process that offers genuinely credible accreditation, one that social enterprises can take pride in and learn to improve from the world over.

Cutting out a more effective way of doing business?

Public sector commissioners are coming under unprecedented financial and political pressure to make huge savings, particularly in the health service.  Unfortunately, this type of pressure only leads to short-termism rather than more strategic, long term decision making.  The tight timetable for the submission of STPs (Sustainability and Transformation Plans) by government also added to these pressures.

The reality on the ground is hard and is leading to irreversible outcomes.  We have recently seen the closure of award-winning Social Enterprise Gold Mark Holder SEQOL, who had proved that they were adding great social value to their community as well as joining up health and social care (all the things that a great social enterprise can help to do).  The services that SEQOL provided will now be brought back into the NHS and Swindon Borough Council.

We have also seen the effects on other social enterprises that were set up as former ‘spin outs’ from the NHS, for example Sirona in Bath and North East Somerset has recently lost its contract to Virgin Care.

A short-term solution?

It would seem that the bottom line has become of overriding importance, over and above what’s good for patient care and a joined up health and social care service.  Those leading the STPs are looking for big savings – this often leads to ignoring the fine grain, and instead opting for the ‘big’ providers that appear to provide a more cost effective service on the face of it. Social enterprises (even those that spun out) are not big in NHS terms, they are just flotsam and jetsam in the grand scheme of things when you are dealing with one of the biggest employers in the world undergoing a serious financial crisis.

Unlike the NHS, all businesses also need to balance their annual books.   The irony is that the NHS can carry a deficit and still operate and deliver on services that are loss making, as they are ultimately backed by the government.  Handing back financially unviable contracts therefore may be an easier short term option.  This approach is of course unsustainable, as even the NHS cannot sustain a deficit in the longer term and will require government intervention or the collapse of parts of the service (unless we all start paying directly for it).

The other option of contracting with a big corporate can also be seen as superficially attractive, as big savings are presented at the bidding stage.  Savings are made, but at what cost?  The profits for shareholders have to come from somewhere.  They can only come through reducing the service and/or people delivering it (e.g. when SERCO ran Cornwall’s Out of Hours GP service).

Is there another way?

So is the baby being thrown out with the bathwater?  I think so.  It is too late after the act.

Medical examinationThe health and social care services are delivered by people for people.  Social enterprise offers a way to help those who delivered the service a chance to have a say and input their expertise and in some cases actually own it (where there is employee ownership).  It also offers the chance for patients input too.

I am not arguing for a bad service to be continued, but people will not stay if they do not feel valued.  We are seeing this currently with the shortage of staff and low morale in the NHS.

The added social value that the business can bring to its community, by joining things up that might not be healthcare related, is also lost.  For instance, SEQOL had a policy of employing people who had been through their supported employment programme.  It also provided savings that were not directly contract related, through prevention and partnership working.  These things are harder to measure and all came from the spirit of innovation and ‘thinking outside the box’.

It is therefore even more vital for us as social enterprises to try to articulate all of this to commissioners at a difficult financial time.  Social enterprises can provide part of the answer to the holy grail of outcomes based commissioning, but it requires a more long term, strategic, joined up approach and commissioners with ‘bottle’ who are prepared to take some risks despite the huge pressures to jump to the short term financial goals.

We have recently developed a set of new resources to support Commissioners in developing and embedding an outcomes based approach to commissioning public services. Please get in touch for more information.

How social enterprise can facilitate innovation in health and social care

I was recently interested to hear about an innovative new movement focused on collaboration between practitioners, businesses, and communities, to improve and support health and social care services.

WHISWorld Health Innovation Summit (WHIS) is a platform for everyone in the community to come together and share knowledge to deliver solutions for the benefit of all. There is no denying that our health and care services are under increasing pressure…. to cope with the demand, we need innovative solutions. WHIS believe that collaboration is key here and they propose that, by bringing patients, clinicians, managers, voluntary sector, education and businesses together, we can improve the future of health and care services for all of us.

WHIS was brought to our attention by Steve Turner of Mark holder Care Right Now CIC, who is working to bring WHIS to the South West. As Steve explains, “This is a forum for healthcare unlike anything else I’ve ever experienced. It really involves patients and the public, across the world and shows the benefits of seeing healthcare as a social movement.”

I agree with Steve – WHIS is an exciting development, as it highlights on a global scale the opportunities available for innovation in health and social care. We have long recognised that the social enterprise business model offers many opportunities for delivering significant improvements in health and care services. By having a certain amount of freedom from the bureaucracy of the NHS, ‘spin-out’ social enterprises can deliver innovative services, which focus on meeting the needs of patients and communities, as well as the wider health and wellbeing economy.

IC24For example, Social Enterprise Gold Mark holder Integrated Care 24 (IC24) places an emphasis on new product and service innovation for an improved patient experience and reduced demand on other services. ‘mylittleone’ is a unique example of how they have utilised technology to meet patient needs; to promote bonding between mother and baby when a child is placed in neonatal care. A camera is placed above the infant’s cot with video streaming to a tablet that the mother can have wherever she is, which reduces stress and anxiety for them both.

JTH nursesThis is just one example. Over ¼ of our network of Social Enterprise Mark holders operate in the health and social care sector, providing a wide range of essential services, including urgent and out of hours healthcare, general practices, community healthcare, and family services and social care.

We are therefore always keen to support new ways of working in this sector, and we welcome WHIS as an arena for encouraging innovation through collaboration, both within the sector and across other business sectors.

With a growing and diverse network of providers in the sector gaining Social Enterprise Mark/Gold Mark accreditation, we are keen to encourage Mark holders to collaborate and share their knowledge and experiences, in the pursuit of continually improving the services offered. This is why we are working with a number of Mark holders to set up a specific health and care network, which will be facilitated and run by the organisations themselves, supported and promoted by Social Enterprise Mark CIC.

For some time now, I have been increasingly aware that social enterprise can offer a platform to enable health and care providers to deliver more for patients/service users, whilst strengthening their business and increasing social value. This viewpoint has recently been endorsed by a report from the South West Academic Health Science Network (SW AHSN), which highlighted the potential for charities and social enterprises to play an important role in future models of health and care. Indeed, SW AHSN has recently partnered with social investment organisation Resonance to launch a £5million fund to support social sector organisations to develop innovative, person-centred health and care solutions.

With local authorities and commissioners now being encouraged and incentivised to consider bids on the social value they will create, rather than on pure cost, this presents an opportunity for social enterprises to stand out as proven creators of social value. Following The Public Services (Social Value) Act coming into force in 2013, health, social care and public services providers have been under increasing pressure to prove that they are creating social value. By becoming an accredited social enterprise with the Social Enterprise Mark/Gold Mark, health and care providers can prove they operate with the central aim of using income and profits to maximise their positive social impact.

It is encouraging to see the momentum the WHIS movement has gained already, and we are excited to be in discussions with Steve Turner at Care Right Now CIC about supporting the proposed WHIS Cornwall network.

To find out more about WHIS visit: http://www.worldhealthinnovationsummit.com/.

Services/products you wouldn’t expect to be delivered by social enterprises

During my 15 odd years working in the social enterprise sector, I have been asked countless times to explain what a social enterprise is. Like many others in the sector I am sure, I tend to wheel out the same well-known examples, such as Big Issue and Age UK, to illustrate the concept of social enterprise. Using these ‘mainstream’ big name examples does help to get people’s heads around the idea of social enterprise, although I often think of the many organisations operating across the country (and internationally for that matter), that fit the bill but do not have the label. That is, they want to make a profit but commit to reinvesting this to create benefits for people and the planet. These businesses operate in almost every industry, and I am sure many people would be surprised at the wide range of products and services delivered by social enterprises.

Using examples from our network of Social Enterprise Mark and Gold Mark accredited organisations, I have listed below a handful of the products and services that you probably didn’t realise were delivered by social enterprises.

 


Bed-iconAccommodation and conference facilities

It’s a service that we all use at some point, either in a personal or professional capacity, but many would not readily consider that hotels and conference venues would offer much in terms of creating social value.

The WesleyHowever, take the Wesley Hotel for example – the only hotel to have been awarded the Social Enterprise Mark and the first ethical hotel in the UK. The Wesley is committed to sustainable operations and social responsibility, which underpins everything they do, from procurement to waste management, and from water usage to employment practices.

A distinct example of how they create social value is the Hilda Porter Bursary Fund, which provides funding for marginalised students and young people in the UK and developing world, who do not have the means to study at higher education level.

 


Dollar-iconBanking and finance

With the negative press frequently associated with the banking and finance sector, it may be surprising to learn that there are a growing number of ethical banks and financiers, including Charity Bank – a bank entirely owned by charitable foundations, trusts and social purpose organisations.

Charity-BankCharity Bank was founded to support charities with loans that they couldn’t find elsewhere and to show people how their savings could be invested ethically and in ways that would make them happy. Their community of borrowers, savers, shareholders and staff are all working towards one goal – helping to create lasting social change in communities. Loans are provided to organisations to further their social missions, and borrowers are assessed on both immediate benefits for their beneficiaries, and longer term benefits for the borrower themselves.

 


Degree-iconHigher Education

Higher Education is not the first thing that pops into most people’s minds when they think of social enterprises, especially given the modern cost of studying for a degree. However, we have noticed a growing in interest social enterprise from the Higher Education sector, and there are now 5 Higher Education Institutions (HEIs) which have been awarded the Social Enterprise Mark or Social Enterprise Gold Mark in recognition of their commitment to creating positive social and economic change:

More than ever before, HEIs are placing civic engagement, social and environmental justice, and sustainable economic development at the heart of their strategic plans and student experience, and each of the above institutions have demonstrated a commitment to these values, putting sustainable and ethical business practices at the heart of their strategic direction.

 


Browser-iconIT and digital services

Again, these services may not immediately spring to mind when thinking of services provided by social enterprises, but there are organisations in the IT industry that place an emphasis on operating ethically and creating social impact.

CosmicCosmic is one such example; an ethical digital agency specialising in website development, IT training courses, business consultancy, tech support, digital marketing and search engine optimisation. They were the very first organisation to be awarded the Social Enterprise Mark back in 2010, and have a key objective of improving digital inclusion – providing IT support for people and organisations who need it the most.

They are continually involved in a range of projects which achieve meaningful impact for individuals and organisations across the South West and use their own resources to develop and deliver project work benefiting thousands of people.

 


Pen-iconOffice supplies

It’s not just services that are delivered by social enterprises – there are many retail businesses that operate in competitive commercial markets, whilst maintaining a commitment to social and/or environmental objectives.

Supply ShackAn interesting example of a non-conventional social enterprise is Supply Shack – a group of sub-divisions selling office supplies, furniture, promotional gifts, signs, as well as design and print services.

They have a strong social mission; their primary objective is to drive social change. They achieve this through their unique ‘giving back to the community model’, whereby they offer an extensive range of products and services at competitive rates, the majority of profits from which are reinvested into the community with a focus on making a difference to people’s lives. Each year their customers vote for the community projects and charities that Supply Shack will support. They also engage with charities and apprenticeship schemes to offer employment opportunities for those from disadvantaged backgrounds.

 


This is just a handful of examples, you can find many more in our online directory of accredited social enterprises. I urge you to look out for the Social Enterprise Mark and Gold Mark badges as a sign of social enterprise credibility – all organisations that we accredit are guaranteed to be operating with the primary motivation of creating benefits for people and the planet.

New Look Marks

Cash cows and money milking

The public and press have short memories. Today and over the last few weeks there has been flurry of scandal and comment about corporate greed. Even the right wing press are shouting about how BHS has been asset stripped, leaving a huge pensions hole. From offshore accounts and tax evasion, to BP paying a huge bonus to their CEO (despite huge losses being made by the company), the prevailing behaviour seems to be keep milking as much shareholder profit out, pay very little tax and forget thinking or caring about the consequences and who it affects.

A magnifying glass is held up to this sort of behaviour whilst it’s top of the news agenda, but it soon goes back to business as usual. There is no consistency in reporting either. One day there will be exposure of corporate greed in delivery of public services and the next day that company will be telling the business pages what a great job it does in valuing its employees and customers – maybe the figurehead head becomes another government ‘business czar’ – and getting CSR awards to boot?!

It doesn’t have to be like this though. If social enterprise was seen as a viable alternative, not just a niche, do-gooding, market failure option then perhaps we would get somewhere! Instead we forever seem to be hidebound by the current business orthodoxy of business schools the world over; ‘business is there to make money for its shareholders’.

This is why we get into problems with arguments about lack of investment too. The orthodoxy is that it’s hard to expand unless you can attract equity providers. However, as a famous local business person told me, ‘this is the equivalent of selling the family silver’. It means that you are at the behest of the equity stakeholders and even if they own a small proportion they are likely to influence in a purely commercial direction as their role is one of primarily making money. The wider social value of the business comes second.

What we need is a radically different business model that is seen as mainstream, not marginal. I don’t think that this is Corporate Social Responsibility. Rather it’s about truly putting people first. The old co-operatives of the last century were the centre of their community, because they were owned by the people that lived there. They were first and foremost about serving the locality, not making a fast buck and running.

There are those out there that share this ideal and business model that are not just niche; they are a substantial part of the economy. Universities, colleges, theatres, arts groups, membership bodies, sports clubs, unions – they all have a strong social mission but operate in many cases as businesses. They are our allies and we should be working together more closely to present a vision of what we want business to look like, not what business dictates to us.

Our conference in June, entitled ‘Standing up to Scrutiny’ will look in more detail at how we can work together to promote social enterprise as a credible and sustainable business model for the future. We will discuss the importance of accreditation and standards systems, and how these can help social enterprises to measure, demonstrate, and report on their social impact. Please click here for more information and to book your ticket.

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Influencing the international destiny of social enterprise

By Richard Cobbett, Assessment and Compliance Manager

British CouncilLast month I had the great privilege of visiting Beijing, China, where I had been invited by the British Council to talk about the development of the Social Enterprise Mark certification process.

As well as the Council, I met with several key academics, including Professors Yuan Ruijun, Zhang Yanlong, Meng Zhao and Zhiyong Chen, from the Universities of Peking and Renmin and Ruixue Zhang from the China Philanthropy Research Institute (CPRI). As a group, they are striving to establish a clear definition for social enterprise in China, with a view to then developing their own infrastructure for certification. Through this they aim to encourage the development of social enterprise and influence the conditions in which it can flourish.

The term “place of contrasts” is somewhat of a travel cliché but could certainly be applied to my short time experiencing Beijing, and also visiting other locations in China as a tourist. I wonder though, do indigenous populations recognise this about the countries they live in or simply accept everything as part of a greater whole? As I was to discover, this provided a metaphor for the social business landscape in China, as they continue to explore questions of social enterprise differentiation.

On my arrival, I had a short time to recharge, although jetlag was yet to seriously take hold. Over the next few days though, this and the inevitable language barriers found me more than once recalling Bill Murray and the film “Lost in Translation”, which suddenly took on a whole new level of meaning for me!

Richard in ChinaI initially met with Hou Peng and Jack Yu from the British Council, along with Ruixue Zhang (CPRI) for an early dinner as part of a general welcome. I was to find that mealtimes always raised a few polite smiles as people observed me honing my chopstick skills but I like to think that by the end my stay I had got quite proficient at it!

The following day I met with the University Professors and CPRI representatives, who have done extensive research into different systems of social business certification from across the world. I talked about the development of the Mark, the rationale behind the criteria and workings of our assessment process.

We drilled down into these matters in detail, provoking lively debate amongst the group concerning how far the Mark could be applied in China, and the potential barriers and challenges posed. It was a fairly intensive interaction – quite a baptism of fire for me and one that certainly kept me engaged as the jet lag slowly kicked in! I made it through the day, stubbornly refusing the offer of a knife and fork at lunchtime (and not going as hungry as I did the previous day)!

The following day I contributed to a workshop lead by my Chinese colleagues involving delegates from across China – people either supporting, running or working in social businesses. The workshop provided a forum for people to discuss social business certification and the relevance of this for China. It was a long and fascinating day, placing several of the questions raised during my first day within the real life contexts of organisations who see themselves as prospective social enterprises. Those in attendance included business entrepreneurs, organisations we might label “social firms”, charitable and community businesses, as well as ones that would more immediately conform to our stricter definition of social enterprise. There was also an agency present who were administering a regional pilot certification initiative and an organisation that had achieved it. This follows very similar criteria to that of the Mark and both organisations spoke positively about the process: the value they perceive in differentiation but also in how it has encouraged them to think more carefully about their purpose, how they work, and the social value they are creating.

Richard in China_workshopAs the mix of delegates suggests, those who might describe themselves as a “social enterprise” in China include all manner of businesses laying claim to social purpose through what they do and/or how they operate. This and other challenges for certification that revealed themselves across the day included familiar ones. Views ranged from those who are suspicious of the need for standardisation if they can simply show their social value; to those who see it as a means of improvement, by clearly aligning themselves with certain core principles and gaining recognition for these credentials. More uniquely to China perhaps, their varied terrain also includes distinct local economic and cultural differences, which pose other difficulties for standardisation.

The potential cost and benefits of delivering robust certification understandably lay at the heart of many questions and this revealed similarities to what our MD Lucy Findlay, found when she visited Taiwan last year. At the moment, there are a mixed bag of interests and all want to know how certification may lead to social investment or legislative advantages. But throughout the day, it was interesting for me to observe how many of the questions being posed were ones echoing our own experience of developing the Mark. As discussions unfolded though, I found myself quite deliberately taking a back seat. This wasn’t me succumbing to jet-lag or the audial acrobatics of simultaneous translation! It was satisfying to see answers to different concerns or objections being identified from within the room, instead of there being a reliance on so-called “experts” to provide these. Whilst it was inspiring to see how we may be helping to influence the destiny of social enterprise in China, to see people on different sides of the debate contributing so keenly and taking such ownership was much more so.

Questions around our profit distribution criterion possibly generated the most interest. I have to admit to being a little bit surprised when one delegate suggested that it went against human nature and the desire to achieve personal profit. But it was a reminder that China has come a long way in developing capitalist sensibilities. The obvious answer perhaps was “it depends on how you measure your sense of profit”, but it serves as a recognition that social business comes in various forms. As I said at the outset: China is a nation of contrasts and their social business landscape is made up of different interests. In this they are no different to anywhere else. There is room in the world for any business seeking to make a positive social difference, and they are all to be commended for it where they do.

Richard in China_workshop2In my closing address, I recognised this point and attempted to answer the question – why differentiate social enterprise? I explained how several years ago in the UK we asked the same question, and the Mark was born. We did this because the social enterprise sector believed itself to be a distinct form of social business that is committed to maximising social outcomes through how profits are invested towards these. Of two businesses delivering exactly the same service and same standards, the one committed to investing income/profits in social outputs will always exceed the potential for social impact, compared to the other that exists to generate profits for shareholders. Maybe this is an oversimplification but it helps crystallise why differentiating social enterprise from other forms of social business is relevant. And certification or accreditation should ultimately provide a means through which genuine social enterprises show how they willingly hold themselves up to scrutiny against this differentiator.

I finally reflected on how accreditation essentially represents a form of regulation – a dirty word for many, but in considering this I asked people to cast their minds back several years ago. To recall a rapacious sector, one resistant to regulation in the belief that it placed a burden on their capabilities, restricting their potential for success and any associated benefits for the economy and wider society. The results of this arrogance, of being above and beyond scrutiny are well known. I suggested that social enterprise is meant to be better than this and that accreditation should actually be seen as a natural element of helping build trust through ensuring and proving this. More than this, subscribing to achieve and maintain standards, to be held account to them, is actually a means through which people and organisations can build their capability – not have it restricted. Certification is therefore a form of enablement.

China PandaI thoroughly enjoyed my time meeting with a vanguard of social enterprise in China and learned much from them while I was there. My time in the country was not over at this point as an army of clay soldiers, the delight of pandas at play and a hike across a great wall awaited me (amongst other magnificent sites, along with some dubiously informed menu choices!). But that, as they say, is another story… My memories are of a country of great and beautiful contrasts and an experience I will fondly recall. I would like to thank Hou Peng of the British Council in China for his organisation and expert facilitation of my visit.

Helping to create winning or better social enterprises?

I recently stumbled upon an American blog which talks about whether competitions are good for social enterprises.  They are indeed all the rage – from social enterprise ‘Dragon’s Den’ style pitches, to ‘Social Enterprise of the Year’ awards.  However, are they really what social enterprise is about, and do they really tell us about whether that business is genuinely applying good practice?

Objections to competitions could include:

  • They offer a ‘flash in the pan’ snapshot view that doesn’t represent the long hard graft that goes into making a social enterprise work
  • What about those who don’t win – is it too much about winners and losers? Does it leave a bad taste for those that don’t win?
  • Is collaboration better than competing?

Cup-champion-iconFor me, competitions represent a snapshot in time and do have their place – for example, we are currently running the Making a Mark competition to celebrate the vast and diverse social benefits created by Social Enterprise Mark holders.

However, what competitions do not do is to tell you much about the social enterprise beyond the moment they were judged, or indeed the openness and transparency of competition process. It’s up to whoever the judges are on the day.

Accreditation however offers something quite different. The Social Enterprise Mark for example, is both a tool of business differentiation, and a tool to demonstrate that those who have it have proved how they are making society a better place.  There are no losers if you make the accreditation standard consistent and transparent, and our independent Certification Panel ensures this. The Mark provides a guarantee year on year, for both customers and partners, due to the annual reassessment process. Our Social Enterprise Gold Mark goes further, to prove that the best attributes of social enterprise are being applied across the business, and further developed and improved upon over time.

Therefore, we are not just talking about a single snapshot in time, but rather a social enterprise that can prove its social and enterprise attributes on an ongoing basis.

There is more ‘greenwash’ going on than ever before, as businesses realise the benefits of playing the social value and sustainability game. Which is precisely why we, as social enterprises, need to stand up to scrutiny and be open and transparent about what our motivations really are.  This is where Social Enterprise Mark accreditation can provide the solution!

verifying social value with the Social Enterprise MarkThe Mark provides an independent guarantee that an organisation has been through a robust assessment process, and is proven to be trading for people and planet. This is the crucial differentiator, and distinguishes social enterprises’ core motivation for being in business, which sets them apart from standard business models, where the key motivation is often to maximise profits for shareholders.

‘Standing up to Scrutiny’ is the theme of our conference this year, and the event will focus on why it’s important to prove what we are and how we are doing it. We will consider the importance of accreditation and standards systems, and how these can help social enterprises to measure, demonstrate, and report on their social impact, therefore enabling them to stand out from the crowd.

Conference speakersWe are pleased to be welcoming a panel of speakers from accreditation and standards setting authorities across a range of sectors, which should provide interesting and diverse perspectives on the importance of such systems.

The conference is being kindly hosted by Social Enterprise Gold Mark holder University of Salford at MediaCityUK on 8th and 9th June 2016. Earlybird tickets are available to book online from just £50 + VAT.

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Measuring Social Impact – The Difference of Social Enterprise

Part 2

By Richard Cobbett, Assessment and Compliance Manager

Last month, I started to consider how social enterprises should be distinguishing themselves when compared to other business models looking to validate ethical business credentials, through how they measure and report on their social impact (including environmental). To recap, there are three broad ways through which a business may report on its social impact:

  1. its social inputs (the activities and resources invested in, the services provided, which should at least imply social purposes);
  2. its social outputs (the extent of said activities and investment e.g. numbers of services provided, numbers of people helped, the level of social investment beyond operational cost requirements);
  3. its social outcomes (the positive results arising from activities e.g. measures showing how people have benefitted, and the perceived value of the services provided – financial and qualitative).

Measuring impact

The commitment to maximise social outputs using income and profits – at least in equal measure to the proportion of profit that may eventually be paid to shareholders and owners – is what ultimately distinguishes social enterprise from other ethical business models. I therefore posed that, in differentiating their outputs, social enterprises should be considering how the level of the investment towards purely social interests, compares with the annual profits it generates year on year. Ideally speaking, this form of analysis should form part of the social impact reporting of any social enterprise.

In calculating social impact, there is a distinct element that some social enterprises are keen to capture when considering the above: how can they calculate the cost of the social value they have created – the effective financial value of the benefits conferred to their social stakeholders (as opposed to shareholders)?

Social Return on Investment (SROI) and other forms of social auditing provide solutions for this but can be quite demanding and resource intensive, particularly for organisations with restricted resources. Is this methodology the only valid approach though?

We are beginning to see other methods of conveying social value being employed by Social Enterprise Mark holders, within the social impact statements they provide on initial application, and at each annual renewal of their Mark status. The types of example that are emerging are:

  • Mark Holders with contracts to provide a set number of social outputs/outcomes, who are paid up to a maximum but who choose to deliver more for their stakeholders;
  • Mark Holders with service level agreements or being paid for a defined level of service, who enhance the outputs and the experience of stakeholders in ways that are not required or expected;
  • Investing in free or volunteer services that otherwise represent chargeable income streams;
  • Investing in employee posts (temporary or otherwise) that do not support income generation services;
  • Making donations to external good causes (e.g. Charities, community groups) or investing in other community resources.

The above examples are by no means necessarily restricted to social enterprise – after all, pro-bono services and donations to good causes are common amongst all types of business. However, calculating the value of such activities and investments, then comparing it to profit distributed to owners or shareholders, can ultimately help distinguish the added value of social enterprise.

Clearly, this does not likely represent the whole financial value that a social enterprise may have created, which may be less tangible and reveal itself in various indirect and long-reaching ways. It therefore does not provide a detailed analysis of the return on investment; but it does offer a more straightforward way of at least beginning to illustrate the more immediate social value of investment.

When qualifying such costs, care must be taken in distinguishing investment that provides for a level of efficiency and quality that is the obligation of any good business in the services it provides. These are costs that its customers and stakeholders can reasonably expect for the price being paid for it. Once again, when assessing this a key consideration is motivation:

  • Was the investment one that was recognisably more altruistic than not?
  • Was the investment integral to an existing service or product line, more representative of good business practice, reinforcing the quality of delivery in ways that could be reasonably expected of any business?

Or, to put it another way, was the motivation primarily about serving a social objective or primarily about doing good business?

Ideally speaking, social enterprises should be equally committed to both: employing good business practices and using profits (or income that could feasibly be retained as profits) to maximise their social impact.

The line between investing in good business practice for commercial benefits compared to investments in actions purely designed to enhance social outcomes can become subjective and arguable. But what it most important is that social enterprises continually reflect upon what they are doing, ask different questions about how they have invested resourced in supporting social objectives and serving their communities of interest. This then informs how they report upon their performance to their stakeholders. As far as possible, a good social enterprise should strive to be transparent and accountable with the evidence it can provide in support of its claims. Ultimately, their stakeholders can then make informed judgements and responses to the social impact – including its value – that has been created.


To support Social Enterprise Mark holders to measure, demonstrate and communicate the social impact of their activities and operations, we have recently created guidance for creating social impact statements. Visit our Making a Mark webpage to see a variety of examples of social impact from our Social Enterprise Mark holders, covering a diverse range of business sectors.

Measuring Social Impact – the difference of social enterprise

Part 1

By Richard Cobbett, Assessment and Compliance Manager

“Social enterprise”, “Social business”, “Social Entrepreneurism”, “Corporate Social Responsibility” (CSR). How many people must be left scratching their heads when trying to determine the difference between these labels?

The fact that such business models can all measure and report on their ethical business outputs in similar ways explains much of this confusion. Their social impact (including environmental) may vary according to their resources, their sector of interest and other factors influencing their delivery capacity. But if they are all about the same ends, why is there a need for so many labels?

The Social Enterprise Mark evolved as a means of helping genuine social enterprises stand out from the crowd, driven by the desire of the sector to distinguish their distinct motivation for being in business – trading to serve social purposes. This is the crucial differentiator: what is the central motivation behind the business – why does it exist?

A social enterprise is not necessarily a guarantee of greater social impact – as I note above, the scales of output may vary according to circumstances unrelated to business motivations. An international corporation reporting CSR credentials may be able to point to greater levels of investment and positive social output than a small social enterprise providing a crucial service in a rural community.

But how does this investment compare with their overall profit generation? How far was the investment motivated by other interests, such as maintaining a positive public profile that helps them retain and expand their markets, thereby continuing to maximise shareholder profits? How far does such CSR related investment suffer when profits fall, compared to the bonuses and dividends paid to top executives and shareholders?

What distinguishes a social enterprise is it’s commitment to continually maximising social outputs with the income they generate through trading, at least in equal proportion to the objective of serving owner or shareholder interests. This specifically requires a commitment to investing at least 50% of annual profits in social purposes. Just as significantly, it also includes a consideration of how income that might otherwise be accumulated as profit (which could then feed personal shareholder gain) is used to support the fulfilment of social objectives throughout the business year.

There may be instances where social enterprises endeavour to minimise annual profits, to reduce corporation tax and thereby maximise the ongoing investment in their social purposes. In these instances, justifying how resources have been used to fulfil social objectives and achieve social impact becomes even more important. If a typical indicator of business success is bottom line profitability, when a social enterprise fails to report a profit, analysing and reporting on social impact represents an alternative rationale for demonstrating business strength and sustainability.

Broadly speaking, there are three ways in which a business may be able to report on how it has strived to fulfil its social objectives:

  • its social inputs
  • its social outputs
  • its social outcomes

However, the question remains: how can a social enterprise distinguish itself when reporting on its social impact when compared to other business models and their ethical commitments?

Following the logic of earlier points, this must necessarily take into account the application of income and profit towards social purposes; this may also include the cost of investments that might otherwise have represented income generation potential (e.g. people’s time given up freely to provide services). Once a social enterprise begins to consider its activities along these lines, it may consider how the level of the investment towards purely social interests compares with the annual profits it generates year on year.

Social Return on Investment (SROI) and other forms of social auditing provide formal methodologies that businesses can employ in reviewing and calculating the social value they have generated. Such approaches can be quite complex and demanding though and may have limited relevance or value to a business, particular smaller organisations or those with restricted resources. However, whilst these systems provide for greater transparency and external validation of an organisations achievements, there are simpler ways in which organisations can provide illustrations of the social value they contribute. We are beginning to see interesting examples of this emerging from our Social Enterprise Mark Holders, within the social impact statements they are asked to provide when first applying and at each annual renewal of their Mark status.

Next month, in part two of this article, we will consider some general illustrations that help exemplify alternative ways of how social enterprises can reflect upon the social value of their investment in fulfilling their social purpose.


 

Please click here to read part 2 of Richard’s blog

Going global with social enterprise accreditation

Following on from my post in September, looking at how the Social Enterprise Mark differs from other accreditation/certification schemes, it occurred to me that a key differentiator for us is the international aspect.

The Social Enterprise Mark is the only internationally available social enterprise accreditation, enabling credible social enterprises to prove that they are making a difference.

Following the approval of Middle-East based C3 as the first international Mark Holder in April, we are delighted to have recently awarded our second international Social Enterprise Mark to FLOCERT, the global certification body for Fairtrade labelled products.

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FLOCERT is dedicated to strengthening the development of fair international trade, and since 2003 has supported the phenomenal growth of Fairtrade, a movement that’s had a positive impact on millions of smallholder farmers and workers in developing countries.

People_Rudiger_FLOCERTRüdiger Meyer, CEO of FLOCERT said:

“Based on its deep roots in the Fairtrade network, FLOCERT has always regarded itself as a ‘social business‘, which is not focused on making profit. Instead, we aim at covering our cost and providing the resources needed to continuously improve the services and systems for the benefit of our customers, representing 1.5 million farmers and workers, as well as traders and multi-national brands.

Applying for Social Enterprise Mark accreditation was therefore a natural step for us. We found the accreditation process very smooth and the co-operation with the people at the Social Enterprise Mark CIC highly inspiring. With this accreditation we can now show that we truly are a “Social Enterprise” and that we fulfil the expectation of our customers to make an impact in our drive to advance fairness in global trade and to advance farmers and workers in developing countries.”

From our experience of assessing and accrediting these organisations, we have now developed a tried and tested international assessment process that can be applied anywhere in the world.

“We are happy to receive applications from organisations based in countries outside the UK, and now have an internationally applicable assessment process. Although it is inherently more complicated for international applications, I was very impressed with how efficient FLOCERT were with responding to our questions and information/evidence requests. From our perspective it made assessing and approving their application a very straightforward process” says our Assessment and Compliance Manager Richard Cobbett.

As we are unable to perform the usual verification actions involved in assessing eligibility for the Social Enterprise Mark, the standard application process cannot be employed.  Please click here for more information about requirements for international applicants.

An interesting comment that jumped out at me from our recent stakeholder survey was that we need to be “the global centre of social enterprise”. It then occurred to me that we could better promote the international aspect of our work, not just by attracting more international applicants, but by championing the global standard for social enterprise through consultancy for international counterparts.

3V1A9801As featured in my last blog post, I recently travelled to Taiwan to speak at the International Social Enterprise Conference, where I shared our experience of setting up a social enterprise accreditation scheme. We also did some consultancy work this year for Fund Our Future in Russia, and developed a manual with guidelines for setting up an equivalent accreditation scheme for social enterprises in Russia.

We welcome the opportunity to work with counterparts around the world looking to develop country-specific social enterprise accreditation schemes – please click here for for more information on our international consultancy service.

I am delighted to welcome FLOCERT as our second international Social Enterprise Mark holder and we look forward to welcoming many more international applicants in the future.

Diary from a whistle-stop tour to Taiwan

During September, I was invited by the Taiwanese government to speak at 2 conferences over 2 days in 2 cities – the capital Taipei and another big city in the centre of the island – Taichung.

It was a bit of a whistle stop tour, but ably enhanced by a steep emersion into Taiwanese life from my guide and translator Tracy Chee, who in fact turns out to be Malaysian, with cousins who run the Wet Wok in Plymouth, so small world indeed!

I was pretty tired the first day I arrived, having just flown back to the UK from a holiday cycling in Southern Albania and then straight out to Taiwan the next day. The cultural contrast was immediate – high rise, manic urban activity (Taiwan) vs an agrarian laid back mountain village lifestyle (Albania). However, I was to find that there were some similarities.  The other side of the island features many mountainous areas where the economy struggles and the locals suffer from poor access to education and jobs.  Social enterprises are providing a vital opportunity to gain employment and an income for these people.

Taichung was the first destination.  My hotel room suggested (I was on the 19th floor) that we might be going to a high rise block  of a city full of skyscrapers.  However, I was pleasantly surprised when we arrived at the venue which turned out to be an old wooden winery which has been converted to a conference venue within Taichung Cultural & Creative Industries Park. 

There 3V1A9801was a large audience comprising a mixture of social enterprises, students and those interested in social enterprise.  For the morning session I was pleased to meet  Anthony Wong who works in policy for a Hong Kong based social infrastructure organisation, he was talking about social impact measurement.

5D3A8794My main talk was in the afternoon, for which I had been asked to focus on social impact as well.  I tested the waters to find out who was actually running a social enterprise.  A few people put their hands up but it seemed that the audience was mainly at very early stages in their journey.  I therefore concentrated on talking about how social enterprises can show that they are making a difference right from the beginning.

Art4SpaceI used our Social Enterprise Mark holders as practical examples. I gave them some concrete case studies from Art4Space, who have run a brilliant project called ‘Birds Fly to Africa’ where British school children have designed mosaics that have been constructed and sent out to African schools alongside building new classrooms.

Co-WheelsI also talked about some more technical demonstrations of social and environmental impact, where the Car Club Co-wheels has worked with other car clubs to show the environmental and social difference that they have made collectively.

JTHLastly I talked about Social Enterprise Gold Mark holder John Taylor Hospice and its excellent social impact story. They have looked at all aspects of their work and categorised their impact in a very logical way, e.g. overall impact such as doubling the amount of care that they give as a social enterprise and local impact, volunteering impact etc.  There was interest in these case studies as well as interest in the concept of labelling.

After the conference, we then went on to visit a local project that helped disabled adults learn how to exploit and hone their artistic skills in order to generate an income for their families.  The work was really outstanding.  I wanted to buy a picture but it wouldn’t fit in my suitcase. We then travelled by high speed train to Taipei – a very efficient journey and so much faster than going by car.  I think our train operators could take some lessons in this respect!

The next day I still hadn’t adjusted to Taiwanese time and ended up over-sleeping.  Luckily the room maid came and woke me up 20 minutes before I was due to meet the driver.  I went with Tracy, my guide, over to the Taipei New Horizon which is part of another regeneration area.  We had a look around the old buildings, which were arts, exhibition and café space, again very well and sympathetically restored.  I loved some of the art work that was on show and nearly ended up in the Chinese Painting Conference which was running alongside in the centre rather than the Social Enterprise one!

3V1A03965D3A87163V1A0419

 

 

 

 

I had the benefit of talking to my co-presenters and moderator before the session over lunch.  I learned more about the difficulties encountered with supporting immigrant brides from other parts of SE Asia as well as the challenges of the less developed areas of the island.

My speech itself went down well and we were joined by the Minister with Portfolio Professor Joyce Yen Feng who actually teaches social enterprise in a Taipei University – so she was very well briefed. A number of her students were in the audience too, so maybe her arrival triggered the high turnout?  Time was limited for discussions but there again was a lot of interest in how the Mark operated and I learned that there is a proposed similar scheme in China.

All too soon it was time to say goodbye to my new friends.  I have to say I was very impressed with their commitment and the government’s commitment to social enterprise.  The gap that I identified is the real in depth business support for social enterprises to grow.  We have seen a decline of this in the UK and this continues to be a problem for new starts, and I detected a bit of confusion about where to start. At one stage I got asked to define social enterprise vs social economy!  It is very confusing for those starting out – social impact, social value, social business, social innovation etc etc!!

Before I got my flight home, Tracy kindly took me to view Taipei 101 – this used to be the world’s tallest building.  It was amazing and although we didn’t have a chance to go up it the shopping centre full of top designer stores challenged the senses.  I will definitely be returning to Taiwan, but not to go designer clothes shopping!

Many thanks to the Taiwan government for inviting me.

What makes Social Enterprise Mark certification different?

There is often confusion between the various ‘badges’, ‘identifiers’ and ‘certifications’ available to organisations looking to prove their social and ethical credentials, and we are often met with questions about the relationship between the Social Enterprise Mark and other certification schemes.

Following the official UK launch event of B Corps last night, which I attended, we thought this may be an appropriate time to distinguish how the Social Enterprise Mark is different from other schemes. Of course, it is testament to the strength of the social enterprise movement that there are a number of options available to those looking to accredit their social enterprise credentials, but it may be useful to clarify the differences between these options.

The Social Enterprise Mark CIC is the ONLY UK and international certification authority that independently guarantees that a business operates as a social enterprise, with the central aim of using income and profits to maximise their positive social and/or environmental impact, which takes precedent over more standard business models, which are typically driven by a requirements to maximise personal profits for owners and shareholders.

Applicants must meet the qualification criteria (summarised below) in order to be awarded the Social Enterprise Mark, and are re-assessed each year to ensure they continue to meet the criteria. The Social Enterprise Mark is not a membership scheme – it is a certification, subject to an independent Certification Panel.

Summary of qualification criteria:

  • have social or environmental aims
  • have own constitution and governance
  • earn at least 50% income from trading (or pledge to achieve this within 18 months)
  • spend at least 50% profits fulfilling social or environmental aims
  • distribute residual assets to social or environmental aims, if dissolved
  • demonstrate social value

Approval is not automatic; not everyone who applies for the Social Enterprise Mark is successful, but we will always give advice on required changes. Approximately 30% of organisations applying or expressing an interest in doing so are assessed as ineligible, from the point of initial enquiry, through their application and our assessment, up to the point of scrutiny by the Certification Panel. We review Mark Holders continuing eligibility on an annual basis and whenever an organisation is found to no longer be meeting our criteria, their Mark Holder status is removed.

To help illustrate the key differences between the Social Enterprise Mark and other certification/accreditation schemes, we have produced a useful comparison, which sets out the differences between the Mark and the newly launched B Corp certification.

 

Looking at social impact in particular, we have recently strengthened our assessment of how applicants and renewing Mark Holders demonstrate that social/environmental objectives are achieved. We now require a minimum of three ‘social impact statements’, which illustrate how they are striving to meet their social and environmental objectives. This is to ensure Mark Holders are reflecting upon their social/environmental impact and at the very least can articulate what they are doing year on year to make a difference.

The Social Enterprise Mark is not just an internal assessment for social enterprises to evaluate their social impact; it provides proof that they have been assessed against sector-agreed criteria, and have been guaranteed as a genuine social enterprise.

Subject to meeting the criteria, organisations can become a certified social enterprise and verify their credentials from just £350+VAT per year. The annual licence fee is based on the organisation’s annual income, ranging from £350+VAT to £4,500+VAT.

To find out if you qualify for the Social Enterprise Mark, use our handy criteria checklist. If you are eligible, why not start the application process today to guarantee your social enterprise credentials with the Social Enterprise Mark.

Hooked on government support…

…from one dependency to another

You can’t have failed to notice the high profile fall of Kid’s Company over the last few months.  It reminded me of some of the dangers that can lie in reliance on government contracts for the delivery of public services, which has been repeated as a mantra for the social enterprise sector for nearly 20 years.  This of course is not the only issue for Kid’s Company, but one that I focus on here.

Many forget that, historically, social enterprise has its roots (along with the charity sector) in delivering where the conventional market has failed.  However, unlike charity, it uses a business model that creates enough revenue to either:

  1. deliver very low profit margins to reinvest because the social value/impact is included in their business delivery model which would otherwise increase profits; or
  2. deliver high margins in one activity that supports the cross subsidy of another less profitable social activity, freeing the company to deliver its social mission without the interference of others.

This provides a very flexible model that is really focused on social need. It is often more resilient too because it tends to have a number of revenue generation sources.

The government’s (and others’) wider promotion of opening up public service delivery, and the more recent emphasis on social investment as a means to deliver public services, whilst providing potential profit for investors, have realigned  and shifted the focus of social enterprise policy.  In fact, in my view, the term “social enterprise” was coined in the early 2000’s in many ways as a result of the opportunities that the spin out of public services presented to new and existing social enterprises.

It is perhaps not surprising that the government became so interested in social enterprise, given the drive to look at alternative delivery models.   I remember the Labour Government’s social enterprise strategy was pretty much solely focused on this aspect.  A number of us at the time, including the likes of Nigel Kershaw from The Big Issue, questioned why the government weren’t interested in supporting social enterprise to succeed in the open market as well.

It is only when I speak to social enterprise practitioners and commentators outside England that I realise how focused and obsessed the whole sector has become with government contracts.  We are constantly urged to ‘influence commissioners’ and ‘prove social value/impact’.  We hang on the words of government and the civil service to predict our futures.   But to what end?  To replace one dependency with another?

If we look back, the track record of successive governments have not been good in this area.  It is about to get a whole lot worse.  Commissioner loyalties are fragile and fickle especially in the light of more austerity.

Our collective memory seems to have been removed from us.  We need to spread our risks, focus on how we become less dependent on government and get back to the reason we exist in the first place – to deliver a social/environmental solution through an ethical business approach.

SE_Business_Identifier_RGBThe Social Enterprise Mark certification can help to prove your social credentials, as it encourages our Markholders to reflect on their social mission, value, and their independence, in order to differentiate and promote themselves, in order to achieve a sustainability that best serves the people they are in business for.  Government contracts do count as trading income, but  an overdependence on one source of income that is subject to the vagaries of political pressure never makes good business sense.

Profiteering from the sick and dying

Lucy’s latest blog explores profiteering from delivery of NHS contracts. This blog was first published on the 2degrees network.

At the beginning of the summer there was an announcement that Staffordshire Clinical Commissioning Group plan to contract out their cancer and end of life care to the tune of £1.2bn. By my estimation, given the profit margins of at least 10%, this is at least £120m profit taken out of care services, for shareholders (and could be as much as £240m). I suspect there will be a lot of interest from the private sector as an opportunity to get into this potentially lucrative market.

Almost in tandem with this announcement there was a Daily Mail article which reported survey results showing most people do not care who delivers NHS services as long as it’s free. On the face of this, it is discouraging news for social enterprises. However, if you were to turn this around, given the latest health and care scandals, I’m sure that trust would be the number one priority. Social enterprises with their local knowledge, approachability and transparency are very well placed to engender this. They are not some faceless corporate just after a fast buck, because their number one reason for being set up is to deliver that service to fit their social mission.

I am really encouraged that the Labour Party is now talking about ring-fencing a number of public sector contracts for social enterprise delivery, although this does miss the point that there is an inherent difference in the way that a social enterprise delivers – because of its primary social motivation. I am due to meet with Chi Onwurah and I will be making this point. At least there is recognition that social enterprises do offer a good alternative.

My prediction is that in years to come, we will all be questioning the values (or lack of them) that were used to make public spending decisions.

There must be wider recognition that social enterprises not only often take a lower profit margin, but they are also reinvesting and devising a service that is aimed at the people they serve – a win-win! Just looking at the price and not what’s going on behind the scenes is not good enough. We need commissioners and politicians to understand this fundamental point.