Lucy FindlayLucy Findlay MBE is the founding 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.

Lucy was awarded an MBE in the 2019 New Year Honours, and is publicly recognised on the WISE100 index of the most inspiring and influential women in social enterprise. She is also an Ambassador for the Defra Year of Green Action 2019.

Lucy blogs regularly on a range of topical issues affecting social enterprises.

Coins in a glass jar and three stacks of coins on a table in front on a blurred green background

Navigating a last-minute government loan… is it worth it?

Lucy FindlayUnfortunately, we are in the dreaded second wave and are now facing the resulting increased restrictions to all our lives again. We will be continuing to lobby for more support for the sector with our New Economy Alliance partners, but in the meantime you could consider (or reconsider) the existing government loan schemes, which are open to applications until 31st January.

Since the beginning of the pandemic, I have been working with the Alliance to take a specific lead on banking, trying to work through some of the blockages that social enterprises have been experiencing in accessing government products. In particular, I have been working with Barclays to troubleshoot the common issues.

In order to gain more insight we recently carried out a survey on behalf of the Alliance to get a better handle on the issues for social enterprises, and I have used this information to help you navigate the vagaries of the emergency banking process, should you choose to!

I’ve talked about the challenges around social investment in many of my past blogs. In particular that, as social enterprises, we end up paying much higher interest rates than mainstream businesses due to a lack of understanding of business form and also the perception of risk, backed up by the eligibility algorithm used to make decisions by mainstream finance providers.

Therefore if you can access a fully government backed Bounce Back Loan (BBL), it’s well worth considering due to the excellent terms, which unfortunately current social investors (who are much more social enterprise friendly) cannot match due to their size. This option is what I will be focusing on for this blog.

However, it is also worth pointing out that there is also another scheme – the Coronavirus Business Interruption Loan (CBIL) – aimed at larger businesses, which is more difficult to access due to the requirement for the bank to guarantee part of the loan. A specialist version of this – the Resilience Recovery Loan Fund (RRLF) – can be accessed via consortia of social investors led by SIB Group. If you want to know more, there is a very helpful toolkit put together by Big Society Capital on their website.

Bounce Back Loans

The terms of the BBL include:

  • no arrangement fees
  • zero interest for the first 12 months
  • 2.5% interest rate with re-payment over 6 years (no fee for early repayment)

Essentially, it’s free money for 12 months, which can really help a temporarily tight cashflow and also provide longer term boost with the long repayment terms and low interest rates.

There are a couple of caveats here, though – the first is that the official deadline is the end of November, although we are hoping that this could be extended by the Chancellor. Our survey also picked up on some common barriers for social enterprises, which include:

  • Banks will only lend to existing customers and not all banks offer BBLs. It’s largely mainstream banks and this excludes Unity Trust and Triodos, which are popular banks for social enterprises.
  • If you have to set up a new account with a mainstream bank, start right now as it can take weeks, if not months. Many of the mainstream banks have currently closed to new customers (although this is currently being reviewed in light of the recent extension of deadline to BBLs by the government). On top of this there is a lack of understanding of social enterprise legal structures and governance, which is biased toward Companies Ltd by Shares.
  • In some cases, the banks have subcontracted out the processing of loans, and seem to rely heavily on technology which doesn’t necessarily understand businesses that are out of the standard mould. Thus, it is difficult to communicate with them one to one which can be very frustrating as customers get passed from pillar to post trying to get an answer.

From the limited responses to our survey, the Co-operative Bank appears to be the most straightforward supplier of BBLs for social enterprises, although it has not been bringing on new customers for BBLs. The most problematic banks appear to be Natwest and HSBC, mainly due to issues/delays with setting up new accounts. Barclays has developed a specialist process, but are currently closed for new bank accounts to access BBLs, so only existing customers should apply.

In summary, I would advise anyone with a straightforward Company Limited by Shares or Community Benefit Society model, who already bank with one of the direct providers (especially the Co-op Bank), to consider applying for a BBL.

If you are a Community Interest Company or Company Limited by Guarantee it might be more complicated, especially if you need to set up a new bank account. As the scheme closes in January, it’s best to apply ASAP and be prepared to be patient!

Increasing stacks of pound coins

Building Back Better and
the Growth Obsession

Lucy FindlayRecently I was interviewed about the possible barriers that women social enterprise leaders face in order to scale up their businesses, and it got me thinking: What do we mean by growing? Who are we growing for and why do we need to grow? 

It seems to me that society sees business growth through a very narrow lens – usually increase in turnover, staff and financial profitability, and, in the case of mainstream businesses, increase in shareholder value. But if we are talking social benefit are the same set of assumptions true?

The current economic crisis has highlighted a few trends that might be challenging the above assumption that economies of scale are always desirable. This trend has been stark in retail and food (with the exception of online), where  large faceless chains are now facing financial difficulties and smaller local shops that offer something different and a personalised service are the ones that are more likely to survive.

The government doesn’t want to get it either.  They carry on outsourcing to the same old massive companies to achieve a mediocre service. Social enterprises are encouraged to ‘scale up’ and ape these bland corporate mediocre monoliths. But we have seen the price of this. Look at the failures of these giants in primary healthcare that are now being propped up by the ideology that local can’t deliver.

The excuse is that it is just too complicated to deal with lots of little suppliers who cannot scale up to meet government demand. There are cases where small businesses can come together in consortia, but this is often very complicated to arrange, especially in reaction to opportunities with very little advance warning.

We need to challenge our assumptions about delivering better and more responsive goods and services into a different paradigm that reflects the new world, where the central challenges are tackling climate change and global social inequality.

I was recently made aware of the Government’s Strategic Suppliers list, which work directly with Crown Representatives in government departments. This direct relationship with government highlights the access that many big corporates have to government, which provides a direct channel of communication not open to other smaller suppliers.

So, how do we resolve all this? The Social Value Act provides some openings, but this approach is broad brush and generic. The whole system of social procurement needs to be turned on its head. We need to challenge our assumptions about delivering better and more responsive goods and services into a different paradigm that reflects the new world, where the central challenges are tackling climate change and global social inequality.

The Build Back Better agenda will not be achieved if we build back faster making the same fundamental and outdated mistakes leading to, yet again, the house collapsing in a few years’ time.

Social value is a central tenet for its delivery of a local and sustainable solutions, where the supply chain can be externally verified. The primary motivation should be to make society a better place and lower our carbon footprint.

We need a diversity of business approach that grows sustainably, not a uniform mono-culture which tries to tweak around the edges. The Build Back Better agenda will not be achieved if we build back faster making the same fundamental and outdated mistakes leading to, yet again, the house collapsing in a few years’ time.

Multicoloured image of two hands grasping each other

Are we any better? Bringing diversity to social enterprise thought leadership

Most of us are aware that more diversity within the workplace leads to a better performing business. The WEF recently published a report that shows overwhelming evidence for this. Increasing diversity is also vital to ensure that the business remains relevant to its customers and stakeholders in the way that it both delivers and develops its products and services. This is especially important for social enterprises, as we are trying to ensure that we build more inclusive products and services that are designed to support those that are marginalised from the mainstream market.

The Black Lives Matter protests have highlighted how Black and Minority Ethnic (BAME) people and communities are often designed out of solutions or ignored completely in favour of those that fit with our own images, biases and privileges. We would hope that this is not the case with social enterprises, and the figures from last year’s State of Social Enterprise report are more encouraging, with 13% being BAME led, 35% with BAME directors and 42% BAME social entrepreneurs. However, we certainly cannot sit on our laurels and say we are anyway close to being a truly diverse business sector when it comes to leadership and, in particular in my observations, thought leadership.

I have observed that social enterprise thought leaders are overwhelmingly white and in the main, male. Having been in the social enterprise sector for more than 20 years I think that this trend has become even more embedded without many noticing.

Fundamentally different, by putting social value at the heart, as social enterprises we need to live and breathe our values through our leadership and promotion. Thus, thought leadership is a central plank to our business model and its development. We often play a unique position in policy formulation, advocacy and delivery to those marginalised from mainstream society and the economy on many different levels. However I have observed that social enterprise thought leaders are overwhelmingly white and in the main, male. Having been in the social enterprise sector for more than 20 years I think that this trend has become even more embedded without many noticing.

So, why is this happening? I have been pondering… it may be because we have been trying to over compensate around the business message of social enterprise, thus veering to emulate the business sector? We want to be taken seriously as a business (not a bunch of ‘hippies’ as some would phrase it!) and stereotypical business tends to be dominated by white men talking to other white men.

Without more diverse voices leading the discussions about the direction of social enterprise for the future, we risk narrowing the dialogue and missing the real social issues by ignoring the marginalised voices to whom our goods and services aim to help.

I also think it’s about the assumptions around business growth. Often new-start businesses are much more diverse in their roots and leaders (and the stats show this). However, when it comes to business growth/scaling, the language becomes more complex and finance led, which can alienate and push the original social motivation sideways, i.e. you need the right set of language skills, ‘business speak’ and connections with the likeminded to fit in and get on. Ironically we are asking for our economy to become more people led, but it feels like social enterprise has to fit the old finance led economy mould to grow. I was interested to see for instance, that Divine Chocolate has recently had to change their business model away from social enterprise to grow and gain investment.

Therefore I would argue that we should be promoting, encouraging and supporting far more varied voices in the analysis and leadership of the sector, alongside challenging our recruitment and governance mechanisms. Without more diverse voices leading the discussions about the direction of social enterprise for the future, we risk narrowing the dialogue and missing the real social issues by ignoring the marginalised voices to whom our goods and services aim to help.

Lucy Findlay

Building back better after the crisis

UPDATE 09/06/2020

In the below blog, which I wrote at the end of April, I spoke about now being the time to #BuildBackBetter and how we need a new vision for the future that “transcends traditional political boundaries”.

To be effective, #BuildBackBetter has to be a broader movement, encompassing both sides of the political spectrum, and I am pleased to see more forces do seem to be coming together in this way. Compass, the centre-left think tank, has brought together a core group of trade bodies, think tanks and network organisations to ensure that there is wider ownership of the campaign.

They are inviting others to add their voice to a broad-based call to ‘Build Back Better’ from the coronavirus crisis, which they hope to launch this month. They write:

There should be a simple statement of what #BuildBackBetter means, around which people could gather and from which they can build. We think that can be done by bringing a significant group of civic leaders from across all walks of life as signatories to a relatively short statement, and then publicising this through a mainstream and social media campaign. It is important that this is not led only by those whom the media and political leaders would expect to support it. It needs to come from a group with diverse political views. And it should not be party political – politicians should only be asked to back it after it is launched.

They have created a statement and are now asking a range of civic leaders to give it their support. You can sign up here – they welcome organisations to be signatories as well as individuals.

 


Covid-19 has shaken the world to its core. There is not one aspect of our daily lives that hasn’t been touched, and this is mirrored all across the world. It seems a lifetime since our 10th birthday party and my trip to Siberia at the beginning of March. Life will never be the same again and we now have to face the struggle for survival of vast parts of our economy as we protect ourselves and our loved ones from the unseen danger everywhere in our communities.

The most worrying thing to me is that the situation is exacerbating the huge chasm between rich and poor around the world. Recent research from Oxfam warns that the economic fallout from the coronavirus pandemic could push half a billion more people into poverty unless urgent action is taken to support developing countries.

half a billion more people could be pushed into poverty by Covid-19

We see this especially starkly in countries such as India, where crowded conditions caused by poverty make social isolation impossible, as well as the challenges of an economy dependent on the poor servicing the rich often hundreds of miles away from their homes. The poorest do not have the resources to stay at home, and in some cases don’t even have a home, or a home that is safe. It is the poorest that are dying in much greater numbers due to greater exposure, poor diet and healthcare, amongst other factors. They are also the ones that are likely to face long term economic hardship.

“Social enterprises and community organisations are the businesses that provide the ‘glue’ that holds society together often where the traditional market and public sector doesn’t provide.”

Frustratingly, the government has advocated community solutions to inequality, but largely not funded them. Social enterprise is a case in point. With government divesting themselves of community support programmes and increasingly relying on social enterprises and charities to fill the gaps, they have pushed the business and independent approach to self-help and then snatched this revenue away in the crisis without replacing it.

Instead, there has been a focus on helping social enterprises and charities that are dealing directly with support to tackle the effects of COVID 19. This completely misses the point. Social enterprises and community organisations are the businesses that provide the ‘glue’ that holds society together often where the traditional market and public sector doesn’t provide. They also have greater flexibility to create a more ‘person’ based, flexible  solution in their locality, rather than the clumsiness of a centralist approach.

“The social enterprise sector cannot simply be reinvented if there are major shut-downs. It takes years for social enterprises to become sustainable businesses and they interweave solutions to problems that politicians often do not acknowledge exist or, if they do, they don’t know how to tackle.”

When we emerge from this crisis will the economy and revert back to more of the same (like we saw after the 2008 financial crash), or a more nuanced personal approach that recognises that humans are part of an eco-system? I think most people agree that there was something really wrong with society that let the rich get richer and the poor get poorer. The gulf has been getting bigger every year and on top of this we have a climate crisis.

We need to think differently and social enterprises are examples of this in action. The social enterprise sector cannot simply be reinvented if there are major shut-downs. It takes years for social enterprises to become sustainable businesses and they interweave solutions to problems that politicians often do not acknowledge exist or, if they do, they don’t know how to tackle.

This has to be the time to grasp the nettle and #BuildBackBetter. We need a new vision for the future that transcends traditional political boundaries. We need to be working with both the left and the right and getting the media on board and, more to the point, working outside the boundaries of the UK as well encapsulating a more local approach. A world-wide movement is required that will transcend the forces of those powerful interests that will default to previous setting.

To this end, we are working with partners in the UK social enterprise and social value movement to campaign to #SaveOurSocEnts in order to #BuildBackBetter.

#SaveOurSocEnts campaign partners

We are also reaching out to wider allies, and have become members of the Well Being Economy Alliance, an international movement to put people at the heart of economic decision-making, not economic growth at all costs.

We need to stop being territorial and join together to create a safe and better future for all.

Lucy Findlay with Irina Makeeva, Yulia and Anna (Green Squirrel) at Social Enterprise festival in Novosibirsk

To Russia and back… by the skin of my teeth!

The rate of current social and economic change is breath-taking. My second visit to Siberia will forever be associated not only with the horrors unfolding in Western Europe but also the capacity for human kindness, generosity and love in a society that is often stereotyped and treated with suspicion.

It began as a fairly routine trip, albeit with the Coronavirus headlines in the press but not really penetrating much further than advice not to shake hands and to wash them for 20 seconds. The plane out to Moscow was very quiet, but the final leg of the journey to Novosibirsk in Siberia was packed, as the following day (Sunday) was International Women’s Day, a major holiday in Russia. Novosibirsk is the third largest city in Russia, after St Petersburg and Moscow, and is 7 hours ahead of GMT. The city’s name means ‘new Siberia’ due to its relative youth growing largely over the time since the arrival of the Trans-Siberian Railway and it’s positioning away from Moscow during the Cold War.

On arrival I was greeted by Irina (my exchange peer) at the airport. Hugs that were becoming less commonplace in the UK were still generously shared around and although I mentioned Coronavirus, it was mainly in the context of jokes about toilet paper shortages in the UK!

International Women’s Day celebrates all women and is a big family occasion. I was invited to Irina’s sister-in-law Polina’s house where I met Irina’s family, including her parents-in-law Vladimir and Luba. They live in Chita, which is further East near to the Mongolian border. It sounded a lovely place with its own bottled spring water (although quite an acquired taste!) Vladimir is originally from Buryatia, which is a republic in the Far East (of Russia) where they have their own dialect and the native people, Buryatians, are ethnically similar to Mongols. Luba however is originally from Crimea and told me that it was controversial for her to have married a man from an ethnic minority. Luba is a musician and a very passionate woman and even though they didn’t speak any English, I felt an immediate bond thanks to Irina’s excellent translation services!

Students at the Lel folklore school in NovosibirskThe next day, a state holiday, I was guest of honour at the Folklore School ‘Lel’. This school keeps up the traditions of Siberian traditional singing and dancing for girls who are interested in becoming ‘folklore’ teachers. They taught the stories behind the dances and songs and even invited me to join them to become a dancing ‘fence’!

I was very touched by all the dedication and that the girls showed, particularly when a deaf girl showed me how she passionately ‘signed’ along to a popular song (she was apparently due to sign to the song when the star who sang it appeared in Novosibirsk, live on stage!)

Olga, one of the teachers, spoke English and told me that she had visited the UK in in the 1990s with her mother. Apparently she attended an exchange to Portsmouth and even met the mayor, although they were embarrassed to say that they didn’t remember his name. I explained that mayors of most major cities in the UK are merely ceremonial and it was unlikely the people of Portsmouth would remember either (apologies to any local councillor’s reading this)! Afterwards we all shared some cake, tea and pies (a Siberian speciality) and the students were interested to hear English actually being spoken as a ‘real’ language (not as a school subject). There are so few foreigners that come to that part of the Russia.

Lucy Findlay at Novosibirsk’s Technical University Innovation/Incubation HubFollowing the extended celebrations, we started work later the next day as I was still adjusting to the time difference. We went to speak to a number of students and lecturers from Novosibirsk’s Technical University at their Innovation/Incubation Hub. It was an open invitation and appeared to attract a number of different disciplines including environmental sustainability and healthcare. It was a small gathering, so we were able to have a conversation about the lessons of certification as well as the challenges of different disciplines taking on different agendas. It seems academic silos are the same the world over. It was encouraging that a number of academic social entrepreneurs were very engaged in developing their ideas.

One of the reasons that I travelled to Russia again was because we wanted to explore a new ‘social enterprise regulation’, which was approved by the government last January. This allows mainstream businesses to convert to become social enterprises. There is much more regulation and restriction of organisations depending on their legal structures. For instance, NGOs are largely unable to trade and can only gain income through foundations. This poses challenges and it is hoped that the new law will enable existing ‘for profits’ and new social enterprises to set up.

On this basis, the local Chamber of Business organised an event for local business people, which I addressed with the help of my new translator Yuliya. There was a lot of interest in the idea of social enterprise and some interesting questions. I got the general feeling that social enterprise led accreditation was a welcome alternative to more regulation from government, so I’m not sure how much the new law will help with conversions, although it was interesting to hear that the spirit of the new laws seemed spookily to map our criteria! Perhaps the work that we did a number of years ago with Russia’s Our Future Foundation helped to shape this?

Lucy Findlay with Irina from disability led NGO in SiberiaI also visited a local disability support organisation, set in a very ‘Soviet style’ housing estate. The building (but none of the bills) was provided for free by the local authorities, but this came with restriction clauses in terms of use – no commercial activity was allowed. This was very frustrating for the boss Irina (another one!) who obviously had huge entrepreneurial flare but could not sell the pottery that her clients were making (only donations are allowed).

They had however managed to corner the market in Russian Braille school textbooks, which they are allowed to sell, but these were huge and space restricted due to the building size. We talked through potential solutions, the main being to find a better building as well as potentially setting up a separate trading company, but it seems much local and federal bureaucracy puts up barriers to the development of social enterprise in Siberia, even if there is a new law.

Clothes and fabric at Green Squirrel recycling social enterprise in SiberiaEnvironmentalism is a real growth area in Siberia. Recycling is carried out but it is not yet embedded as there are no kerbside recycling schemes. I visited Green Squirrel, which is run by a very enthusiastic bunch of young people who I met last time I came to Siberia. They collect recycling and reuse/upcycle many of the items donated where they can. I was given a set of waterproof shoe covers made out of old umbrellas (very useful for cycling!)

However, it’s clear that these sorts of schemes have traditionally been ad-hoc and grant led, which means they need to scale up or find other income generating activities in order to achieve financial viability. The concept of cross-subsidisation seems to be pretty new in Russia (or at least to the groups that I encountered), perhaps to historical state and subsequent business culture/NGO grant reliance.

Akademgaradok UniversityThe crescendo of the trip was the 2-day Social Entrepreneurs Festival, which had been one of the main reasons for the timing of my visit. It was held at Akademgorodok – a university about 10 miles outside Novosibirsk in the woods. It’s an amazing campus and has an interesting history, as it was built largely on the initiative of a number of academics who came together in the 1950s to set up an idealised scientific community ‘away from it all’. It’s like a small city within its own right, albeit in lovely wooded surroundings. We were based in a weird, futuristic building locally nicknamed ‘the geese’ as it emulated two geese kissing.

The festival brought people from towns and cities across Siberia. I was the only international visitor and it seemed hard for people to get their head around the fact that I wasn’t from London… Devon was not a place that they had heard of!! I was one of the headliners but it was a new challenge giving a keynote whilst waiting for translation. I was feeling a bit off colour too, so was worried that I might be Case 0 of Coronavirus in Siberia!!! I also had an interesting discussion with an American who has lived in Russia since the 90’s (I first met her last year). She had some great ideas about the greater level of ambition that the social enterprise world should be taking in Novosibirsk given her US experiences.

Lucy Findlay speaking about social value at workshop at Social Enterprise festival in NovosibirskI was relieved that I felt much better on the second day when I ran a Social Impact workshop talking to a number of NGOs with Irina and Yuliya on translation duty. We used our Social Impact Guidance to take people through the steps and discuss each point, in groups. Because we had a number of new organisations in the group some of the discussions were more academic, but it did help to clarify better the objectives and plan for the impact that they wanted to make.

I was amused to have a very nice guy in the group who was representing Siberia’s arm of Putin’s political social support organisation. I tried to persuade him that their social impact should be about supporting and enabling social enterprises rather than setting them up and running them!!

The festival was my last official appointment, but alas not the end of dramas due to Coronavirus. During my last evening in Novosibirsk I had a message from my brother saying that Russia was partially closing its borders. The message was ambiguous so it wasn’t clear whether my flight from Moscow airport would be cancelled. I quickly got in touch with Irina and my husband to see if we could find out more. We couldn’t ascertain much so I was on tenterhooks until I finally made the flight back from Siberia to be reassured at the airport that my connecting flight from Moscow was indeed still scheduled. Of course subsequent to this I realised that other people abroad have not been as lucky as I was.

Coronavirus aside, it was an amazing trip and many heartfelt thanks go to Irina, her family and her colleagues at the Siberian Centre. I hope to be able to return the hospitality when she is finally able to visit us in Devon, although I don’t know if we will ever be able to compete with the warmth and friendliness of the Siberian people. I have now been bitten by the bug and long to go back, maybe as a tourist, to explore the amazing lakes and countryside – but probably later in the summer (or beyond) when there is no danger of a global pandemic!!

Lucy Findlay with Irina Makeeva, Yulia and Anna (Green Squirrel) at Social Enterprise festival in Novosibirsk

Gift box with red ribbon

Beneath the marketing wrapping:
is social value at the heart?

Our 10-year anniversary has given me cause to reflect more so than usual.  To me, the world seems to have become much less transparent and harder to negotiate. What you see might not be what you actually get, e.g. fake news, greenwashing/purpose washing, uncorroborated rumours on social media etc. In light of this, ‘authenticity’ has become the new buzz word in all walks of life, including the business world.

Many businesses are all striving to differentiate themselves through talking about being ‘purpose driven’ and authentic to their values. But what evidence is provided that they really are doing business differently? Or is it just a thin veneer or ‘wrapping paper’?

“With so many jumping on the bandwagon in the social value world, it’s getting harder and harder to differentiate.”

The argument is often made that if more businesses are aiming to be more impactful then this is inherently good. However, if this is not backed up with action then it can lead to cynicism, particularly when it’s obvious that the evidence points in a different direction. One thing is clear, the current status quo is not working so we need to get more radical and less image conscious.

This is why you need to get under the wrapping to get to the heart; what is the real motivation?  We need to ask questions, such as:

  • Is there any proof of impact and purpose claims or is it just a cynical ploy and tick-box exercise used as part of a marketing strategy?
  • Who has overall responsibility?
  • Is it part of the organisation’s governance?

With so many jumping on the bandwagon in the social value world, it’s getting harder and harder to differentiate. I would argue that at the core/heart of this is whether the company is mission driven or shareholder driven, as by definition, shareholder primacy always puts the financial gains over other considerations.

“Profit is a desirable by-product and allows for the creation of greater social value; it is not an end in itself, it is a means to an end. Social value is at the heart, not just a convenient marketing wrapper.”

How do companies act?Despite public and business perception, shareholder primacy is not enshrined in law in the UK and there is some flexibility, which is why we are part of the How do Companies Act campaign.

But this is not the case in the USA. The rise of the B Corps in some North American states helped to challenge this assumption by providing a new alternative legal structure facilitating deviation from the domination of shareholder financial gain. Outside the USA, the B Corp model has helped to indicate that a business can sometimes change its governance to promote business as a force for good, but this is only a small step change in the right direction. It’s important to remember that B Corp status is not the same as social enterprise.

I would recommend listening to the below recent podcast from our US colleague Eric Lombardi, who set up the USA’s biggest zero waste social enterprise, where he talks about how we can change the face of business. He explains so well his thoughts regarding turning current thinking on its head to address huge environmental waste challenges, not only in the US but worldwide. He explains how social enterprise presents a unique way forwards over and above B Corp.

We need to be more radical, as even B Corp status does not address the fact that shareholder value is still a central tenet. This is fundamentally different from businesses that put the act of solving an environmental and or social problem at the heart and why they were established in the first place.

This is why the restriction of shareholder profit and asset lock in social enterprises is so important. Profit is a desirable by-product and allows for the creation of greater social value; it is not an end in itself, it is a means to an end. Social value is at the heart, not just a convenient marketing wrapper.

Social Enterprise Mark 10th anniversary

A new decade marks ten years of the Social Enterprise Mark

As is my usual custom as we begin a new year, I wanted to share my reflections on 2019 and look ahead to what 2020 (and a new decade!) may bring.

Lucy Findlay at launch of the Social Enterprise Mark in 2010

The national launch of the Social Enterprise Mark in February 2010

I am particularly excited about this year, as it marks the tenth anniversary of the launch of the Social Enterprise Mark. I am so proud of what we have achieved during this time – the Mark has evolved from a regional, funded project to now being the only internationally recognised standard of good practice in social enterprise. We aren’t resting on our laurels though, we have bold ambitions for scaling and building firmer foundations for our work, both in the UK and internationally, and I am excited about the opportunities that lie ahead for us in 2020.

In my new year blog in 2019, I mentioned there was likely uncertainty ahead for the sector, as well as the wider world. Well, here we are a year later and not much has changed on that front! Once again, I think we need to buckle up and be prepared to evolve to adapt to changing situations and take advantage of opportunities as they come along.

The good news is that this is something that we social enterprises excel at! The latest sector research from Social Enterprise UK showed that, despite the economic and political turbulence, UK social enterprises are outperforming mainstream SMEs in terms of increasing their turnover, hiring more staff, high levels of innovation and increasing their social impact. This positive trend is also mirrored internationally. Our visit to the Social Enterprise World Forum in Ethiopia last year gave us a real flavour for the diversity and innovation that social enterprises are exhibiting internationally.

Challenge is where social enterprises thrive, so I feel confident that we can continue to come together as a sector to tackle these and be recognised as a credible and sustainable business model, as well as standing out from the crowd with our different way of doing business.

It’s always hard to summarise what has happened over the course of a whole year into a few sentences, but I have picked out a few of my highlights from 2019:

Moving forwards, these are our plans and priorities for the year ahead:

Providing a pathway to good practice and excellence

As always, our main focus will be on providing robust and credible standards for the sector and supporting social enterprises to demonstrate the added social value they create.

After ten years of developing these standards, we have built a portfolio of accreditations for social enterprises at every stage, which provide a comprehensive pathway to good practice and excellence.

Social Enterprise Mark CIC accreditation badges

In an effort to support those just starting their social enterprise journey, we have recently launched the new Aspiring Social Enterprise accreditation. This entry-level accreditation helps new start-ups to demonstrate their commitment to social enterprise principles from the start and offers tailored support to achieve the recognised standards of good practice represented by the Social Enterprise Mark.

Developing more partnerships

Increasingly, I see our future in creating alliances with like-minded partners (in the UK and further afield), which believe in the need for accreditation. This helps our visibility and reach to social enterprises around the world and will amplify the message and help to create a more global movement for better business and making a difference.

The valuable connections we made at the Social Enterprise World Forum last year will, I hope, mean that we develop closer working relationships to build our knowledge of the social enterprise movement in different countries. We plan to attend the World Forum in Canada later this year, and we also have a couple of international exchange visits, with Richard taking part in the Euclid Network MedUP! peer exchange with a partner in Tunisia, and I will be returning to Siberia to follow up with contacts made during my visit there last year.

Aligning our criteria with the SDGs

Sustainable Development Goals wheel iconResponding to feedback from our Mark holders and international partners, we acknowledge that the Sustainable Development Goals (SDGs) provide a powerful global framework to address the pressing social and environmental issues that we all face, and are pleased to have joined the UK Stakeholders for Sustainable Development (UKSSD), which brings organisations together to accelerate progress on the Sustainable Development Goals in the UK.

The work of social enterprises spans these various goals and accreditation is a constructive force in ensuring organisations maintain a momentum towards achieving them. We are looking into aligning our accreditations with the SDGs, especially with regard to how Mark holders report on their social impact. We have made a start on this by asking Mark holders to report on which SDGs they include in their monitoring and reporting of social impact, as part of the annual and full review assessment process. We have also added a new section in listings on the directory to show which SDGs our Mark holders are working towards.

Recognising long-standing Mark holders

Save the date; 2nd MarchLast but by no means least we are so excited to be celebrating the tenth anniversary of the Social Enterprise Mark this year. We are planning an event in London to mark the occasion – more details to follow soon, but in the meantime do put the date in your diaries… 2nd March.

A key part of this celebration will be recognising those organisations that have held the Mark for ten years. We certainly couldn’t have made it to this milestone without these pioneers, which recognised the value of the Mark to their organisation and the wider sector, and I want to personally thank them for their support over the last decade.

I hope as many as possible can join us for the celebrations on 2nd March. In the meantime, all the best for the year ahead!

Artist painting a wall with 'The future will be different' written on the back of their jacket

Social enterprise Vs.
anti-social enterprise?

Oxfma report: just 8 billionaires own the same wealth as the poorest 3.6 billion peopleRecently there has been a flurry of news and a growing acceptance from the public that the brand of capitalism that puts the shareholders’ interest above all else, is broken. Indeed, the FT recently reported that City Fund managers are calling for a radical rethink and an end to the constant obsession with economic growth.

We are in the middle of societal and environmental disaster, made evident by huge levels of income inequality and poverty (last year Oxfam reported that the world’s richest 1% bagged 82% of the world’s wealth), as well as the Climate Emergency.

It was also interesting to see the recent announcement by the Labour Party regarding their intention to revise the Companies Act to “take on the excesses of the shareholder model and lay some of the foundations of a stakeholder economy”, should they win a majority at the upcoming election.

Last week a shocking new report from the TUC and High Pay Centre highlighted just how broken the ‘shareholder first’ model really is. The evidence set out in the report shows how, in the corporate world, delivery to the shareholder has become an obsession.

Even those more enlightened CEOs who have tried to move outside the straightjacket to take into consideration people and planet (e.g. Unilever) have ended up being potentially strong-armed back into the prevailing model by becoming vulnerable to ‘Hostile Sustainability Raiders’ – i.e. hostile takeover organisations that jump in (in order to make quick financial returns) because the share price has dropped due to lower dividends. Short-termism is factored indelibly into the corporate business model.

The evidence of the resulting behaviours leads to stark consequences not only for those working for those companies, but also to their wider stakeholders and communities. The more money that is extracted for shareholders, the less there is for anything else. Corporate Social Responsibility (CSR) budgets, increases in wages for workers and social and environmental impact come in as the ‘poor relatives’.

The following startling statistics illustrate the reality versus the hype:

  • In 2018, BP spent 14 times and Shell 11 times more on their shareholders as they invested in low carbon activity
  • Between 2014-18, while FTSE 100 returns to shareholders rose by 56%, the median wage for UK workers increased by just 8.8% (both nominal)
  • In 2018, the 4 largest food and drinks companies paid shareholders almost £14 billion – more than they made in net profit (£12.7 billion). To put that into perspective, just a tenth of this shareholder pay-out is enough to raise the wages of 1.9 million agriculture workers around the world to a living wage
  • Gender inequality is much higher in FTSE 100 companies (the gender pay gap is double the national average), as cheaper women’s labour helps to support increased shareholder returns

Person holding banner saying 'Planet over Profit'Shareholder primacy is reinforced in the Section 172 of the 2006 Companies Act, which requires company directors to act in the interest of shareholders, and only ‘have regard’ to a wider set of stakeholders. There are no significant examples of a director being held to account for their failure to ‘have regard’ for their wider stakeholders. We are working with Social Value UK and other partners to change this.

The How Do Companies Act campaign aims to change accounting behaviour to ensure that accounting practice also takes consideration of social and environmental impact.

Social enterprise (a business model that puts society and the environment before shareholder profit) is part of the solution to this rampant anti-social/environmental trend. We have been saying this for a long time.  Rather than shareholder gain being the sole driver, social enterprises focus on the three ‘P’s:

  • Purpose – social mission locked in through governance and legal form as well as creating social impact as a central tenet (including environmental objectives and impact)
  • Profit – profit and dividends shared by stakeholders for the benefit of the purpose. Check out my colleague Richard’s recent blog for more information on this
  • Power – the involvement of and dialogue with stakeholders around decisions making

Social enterprises (that hold the Social Enterprise Mark/Gold Mark) dedicate a majority (at least 51%) of their profits to social and environmental purpose, as well as being dedicated to changing society for the better in the way that they conduct their core business. They therefore compare favourably on many different indicators of social benefit mainly because they are focused on social good:

Social Enterprises

(Source: State of Social Enterprise 2019)

FTSE100 (Multiple sources)

Pay real Living Wage

76%

37%

CEO to worker pay ratio

8.4:1

145:1

Shareholder profits

25%

80%

Directors from ethnic minorities

24%

2%

Female CEOs

41%

7%

Given all of this, it is pretty clear that if we are to change society for the better and to tackle the climate emergency we need to challenge much more radically what it means to be a business. We need to stop teaching and assuming that it’s all about getting financially more wealthy and see wealth in a much wider context – creating a better world for all.

Performers at the Social Enterprise World Forum 2019 opening ceremony in Addis Ababa

Getting out of our rut and into the colourful Brave New World!

Lucy Findlay speaking to visitors to SEMCIC stand at SEWF 2019I loved the recent Social Enterprise World Forum, not necessarily for the speeches (as I was busy running our stand so didn’t see those), but for the inspirational people that we met and spoke to. Ethiopia provided a boost to energy levels and a lack of cynicism that is humbling. It made us question ourselves but at the same time feel part of a wider picture.

It was colourful, enthusiastic and buzzing. It didn’t matter that the buses were late for dinner, the feeling of being part of something huge and positive more than made up for ‘Africa time’!

I read Heidi Fisher’s recent blog, where she shared her own reflections on the conference, and she is totally right – we are playing too small. We need to embrace the world and accept that we are not leading the way in the UK. We have so much to learn from those that literally have to get up and go and do it for themselves (albeit with the aid of technology). Someone said to me recently “If there is no money, then it forces partnership work” and they are right. Where there is a will there is a way.

It also highlights the very small world that the UK social enterprise sector inhabits and the rut that we have got into whilst much of the world around us has changed. For example, the obsession that we have for replacement of the state in the delivery of public services and more recently the metamorphosis of getting into corporate supply chains. I am not suggesting that these are bad, but we need to recognise them for what they are; someone else’s agenda – sometimes the means to an end but not an end in themselves.

“Let’s stop arguing about definitions, how we influence government policy and how to get corporations to take us seriously, and instead work with partners to develop a new more colourful and ambitious vision where social enterprise has a key place in changing the World.”

We need to turn this on its head and get back to our roots where social enterprises’ strengths are –  to deliver where the market fails, because it focuses on doing good, not making money for shareholders. African social enterprises models inspire us because that is exactly what they are doing, without funding, government contracts or supply chain deals (as Heidi refers to in her video above).

You can find out about the conference speakers here, and Pioneers Post provided great coverage of the event.

We need to find our family and replug into our values and drivers as well as starting to connect more effectively into those that share them. It was great to chew the fat with a number of people internationally who share this vision, but we need to translate this into action. We at Social Enterprise Mark CIC are in the foothills but want to find others that want to climb the hill!

Let’s stop arguing about definitions (we all know what’s important), how we influence government policy and how to get corporations to take us seriously, and instead work with partners to develop a new more colourful and ambitious vision where social enterprise has a key place in changing the World.

Collage of photos from the Social Enterprise World Forum 2019

Person holding sign saying 'Planet over Profit'

Social enterprise:
to profit or not to profit?

By Richard Cobbett, Assessment and Compliance Manager

Richard CobbettArguably, what principally distinguishes a social enterprise from other forms of commercial enterprise – including other types of “social business” – is the commitment to distributing the majority of profits generated towards social purposes. So why is it that some social enterprises take pride in the label of being “not for profit” organisations – literally going out of their way not to generate a profit? The irony of this is that it could be said these social enterprises are failing to adhere with the fundamental principle that distinguishes their business model.

“wouldn’t it be more useful focusing on what a social enterprise is, rather than resorting to a somewhat reductive label of what it is not?”

There are some who therefore flinch when they hear this “not for profit” label being used in describing social enterprise. As shorthand, it describes an organisation that is not primarily constituted to create personal profit for individuals, or other purely commercial interests – which includes organisations who may not be primarily constituted to serve social needs, address community disadvantages, or similar interests. So wouldn’t it be more useful focusing on what a social enterprise is, rather than resorting to a somewhat reductive label of what it is not? The label can be as misleading as it is helpful, sometimes seeing social enterprises written off as unviable businesses, not worthy of support and investment – because they are deemed to be “uncommercial”.

One possible complaint is that the social enterprise model of profit distribution is one that prevents a business from investing in its commercial success, therefore making it less viable. But this is false: a social enterprise is not prevented from retaining and using profits to sustain, develop or grow the business. If there are additional profits beyond this available for distribution, dedicating them to social purposes, rather than the pockets of individual investors, does not intrinsically make social enterprises any less commercial.

“The more profitable a social enterprise is, the more it can invest in activities and resources that create social benefit.”

GrowthThe reality is a social enterprise should operate along the lines of any other form of business. A social enterprise is committed to pursuing commercial success through trading, but it does so in support of its social objectives and to maximise its potential to generate social benefit.

The sustainability of a social enterprise, and its ability to maximise social outcomes, is therefore dependent on it being commercially successful – in it being profitable. The more profitable a social enterprise is, the more it can invest in activities and resources that create social benefit. But on a more vital level, being a profitable business means a social enterprise is helping ensure it can continue to exist and fulfil its social purposes in the long term.

Some social enterprises may justifiably argue that their in-year expenditure represents an investment in social purposes that has resulted in a deliberate suppression of would be profits; furthermore, in doing so they have avoided corporation tax and have therefore been able to invest more in their social purposes by doing so. Just because they resourcefully managed their income in a cost-effective fashion within the business year, does not necessarily mean the business is unprofitable. This leaves the question, does being a profitable business mean a social enterprise has to show consistent profits each year?

“The model in which a social enterprise “spends all it earns” does not necessarily mean they are either unprofitable or failing to maximise their social output: they may instead be maximising it through the application of income that could have turned into potential profit.”

Although this is a more immediately transparent indicator of commercial success and viability, it is by no means the only one. The social enterprise commitment to profit distribution should necessarily take into consideration its ongoing expenditure and investment, both in terms of how these show fulfilment of social purposes as well as actions to remain commercially viable. But how a social enterprise actually demonstrates its primary commitment to investing in the achievement of social purposes is much more of an organic process; there is rarely a neat equation of “x profits from last year = y social output this year”. Plus, the model in which a social enterprise “spends all it earns” does not necessarily mean they are either unprofitable or failing to maximise their social output: they may instead be maximising it through the application of income that could have turned into potential profit.

How a social enterprise reviews and reports on such matters to stakeholders and communities of interest therefore becomes significant in being able to show transparency of action in line with stated purpose and principles of operation. At the very least it represents good practice for social enterprises to aspire to this.

“Broadly speaking, (expenditure on social impact) falls into three categories: service enhancements, delivering free or subsidised outputs, and altruistic contributions.”

It is fair to say that approaches to social impact reporting amongst our Mark Holders are mixed (which is likely a fair reflection of the sector in general). Most social enterprises just take for granted that income and profits simply carry on sustaining their general social mission. But simply highlighting key areas of expenditure and investment does not have to be a costly or time-consuming exercise, and it at least shows a willingness to explain such matters – which a social enterprise can then be held accountable to. In having started to ask Mark Holders questions about their social impact, we are starting to see common sorts of example emerge in this regard.

Broadly speaking, this falls into three categories:

  1. Service enhancements. These are investments which go “above and beyond” service delivery requirements and expectations – ones that add value or reinforce the capability to deliver social outputs (delivering them “better”). This can include:
    • Additional infrastructure serving stakeholder needs;
    • Tools/equipment and similar resources employed in support of stakeholder needs.
    • Recruitment or training of people that is not recognisably a service requirement or expectation, but which adds to and/or improves the quality of social output.
  2. Delivering free or subsidised outputs. These are investments which show how social enterprises “deliver more” social outputs. This may take the form of:
    • Pro-bono work;
    • Outputs or outcomes in excess of contracted amounts (that are therefore unpaid);
    • Providing subsidised or free products, resources or materials, that may typically form part of a costed and paid-for service (or go beyond what this usually involves).
  3. Altruistic contributions. This is most commonly financial and therefore more easily quantifiable – donations to charities, community groups, projects etc. that support wider social or community needs. But it also encompasses other types of resource contribution. For example:
    • The free use of company resources, loans or donations of other properties, in support of social or community needs (premises space; equipment; other materials or usable assets);
    • Allowing employees to volunteer in the community, or do fund-raising on paid time.
    • Sponsorship (this may not be entirely altruistic as it involves a promotional benefit but the financial contribution could be well in excess of the value this has).

“Social enterprise is a model through which capitalism can be “re-booted”: inherently hardwired to benefit society, not just as side-benefit to the “for individual and commercial profit” motivations of shareholders and owners, but as a primary socio-economic purpose.”

There is much to be gained by raising public understanding of social enterprise as a commercial business model that generate income and profits, primarily in service of public benefit – not simply as “not for profit institutions”. Dare I say it… social enterprise is a model through which capitalism can be “re-booted”: inherently hardwired to benefit society, not just as side-benefit to the “for individual and commercial profit” motivations of shareholders and owners, but as a primary socio-economic purpose. Given the right focus and support, social enterprise can be the harbinger of lasting social change, helping reverse the deeply worrying trend through which the worlds wealth and resources are increasingly converging into the hands of the few.

Maybe this is an idealistic pipedream. But if social enterprises were to get better at shaping the conversation in these terms, it means they are more actively playing to strengths they can use when convincing others to support and do business with them.

Social Enterprise Mark logoThese arguments are bolstered by a willingness to stand up to external scrutiny of such claims, and achieving recognition for how they live up to them. This is why the Social Enterprise Mark exists. Through accreditations that define standards of good and best practice, Social Enterprise Mark CIC provides social enterprises of all shapes and sizes with a platform from which to build and better communicate what they are.

Challenging the tribal culture to create a brave new world

Given our current political situation we see the negative effects of self-interest and not seeing other points of view at first hand. Many of us ask, why can’t we all work together towards the common good? The sad thing is that tribalism often trumps deviating from the party line in our political system.

In my professional life I have sat in a number of business fora over the years and I often feel like I don’t fit and identify properly. It’s often about the prevailing assumptions, accepted positions and customs and practice that lead to certain behaviours, without any real questioning of those underlying assumptions, i.e. a culture. I’m pretty sure it’s not just about me running a different type of business, more about a dance where everybody knows the steps and cannot deviate from the pattern. If you are unaware of or question the steps, you are cast out or never permitted to be part of the dance (unless you chose to learn them and fall into line of course).

“we need a more a more democratically accountable leadership with clarity about who we are, why we are different and how we can change the prevailing business model.”

Over the years I have found a more extreme version of this lack of fit in the social enterprise world. I’m not sure it is just because I am a woman, although some of it undoubtedly is. Given the wider involvement of women in leadership positions, and the maturation of the sector you would assume that this type of block was less common. However, I feel it’s worse as the tribal culture has spread with the growth of the term across the world.

Don’t get me wrong, there are many social enterprises and leaders beavering away at trying to change the world and supporting each other to do this, but then there are others that decide whether you fit into the established model of the way to do things. If you challenge prevailing thought, then you are irrelevant or worse to the self-nominated gatekeepers. A language of inclusivity and supportiveness hides the maintenance of the status quo.

I don’t think that this will lead to the best results for our movement. We need to be business led and entrepreneurial with more creativity and diversity to ensure that the sector is not just seen through one lens. I’ve been giving it a lot of thought and we need a more democratically accountable leadership with clarity about who we are, why we are different and how we can change the prevailing business model. Most importantly, it should be led most importantly by social enterprises, boosted and supported by those that that share our true values.

“We need to learn from the huge wealth of experiences internationally, instead of trying to control and fit everyone into the same old mould.”

Lucy Findlay and Rebecca Dray signing Social Enterprise Mark franchise agreement

I am currently delighted by the discussions that I have had recently with my colleague Rebecca Dray in the USA about the different attitudes that she sees on a day to day basis. The sector there is largely untapped and there is so much enthusiasm for an openness and transparency about trying something different. We need to go with it and learn from the huge wealth of experiences internationally, instead of trying to control and fit everyone into the same old mould.

I love social enterprise, but we won’t grow and develop and reach our true potential if we don’t welcome diversity.

Lucy Findlay

Tips for getting started in social enterprise

Social Entrepreneur IndexI was delighted to be involved in judging applications for the inaugural Social Entrepreneur Index earlier this year – it’s always great to see more people join the social enterprise community, committed to running their businesses for the good of people and planet.

I know it can be a daunting prospect for those just starting their journey into social enterprise, so as a ‘seasoned campaigner’, I wanted to offer some advice to start you off on the right track:

  1. Clarify your business proposition – regardless of how virtuous your social mission is, if you don’t have a viable business proposition behind it then it will be hard to create social value that is sustainable in the long-term.

  2. Do your research on the market you are entering and be clear from the outset on what it is that your business will deliver, and to who. Defining who your customers are is very important – you can then involve them in the development of your product/service offering to be sure it meets their needs.

  3. Be clear about what it is you are trying to change – you will need to be able to clearly articulate what issue(s) you are addressing and what changes you aim to make. This will make it easier for you to communicate your mission to your stakeholders (customers, employees, partners, local communities etc), and will help you to measure the impact you are having. We routinely ask our Mark holders to demonstrate how they are working to meet their social objectives and realise this isn’t an easy task for most. We have developed a set of social impact questions, which are designed to help social enterprises think about the social impact they create, and to communicate this clearly and succinctly.

  4. Get advice and support – build relationships with those who support your mission and share your vision – create a network of allies who can offer advice and point you in the right direction. Take advantage of the advice and guidance that is available for new social enterprises just starting up, such as the packages provided by UnLtd. Also, learn from the experiences of others – checking out the Social Entrepreneur Index Ambassadors is a good starting point, as they have a wealth of experience and insights.

Aspiring Social Enterprise accreditationIn our mission to support social enterprises at all stages to work towards credible sector-agreed standards of good practice, we have recently introduced an entry-level accreditation for aspiring social enterprises. This enables new social enterprises to prove their commitment to social enterprise principles from the outset, and get started on the pathway to social enterprise excellence.

Applicants will receive tailored support throughout their social enterprise journey, initially enabling them to understand how they can meet the good practice criteria defined by the Social Enterprise Mark, which will hopefully provide useful considerations for future development. For example, we offer tailored support to enable you to get started on measuring and articulating your social impact.

To find out more please get in touch – you can call our helpline on 0345 504 6536 or can register your interest here.


First published on the Social Enterpreneur Index website on 12th August 2019

Rachel Fell at UIMP social enterprise conference_Santander July 2019

Reflections from Santander

By Rachel Fell, Business Development Manager

Buenos Dias! Hola, me llama Rachel Fell. Which, translated to English is … Good Day! Hello, my name is Rachel Fell.

This is about the extent of the Spanish I managed to speak during my presentation at the Social Enterprise and Sustainable Development Goals conference a few weeks ago in Santander, Spain.

Luckily, they had translators on standby to translate our presentations to the Cantabrian people, as well as those visitors from further afield. It was my first visit to northern Spain – and what a delight it was… wonderful food, wine, and coastal walks, accompanied by a comfortable climate. As you may know, they do not speak much English in northern Spain (hence the need for translators), so I had to dig deep to bring out some of the trusty phrases I learnt back at school to get me by whilst I was away on this trip!

Rachel Fell presenting at UIMP social enterprise conference in Santander July 2019I was invited to speak by Ana Fernandez-Laviada, a Professor at the University of Cantabria, who I met at an Enterprise Educators UK event last year, which was hosted by Social Enterprise Mark Holder Plymouth Marjon University. I was asked to talk about the Social Enterprise Mark accreditation initiative and how this is working in the UK, particularly within the education sector, and also to share our experience in international development.

The event, organised by the Cantabria International Campus, UIMP and the University of Cantabria, was held at the beautiful Palacio de la Magadalena. The objectives of the week-long event were to raise awareness of social enterprise and to inspire organisations and individuals to implement social enterprise initiatives.

Rachel Fell outside Palacio de la Magadalena in Santander

I was speaking on Day 2, which opened with Professor Jonathan Levie of the National University Ireland Galway. Jonathan shared some great examples of students who have gone on to start their own social enterprises, such as The World’s Big Sleep Out, Revive-Eco.com and the Ocean Clean Up.

Jonathan ended his session by sharing with us some interesting statistics on the distribution between economic, social and environmental motives of entrepreneurs in the UK. Interestingly, back in 2009 the biggest motivator was economic fulfilment, whereas now the focus is much more centralised between all three – phew, how reassuring to see how this supports the demand for the social enterprise business model!

He also emphasized how “It’s about being entrepreneurial, not just about wanting to start a business”, which I know we all feel strongly about here at SEMCIC when talking to our Mark Holders about being credible businesses who know how important it is to balance their social mission alongside being sustainable.

Karel Vanderpoorten from the European Commission followed with a session sharing what they are are doing on social enterprise and also shared some great examples of social enterprise initiatives from around Europe, such as The Social Club in the Hague and Magdas in Austria.

This was followed on nicely by Holke Brammer of Yunus Social Business, who shared their plans to address and support the Sustainable Development Goals using 5 pillars:

  1. Access to Finance
  2. Access to Market
  3. Improving framework conditions
  4. Social Innovation technologies and new business models
  5. International collaboration

Gareth Hart presenting at UIMP social enterprise conference in Santander_July 2019Following my own presentation, Gareth Hart, Director of Plymouth’s social enterprise Iridescent Ideas and Chair of the Plymouth Social Enterprise Network (PSEN), shared with the audience all the great things the ‘Social Enterprise City’ of Plymouth is doing around social enterprise and how PSEN supports this work.

So, all in all it was a fantastic day to attend. The other speakers were very interesting to listen to and network with. Although I can give an account of the days programme I participated in, it was just a small part of what was organised across the week.

Other speakers included the CEO of AUARA (the first Spanish social enterprise to be awareded the Social Enterprise Mark) Antonio Espinosa, our good friend Dr Emily Beaumont of Plymouth Marjons University, Chris Blues from the Skoll foundation, as well as representatives from B-Corp, UnLtd, Ashoka and Enactus. The week was closed with the awarding of a Honoury Doctorate to Professor Muhammad Yunus.

I came away from the event feeling a camaraderie with those I met and talked with, who are also serving to promote the inspirational and diverse world of social enterprises. In a time of much uncertainty and fragmentation between countries, it was nice to feel that together we all have the same passion and drive to make the Sustainable Development Goals work and create an environment where social enterprises thrive.

 

Lucy Findlay

Challenging perceptions to close the disability employment gap

Friday 28th June was the fourth UK Employability Day; a day for employers and employment support organisations to celebrate their hard work supporting people to enter or progress in employment. The theme this year was ‘Closing the Gaps’; with the disability employment gap – the difference in the rate of employment of disabled and non-disabled people – at around 30%, a figure which has remained unchanged for more than a decade, action clearly needs to be taken.

I’m very new to this specialist field but my main observations have been that disabled employment often seems to be stereotyped into a) volunteering or b) low paid manual work. According to Scope, 1 in 3 people see disabled people as less productive than non-disabled.

Such attitudes have led to significant unemployment, underemployment and under-valuing of the skills that disabled people can bring to the workplace. Often, this could be changed with minimal adjustments and a more flexible and creative approach to how a particular job is carried out.

Disabled employees photo montage

I watched the final episode of The Restaurant that Makes Mistakes recently and although it did a good job of raising the profile of what people with dementia can do on a voluntary basis, I was disappointed that a) it could not be carried on as a social enterprise if it was a viable business, and b) that it’s led to mainstream restaurants taking on more people with dementia in an unpaid capacity. If they are doing a good job, why are they not being paid for it? Disabled people should not be subsidising the profits of the restaurant trade!

With this in mind, we welcome some positive messages coming out of Government – Theresa May recently announced a set of new measures to break down barriers faced by disabled people. This included a consultation on proposed measures to help employers better support disabled people and those with long-term health conditions in work, which will be published soon.

At a recent roundtable discussion with DWP and organised by UnLtd, I was pleased to connect with like-minded businesses to look at how social enterprises and entrepreneurs can be supported to address the disability employment gap and to support UnLtd in its aims to help address this with Government.

Social Enterprise Disability Employment MarkOver the last 18 months, we have been working with the Supported Business Steering Group to develop a new quality standard for social enterprises that have a focus on providing supportive employment for disabled people. The Social Enterprise Disability Employment Mark (SEDEM), launched in April, has been designed to ensure that employment standards for disabled people are raised and are fulfilling the greater challenges set out in the 2011 Sayce Report, which examined how more disabled people could be supported into employment.

SEDEM recognises exemplar employers that promote equality and diversity, by providing valuable support to those people that encounter the greatest barriers to work, enabling them to find and maintain meaningful employment. It’s not just about providing a job for disabled people, it’s about creating good quality jobs and providing a pathway for career development.

We want more social enterprises and entrepreneurs to think about how they can move into being exemplars of good practice in helping disabled people get decent jobs. We encourage people to register their interest in applying for this new standard of transparency, which includes a Committed status for those that are not quite there yet.

We need to shift attitudes and move to action. Many people experience some kind of disability or long term condition over their lifetime. Currently we are missing out on the extensive skills that disabled people can bring, and the fact is that increased diversity in the workplace can actually increase business performance.

Social enterprises are well placed to lead by example, being values led businesses. So what’s stopping us?

 


Guest blog written for UnLtd, published on 19th July 2019

Lucy Findlay

Outside our echo chamber – getting the bigger picture on growth

Sometimes in the social enterprise world it can feel like we are talking into an echo chamber. We all want to change the world, but we are talking to ourselves!

Cathedrals Group Lord Dearing Memorial Panel May 2019Earlier this moth, I was privileged to speak at the Cathedrals Group annual Lord Dearing memorial lecture panel. A question was raised about the priorities for personal action on climate change.

I was sitting alongside the eminent environmentalist Sara Parkin, and we both pointed out that essentially governments and business have succeeded in letting themselves off the hook by personalising the issue (i.e. what do I have to do ?), rather than focusing on what needs to be done at a national and international level to make businesses (by far the biggest polluters) change their ways and clean up their acts. As this is the Year of Green Action (I am proud to be an Ambassador) and we have a Climate Emergency, we should be concentrating on keeping up the pressure to see the bigger picture.

In a few weeks we will hold our annual conference. Our line-up is great and wide-ranging, focusing on the thorny topic of economic growth. It’s not just about social enterprise, it’s about the fundaments of what we need to see in changing society and business for the better. We are constantly fed a diet of messages about business being the answer to all problems… If this is the case, why do the world’s richest 1% now own more than the rest of us combined?

An Oxfam report published earlier this year shows that our economy is broken, with hundreds of millions of people living in extreme poverty while huge rewards go to those at the very top. With the rich getting richer while the poor get poorer, it is clear we have failed to create a more socially just society. I’m really looking forward to having Alex Maitland from Oxfam’s Future of Business Initiative delivering the opening keynote at our conference on 20th June to set the scene.

Our friend Heidi Fisher has just written a great article, which questions how we can change from an intervention-based approach to a prevention-based approach, i.e. a world where social enterprises exist to prevent a problem rather than treat it. Many successful social enterprises, such as the Big Issue with their ‘hand up’ rather than ‘hand out’ ethos, help people get back on their feet, and are also taking steps to try to address the root of the problem, but homelessness is still on the increase. To achieve a solution requires a more fundamental change in thinking by government and society as a whole about the social impact of all our activities and policies.

The recent Social Mobility Commission’s annual state of the nation report reinforces what we have known for some time: many people left behind on low wages (which have not kept up with living costs), which holds them back from building a better life for themselves and their families. We know that higher levels of inequality lead to political instability, shorter lives for both rich and poor, as well as more corruption and crime. At a global level, extreme inequality is undermining the fight against poverty and widening other inequalities (e.g. gender and race inequality).

Urgent action needs to be taken to close the gap between rich and poor and to address climate change, so join us at our conference and help us to change the world!

Buy conference ticketsFor more information about our conference, and to book your tickets, follow the below link:

https://www.eventbrite.co.uk/e/growth-a-force-for-good-social-enterprise-mark-cic-conference-2019-tickets-54593630017

I hope to see you there!

Lucy Findlay with Irina Makeeva and young social entrepreneur Anna in Novosibirsk

From Russia (Siberia) with love

What an amazing experience. My recent trip to Siberia, for the second leg of the Euclid Network PeerEx exchange, far surpassed expectations and well and truly dispelled the myths – there were no gulags and it wasn’t -40 degrees! In fact it was spring so only just below freezing most of the time.

I arrived in trepidation into Novosibirsk, Siberia, having briefly and bizarrely crossed paths with my husband for an hour at Moscow Airport (I was flying out, whilst he was flying home from a trip to Kazan). What are the chances of that?!

My exchange partner Irina Makeeva made me feel so welcome.  Both she and her ten year old son Kuzma (who was keen to chat in English) gave me huge hugs when I arrived. I think our chatting in the taxi to the hotel was a bit fast for him as he apparently only understood the word ‘recipe’ on the whole journey – so started the food focus of my trip! Novosibirsk is 4 hours ahead of Moscow (which is 3 hours ahead of UK) so the added jet lag was probably going to be an issue too.

They have mitigated their risks through trying to diversify and build income generation models. They have bought their own premises (building ownership seems to be an important part of NGO business practice in Russia), but they are also more reliant on Government funding as a result of the situation.

My first day was spent initially having a look at the sights of the city. It is actually the third largest city in Russia (after Moscow and St Petersburg). It grew due initially to being on the Tran-Siberian railway line, and its distance from Moscow attracted a national relocation of people and services in the 1950s due to the threat of Nuclear War. The city has a lovely centre with an opera house and old giant statues of Lenin, some revolutionary soldiers and workers in the central Red Square. Myth has it that it is also the centre of Russia – but many places claim this.

We then went on to spend the day with Irina’s colleagues at the Siberian Resource Centre, to hear about the work that they are doing to support NGOs across the region. It was set up just after the fall of Communism in 1994/5 by three visionary women who identified the need to work with government to coordinate support and training for fellow NGOs (as well as an element of quality standards). Funding comes from a variety of sources, but they have challenges, especially more recently when they fell foul of government suspicion about the activities of foreign funded NGOs, and were declared ‘foreign agents’. The label was only removed once all foreign funding was sent back.  This also led to a suspicion of me, from the authorities, I later learned….

They have however mitigated their risks through trying to diversify and build income generation models. They have bought their own premises (building ownership seems to be an important part of NGO business practice in Russia), but they are also more reliant on Government funding as a result of the situation.

In the evening we went out for a lovely dinner with the whole Resource Centre team. The Siberians make fine salads and I was amazed at the diversity of what was on offer. I was told that due to the food embargos there is now a good market in ‘Polish’ cheese (French repackaged in Poland) and Belarussian Prawns (no coastline!).

Interestingly, charity shops in Russia are completely different to the UK, as there is no heritage of them. So having seen what other countries have done, they have reinvented the concept – a much more modern, young and fashionable feel (again, primarily run by young people).

The following day was an early start, with a business breakfast and filmed interview with the Siberian social entrepreneur network Smart Concept, which is shown below.  It turned out that they were due to hold a Festival of Social Entrepreneurship in Novosibirsk that weekend. I was asked lots of questions, but the one that surprised me most was ‘What do you think of Jamie Oliver?’ Obviously celebrity chefs get coverage the world over.

We then did a filmed tour of featured social enterprises.  All were run by hugely enthusiastic young people and included both a Dog and a Cat Café (not together!) as well as charity shop. Interestingly, charity shops in Russia are completely different to the UK, as there is no heritage of them. So having seen what other countries have done, they have reinvented the concept – a much more modern, young and fashionable feel (again, primarily run by young people).Cat and dog cafes in Siberia

After a very late lunch, we got a taxi to the district outside Novosibirsk to a place called Akademgorodok. It is a purpose-built science university, built in the woods in the 1950s, designed to attract young scientists, enticed by the relative academic and lifestyle freedoms being so far from Moscow.

Museum apartment at Akademgorodok in SiberiaOver a ‘soft vodka’ and herbal tea, we discussed how people lived in this community in the time of the USSR in the ‘living museum’ of a local academic’s house. She has set the apartment up with typical Soviet 1950 furnishings as a replica of the early days of the institute as well as collecting a huge level of knowledge and artefacts from the 50s and beforehand (even dating back to the last Tsar). It appeared that collecting these items and indeed finding them is relatively rare in Russia.  She was very impressed with my vintage 1920s brooch.

Impressively, more than 50% of the income is earned – the closest I’d seen to a sustainable social enterprise model

Lucy Findlay and Irina Makeeva with Margarita at Constellation of Heart FoundationOn my final Siberian day I visited Margarita Semikova, who runs the Constellation of Heart Foundation. Margarita is a driven, enthusiastic woman with a strong business sense and set up the NGO that links companies to volunteering opportunities and training opportunities as part of their CSR. As with many NGOs it seems that there are rich benefactors on the Board. In this case the Board member had bought and paid for the renovation of a property in a shopping centre the middle of a very trendy student area in Novosibirsk. The property had originally contained many spaces for NGOs, including a training suite, café and shop.

However, the local authorities decided to raise the ground rental overnight, so much of it had to be reconverted to commercial space to bring in the income to cover costs. It’s Margarita’s desire that this will all be reconverted once business is better. Impressively, more than 50% of the income is earned – the closest I’d seen to a sustainable social enterprise model – but it just goes to show how fleet of foot you need to be in Russia to address the next challenge.  But Margarita is a determined woman!

Euclid Network PeerEx group in Moscow_March 2019Following my trip to Siberia, Irina and I travelled back to Moscow to meet our fellow PeerEx colleagues, who had mainly been in Moscow and St Petersburg (except Kate Welch, our eminent Social Enterprise Mark Ambassador, who had been in Nizhny Novgord!) We were greeted as the survivors – because we had been in Siberia. Irina gave me a t-shirt which I wore saying ‘I’ve been to Siberia and survived’!

The exchange trip finished with a trip to the British Ambassador’s House for the grand finale – a slice of Britain in Moscow… it was all I would have expected, complete with cucumber sandwiches and British portraits in a suitably grand building overlooking the River Moskva. I was also asked to speak about my impressions, which were as follows:

  • Social enterprise seems to be a growing but unknown sector (outside Russia)
  • There is some great practice that we can learn from (especially around refreshing charity shops and using them as community hubs)
  • There are challenges to sustainability including government bureaucracy and taxes, cultural suspicion of foreigners especially classifications of ‘foreign agent’
  • We could do more together including linking to the university communities better and helping Russian NGOs have a greater online presence (there is an issue though with different alphabet and social media)
  • The world is people and we all experience the same things and whatever the barriers we need to work more closely to help address them
  • I feel privileged to have met so many lovely people and will never forget my trip to Russia and Siberia (which is in Russia whatever people tell you!)
Lucy Findlay speaking at International Social Enterprise Conference in Sri Lanka

Looking outwards – Sri Lanka and beyond…

International Conference on Social Enterprise and Social FinanceIn January I was lucky to be invited to Sri Lanka by Lanka Social Ventures, to address the 2nd International Conference on Social Enterprise and Social Finance. It was an amazing and unforgettable experience in so many unexpected ways.

The conference itself attracted very high profile speakers, such as the Governor of the Bank of Sri Lanka, but as is often the case with conferences, it was the discussions that happened on the side lines that fascinated me. We learnt a lot, even from my whistlestop three day trip!

The need for sustainable business models that will keep addressing the social and environmental challenges faced once the aid agencies inevitably pull out is becoming more pressing.

Firstly, the vibes that I picked up are that the social enterprise movement in Sri Lanka is such an obvious fit for the sustainable development of their economy. The country has gone through so much recent turmoil, with the combination of the civil wars and the devastating Tsunami in 2004. This has made the country relatively aid and donor focused, which brings its own set of challenges. The need for sustainable business models that will keep addressing the social and environmental challenges faced once the aid agencies inevitably pull out is becoming more pressing.

This is where the women-led social enterprises combined with the Fair Trade model come in! I was amazed at the level of co-operation and synergy between these entrepreneurs and business owners. The social enterprise business model fits in so many ways, for instance in addressing the extreme social challenges faced by women trying to earn a living, many of which have to travel to the Middle East to access work.

Having been so well embedded in the Fair Trade world, the Sri Lankan’s completely ‘get’ that there is a need for meaningful external certification/accreditation/ verification.

Selyn handloom weavingThose that stay experience huge challenges finding work that can be combined with the challenges of child rearing, as well as older women, who also find it hard due to cultural constraints. Examples of local social enterprises include Selyn, which is 99% women led and empowers women by giving them flexible working arrangements to make beautiful handloomed products to fit around their family commitments.

I was also very impressed with the way in which all these businesses have come together to develop the Good Market. Led by another impressive female social entrepreneur, Amanda Kiessel, this directory has over 825 ethical businesses, which are mainly social enterprises, based in Sri Lanka and now further afield. It has been very much community-led and is clear about the importance of certifications for all the producers and suppliers, to provide reassurance to buyers.

I encourage you to join it (although most suppliers are currently in Sri Lanka, it is expanding), it uses the Social Enterprise Mark to verify social/environmental impact and is free to apply!

This brings me onto the issue of certification and accreditation. Having been so well embedded in the Fair Trade world, the Sri Lankan’s completely ‘get’ that there is a need for meaningful external certification/accreditation/ verification. Following the conference, I was working with a number of stakeholders to develop ideas for an accreditation for social enterprises. One of the main challenges and issues discussed was ‘How do we ensure that this is robust and that the assessors have credibility too?’

We are the business models of the future and we can prove our credentials by being social impact led, commercially viable and focused on our stakeholders rather than profiteering for shareholders.

Erinch Sahan speaking at International Social Enterprise Conference in Sri Lanka

Erinch Sahan of WFTO

My final point is about alliances with the wider new economy movement – i.e. those that want to see genuine changes to the prevailing business models and the importance of credible certification in this mix. Brexit has made us look inwards, which is not healthy. The conference gave me a chance to catch up yet again with the pioneering David Brookes of Social Traders in Australia and the inspiring Erinch Sahan from the World Fair Trade Organisation (he was keynote speaker at our 2018 conference).

In Victoria (Australia), the government has its own social procurement policy, which requires that goods and services are bought from social enterprises. This seems much more robust than our Social Value Act and requires robust certification, which is provided through the Social Traders Mark. It is also clear that the World Fair Trade Organisation is the social enterprise wing of Fair Trade, with its own robust certification of social enterprises in its network.

We must work with these key allies to stand up to the challenges. We are the business models of the future and we can prove our credentials by being social impact led, commercially viable and focused on our stakeholders rather than profiteering for shareholders. As comments at the recent World Economic Forum prove, global corporate behaviour has caused a lot of the trouble we find ourselves in – we therefore need a radical change, not anti- business, but business that shares its wealth much more fairly with all people, not just those select few at the top. This is something we will be addressing at our 2019 conference, which will examine whether growth is always a good thing.

To hear more about social enterprises and Fair Trade in Sri Lanka I would recommend listening to the below WFTO podcast with Erinch Sahan, Amanda from Good Market and Selyna from Selyn.

Rising to the challenge with social enterprise

As we begin a new year, I am sure I am not alone in reflecting on 2018 and looking ahead to what 2019 may bring.

With continued political, economic and social turbulence, there is surely much uncertainty ahead for the social enterprise sector (as well as the wider world), what with the international rise of populism and the implications of the impending Brexit still not certain. One thing that will remain constant is the need to evolve and adapt, and the need for social enterprise to take advantage of the opportunity to do things a little differently.

Undoubtedly there will be numerous challenges for us all to face in the year ahead. I want to continue to work together to address these challenges whilst promoting social enterprise as a sustainable and credible business model (for now and the future).

On a personal note, my 2019 got off to an exciting start… I am delighted to be appointed an MBE for services to social enterprise in the Queen’s New Year Honours list. This accolade is testament to the growing strength of the social enterprise sector, and a recognition of the work that Social Enterprise Mark has done in raising the profile of both social enterprise and accreditation.

As we look ahead to the new year (our tenth year of providing credible standards for the social enterprise sector!), we have a number of priorities, the core of which remains providing robust and credible standards for the social enterprise sector and demonstrating its added social value. I have outlined our key plans for 2019 below:

Opening up the Social Enterprise Gold Mark to smaller social enterprises

Social Enterprise Gold Mark

Through consultation with our Mark holders, we have become aware that the fees for the Social Enterprise Gold Mark can present an obstacle to some smaller organisations.

We want to open up this valuable Mark of social enterprise excellence to as many as possible, and therefore have decided to reduce the annual licence fee for the lower fee tiers (up to £15m turnover), in order to enable some of our smaller customers to benefit from the higher level of accreditation and the support that the Gold Mark process offers.

Continued growth in new markets

In 2018, we continued to push the boundaries of the traditional social enterprise world, and we plan to do more of the same in 2019:

  • International:
    • The Social Enterprise Mark now has a presence in 11 different countries. We hope to continue our international expansion in 2019.
    • I am delighted to have been invited to the International Conference on Social Enterprises and Social Finance in Sri Lanka later this month to speak about the importance of assessment and accreditation for social enterprises.
    • I am attending the Euclid PeerEx exchange visit to Siberia and Moscow in March, to share good practice and catch up with our Russian friends
    • After attending the 2018 event in Edinburgh, we plan to attend the 2019 Social Enterprise World Forum in Ethiopia in October.
  • New quality mark for Supported Businesses:
    • Over the last year, we have been working with the Department for Work and Pensions (DWP) and the Supported Business Steering Group to develop a new quality mark/framework for businesses that provide extra employment support for disabled people with the greatest barriers to work.
    • Social Enterprise Disability Employment MarkThe Social Enterprise Disability Employment Mark (SEDEM) will provide assurance to DWP on the quality of employment outcomes for disabled people, which will hopefully help to ensure a long-term future for these businesses, which provide vital employment opportunities for people who have a disability.

Raising standards in social enterprise

We will continue to develop the Social Enterprise Mark and Gold Mark, based on the feedback received in the consultation we conducted in 2018. This may include the introduction of new tiers/levels of accreditation to provide a more comprehensive journey to social enterprise excellence.

Responding to feedback

In the next month, we will be sharing a stakeholder survey, which will provide an opportunity for Mark holders, partners and other stakeholders to give feedback on their experience of the service we provide, and to have their say on the future direction of Social Enterprise Mark CIC and our accreditation services. This feedback is invaluable as it will enable us to develop robust and credible standards that meet the evolving needs of the expanding social enterprise sector.

We would love to hear your plans for the year ahead. Here’s to a successful 2019 and may the social enterprise sector continue to diversify and expand to create positive social change.

Growth

Delivering regional growth through social enterprise

I was recently asked to be part of a panel session at the GuildHE conference, which looked at how universities (and other institutions) can deliver regional social and economic growth.

Oxfam report: An Economy for the 99%For me, behind the fundamental issue of delivering social and economic growth, is the question ‘for whom and why’? Given that the world’s richest 1% now own 82% of the world’s wealth – we have patently been failing to create a more equal society, with many people left behind on low wages that have not kept up with increasing living costs. We know that more inequal societies lead to political instability, shorter lives for both rich and poor, as well as more corruption and crime.

So how can we change tack and look at alternatives to create a more equal society that has a stake in economic growth and addresses the needs of the locality? Social enterprises are part of the answer – these are businesses that focus primarily on the needs of their stakeholders rather than profits for shareholders.

“So what about the future? How do we move to a more sustainable society and economy? The strait-jacket view of how businesses operate must change.”

However, businesses such as the Big Issue, with their ‘hand up’ rather than ‘hand out’ approach, although helping people get back on their feet, do not tackle the root cause of homelessness. There are social enterprises that aim to do this, but I would argue that it requires a more fundamental change in thinking by society and government as a whole about the social impact of all our activities and policies. The recent UN report on poverty in the UK illustrates this, showing the shocking results of policies and actions where this doesn’t happen; effects that impact the most vulnerable – the poor, women, ethnic minorities, children, asylum seekers, single parents and those with disabilities.

I am often asked how can we measure ‘social impact’ and ‘value’? Is there a magic formula that has eluded us all this time? After many years of trying and failing to find academic answers and time consuming and expensive methodologies, there has been an admission that statistics only show us a narrow interpretation and the human stories that back up the statistics are often more important. I will never forget Nigel Kershaw, Chair of The Big Issue saying “If we’d had to evidence our social impact the Big Issue would never have got off the ground.”

All the social enterprises that apply for our accreditation are required to state how they create social value alongside showing their essential business credentials. This sometimes involves statistics but often it’s simply describing and proving how they have made a difference to and with their stakeholders.

“This is a challenge facing the wider social enterprise sector. Should we let the government off the hook by trying to fill in the gaps and delivering public sector resources, or should we find the niches where we can add value by nature of our strengths and focus?”

A number of universities are now actively demonstrating their social value through accreditation with the Social Enterprise Mark/Gold Mark.  We believe that enabling social, economic and cultural prosperity lies at the heart of what makes a university good at what it does, and through our HEI network we are interrogating various aspects of this conundrum. Universities, of course, are themselves wealth creators and important employers, investing money in the local and regional economy and with their capacity, skills and resources, they can reach parts that others can’t.

There is a huge range of good practice – for example York St John’s work in mental health and business development, Solent’s work with the Maritime sector, Plymouth College of Art’s placed based industrial strategy including the creative arts school in the most deprived area of Plymouth, and Winchester’s work with supporting regional suppliers and local community asset development.  I could go on!

This positioning does present some challenges though, especially in the light of austerity, declining resources at the national and regional level, as well as current uncertainties around the effects of the impending Brexit.

Professor Nick PetfordIn Northampton for example, the VC of the University recently contributed to a Guardian article about the role that the university could play, in acting as the glue in the absence of the bankrupt County Council. The university is dedicated to creating social impact, and supports all their students to understand the merits of social innovation and working with the local community to not only to provide direct employment, but also co-founding social enterprises. For example, Goodwill Solutions helps ex-offenders, addicts and former service personnel into employment. The university also works to support local community placements and supports the development of new social enterprises.

We need to be careful though, about displacement- it cannot completely take over the role of the Local Authority. As the state shrinks we could see universities’ resources being used to fill the gaps left by the withdrawal of the public sector. Where do responsibilities start and finish given the more challenging funding environment that some universities themselves are experiencing?

“It is not just about ‘a bit of CSR around the edges’ but about a more fundamental change where the stakeholders are given the same attention as the shareholders, and where the government considers ‘social value for money’ a crucial part of delivery of services.”

This is a challenge facing not only universities but also the wider social enterprise sector. Should we let the government off the hook by trying to fill in the gaps and delivering public sector resources or should we find the niches where we can add value by nature of our strengths and focus? The balance between economic and social issues always requires interpretation of where we can work best and how we can work with others most effectively to leverage scarce resources and bring in other partners, such as local social enterprises, businesses and the public sector.

So what about the future?  How do we move to a more sustainable society and economy? The strait-jacket view of how businesses operate must change. We need to look back at history to a time where businesses had a key role in their local and regional economy as part of their mission. It is not just about ‘a bit of CSR around the edges’ but about a more fundamental change where the stakeholders are given the same attention as the shareholders, and where the government considers ‘social value for money’ a crucial part of delivery of services with an equal weight and understanding to interpreting pure outputs and crude number crunching.

I believe we have a long way to go with this. In many ways we have taken steps backwards over the last few decades. I’m ever the optimist though and speaking to students and young people at recent events there has never been a clearer message that they don’t just want to make money – they want to make a difference. So perhaps there is hope for the future…

Lucy Findlay

Thinking bigger… ten years on (part 2)

This is a follow-up to my previous blog from September 2018

Last month I shared my reflections from the Social Enterprise World Forum, which I had recently attended, ten years after attending the inaugural event.

This prompted me to think about how much has changed in the social enterprise sector since then, which led me to reflect on our own development in that time. Ten years ago, we had just developed the Social Enterprise Mark and were piloting it with organisations in the South West. From what was a small regional project, we are now widely recognised as the authority and standard bearer of accredited social enterprise, both in the UK and overseas. All our income is self-generated through the direct delivery of the accreditation, or associated services.

I am a believer in practicing what you preach… last month I said the sector needs to be more ambitious and think bigger. This of course also applies to our own organisation; we can’t stand still… we continually adapt our services to changing market needs, which has included developing an international assessment process that can now be applied anywhere in the world.

International Social Enterprise Mark holdersThe Social Enterprise Mark now has a presence in 11 different countries. But we don’t want to stop there – we are thinking bigger and want to be internationally recognised as the global champion of social enterprise standards, alongside others who share our principles and values.

To this end, we are excited to have been invited to speak at a large social innovation summit in Sweden later this month, and I have also been approached to speak at an international social enterprise conference in Sri Lanka in early 2019. I am also participating in a Russian peer exchange, where I hope to build valuable partnerships with international counterparts.

As I said last month, we all need to acknowledge that collectively we are part of the bigger answer and be pro-active in finding ways to achieve this. We would love to hear your ideas about how we go about this!

Rachel Fell and Lucy Findlay at the Social Enterprise World Forum

Thinking bigger… reflections on the Social Enterprise World Forum

This year was the 10th anniversary of the Social Enterprise World Forum (SEWF) in Edinburgh. I attended the first in 2008 (also in Edinburgh). So much has changed since that year, when the world economy had taken a tumble. We now have a new world order; all the old certainties have disappeared. The world seems a much more unpredictable, prickly and divided place.

Has the social enterprise world changed too? There are certainly far fewer big annual gatherings of social enterprises and far fewer familiar faces in the audience. Our stand attracted a whole host of businesses from a truly international audience (something that cannot be said about the first one), all buzzing with ideas and enthusiasm, who genuinely ‘got’ the social enterprise message and were doing their utmost to effect change, often in challenging circumstances. But in many ways, some of the debates on the platforms have not changed and are out of touch with the international paradigm shifts.

Rachel Fell and Lucy Findlay with Hong Kong General Chamber of Social Enterprise

Rachel and Lucy with delegates from the Hong Kong General Chamber of Social Enterprise

I can’t help thinking that as a diverse and growing sector, we need to be thinking bigger as well. Although the gathering attracted 1,400 delegates, a lot of these appeared to be sponsors and government delegations. I managed to get to speak to our equivalent in Hong Kong, who felt (even more keenly than us and perhaps unsurprisingly) that we should not just be looking to government for answers. Nor should we be looking to the corporate sector for the answers. We as a sector need to be taking control of our destiny. As Indy Johar mentioned in his session, we need to be more ambitious as a sector to create real system change.

Sometimes it feels like we are just dancing to someone else’s tune – e.g. how can we get the government or corporates to buy from us and support us? Yes financial sustainability is important but it is a means to an end – to change the world!

Given the theme of our own conference this year, ‘Spreading the Wealth’, we need to think big… we need to be linking to our true allies and partnering more effectively, not just sitting in our bunker and endlessly talking amongst ourselves and preaching to the converted. We need to acknowledge that we are part of the bigger answer and find allies and partners who also believe and want to achieve this. Collectively, we should be a powerful force for change – let’s reach out and grab it!

Lucy Findlay

Blurring the lines? Responding to the Civil Society Strategy

Civil Society Strategy 2018The new Civil Society Strategy explicitly sets the direction of government, by widening the strategy of the traditional third sector to include the private sector agenda.

It has been going in this direction for years of course – the advent of Big Society Capital, Social Investment, Social Impact Bonds have often been more concerned with social value creation than legal form. Is there anything wrong with this? It seems on the face of it, a ‘no brainer’. Why would you bother about the type of organisation when it’s creating loads of social value?

At Social Enterprise Mark CIC, we are often accused of being obsessed with form over function and of being pedantic about definitions. Interestingly, the definition of Civil Society within the strategy document – “we define civil society not by organisational form, but in terms of activity, defined by purpose (what it is for) and control (who is in charge)” – is in perfect alignment with our own criteria. In a nutshell, we look at the social mission, value and objectives of an organisation. We also look at the power relationship; through requiring an asset lock and independence, and by assessing the way that shareholders (if there are any) behave in distributing profits and controlling the company.

The strategy then goes on to say:

“Businesses are changing, to pursue social as well as economic purpose. The state is helping public service employees take control of their service through creating mutuals, reforming commissioning to support local and non-profit providers, and localising power.

All of this is ‘civil society’ – not a sector, but a range of independent activity aimed at achieving social value… we use the term ‘civil society’ in this hybrid sense, and ‘civil society organisations’ may be charities, public service mutuals, or businesses with a primary social purpose. To describe the ‘core’ of civil society we refer to ‘voluntary, community, and social enterprise organisations’, or simply ‘the social sector.”

Crucially here they talk about businesses with a ‘primary social purpose’. This does not address the issue of where power sits/who is in charge. For us this is a core principle and must not be undermined, as the balance of power is crucial in the way that a company is run and who it’s really for – i.e. whose social purpose and what is happening to the profits. For example, the much-criticised Virgin Care has a social mission to provide health and social care, and I’m sure that they can prove that they are creating social value in many ways. However, the ultimate control of this company is in the hands of the shareholders who want a return for their investment, which means that ultimately it is not the patient at the centre of the company, it is the shareholder. Even if a social enterprise is created that is majority owned by Virgin Care, it is still ultimately owned and controlled by a parent company that puts profit before social value. This is why we test independence as part of our assessment.

Later on in the document, under the Business Chapter, the strategy states:

“Our leading businesses increasingly put social and environmental responsibility at the heart of what they do. It is key to their strategies for long-term, sustainable value, including how they manage risk, and how they sustain public and investor trust in their brands and business models. Alongside this, a new generation of businesses now go further and commit themselves explicitly to social and environmental purposes or missions, alongside profit, in their goods, services and how they operate.”

Oxfam report: An Economy for the 99%If this is the case, why do we have increasing social marginalisation and wealth disparity, as shown in a 2017 Oxfam report, which showed that just 8 wealthy individuals owned the same wealth as the world’s poorest 3.6 billion people. Just recently, we have also seen new evidence that the average pay of a FTSE 100 CEO is a 151:1 ratio to employees, which further demonstrates the wealth gap.

I do not mean to be dismissive about the motivations of all business, but at the same time we must not be naïve. Much of this stuff is tick in the box CSR and is not addressing the root of the problem; i.e. that there is a clear conflict of interest between being a shareholder owned and controlled business dedicated to maximising wealth, and the conditions that the business is creating for its workers and the communities that it interacts with. Can the government prove their statement above or do they take it at face value from the businesses telling them this is the case?

To be fair to the strategy, it does acknowledge that we are different as the ‘social sector’, but it is confusing that a lot of the document is not actually about the social sector at all and does not really analyse the challenges put forward in this case. I dare say, it’s far more palatable to say that social impact investment is being used to create social value, without questioning whether the social value being created is getting to the heart of the issue. Plus, who is actually in control? Is it at the expense of the marginalised?

We need a root and branch analysis of why we are creating a more unequal society and how current business practice is contributing to this. Are CEOs themselves dedicated to the creation of social value or is it a side-line in the CSR department?  I was interested to read recently that a Democratic Senator (potential Presidential candidate) Elizabeth Warren in the US is proposing an Accountable Capitalism Act, which would lead to more wealth redistribution and power to workers by giving more power to stakeholders. This is the sort of fundamental change we need.

There are lots of business people out there with great social motivations (such as those mentioned in the strategy), but until we challenge the current business model we will not get to the root of the issue, inequality will continue increasing.

Runners at start line

Standing still? It’s not an option

Lucy FindlayFor businesses to grow, there is not an option to stand still. Of course, this is also true in the Social Enterprise world. The social mission may remain the same, but the strategy and tactics to reach the goal must change and evolve over time to reflect the customer’s needs, changing markets and the dynamism of the communities that they serve.

One of the big challenges for the social enterprise sector, has been the huge changes in the political, social and economic environment over the last 10 years. The tides have turned and we can no longer be reliant on the old established sources of support and revenue.

We set up the Social Enterprise Mark as a project at the end of 2007, little realising what huge global changes there would be (never mind the wisdom of launching a business at the beginning of a recession!) We have changed markedly over that time.

We started out as an ‘identifier’ for those businesses that saw themselves as social enterprises. It was relatively straightforward – our assessment looked at the legal and financial details of whether you met the legal definition of social enterprise. A yes or no answer.

Interestingly, the European Parliament is now looking to set up a ‘label’ for social enterprises, 10 years after we originally launched ours! It might be pertinent for them to find out what we have learned before embarking on such a project as we have firmly moved away from being just a ‘label’ and definitional identifier.

Following the Social Value Act, social value and impact demonstration became a focus for us all – how are social enterprises really making a difference? The Social Enterprise Mark therefore changed its approach to assessment to bring in a more demanding process, which helps social enterprises to articulate this more effectively.

Social Enterprise Gold Mark consultation 2018 summaryThe launch of our Social Enterprise Gold Mark (the Mark of social enterprise excellence), has been very successful with a number of markets, in particular the university sector. However, our latest stakeholder consultation has shown that there is much more of an appetite for new accreditation options that sit between the Social Enterprise Mark and the Social Enterprise Gold Mark, i.e. higher levels of scrutiny of what it means to be a ‘good’ social enterprise. We will therefore be moving in this direction, as well as making a few minor tweaks to the Social Enterprise Gold Mark criteria and assessment process.

We are also currently working on a bespoke product for Supported Businesses, in partnership with the Supported Business sector and DWP, which we hope to launch later in the year.

We have come a long way over the 10 years, and I put a lot of this down to the need to respond to customer need and to adjust the business to become more financially sustainable.  We cannot stand still and try to be all things to all people – focus is key.

Lucy Findlay

An inequality crisis – how do we spread the wealth?

The audience at our recent annual conference were universally shocked to hear from our keynote speaker Erinch Sahan (of the World Fair Trade Organization), that just 8 wealthy individuals now own the same wealth as the world’s poorest 3.6 billion people. In 2010, 388 billionaires owned as much as the poorest half of the world’s population, in 2012 this had gone down to 159, and by 2015 just 62 billionaires! He also highlighted that extreme inequality leads to political and economic instability, shortened lives (for rich and poor) and a rise in crime and corruption. 8 wealthy individuals now own the same wealth as the world’s poorest 3.6 billion people

In the face of all this evidence of the effects of the increasing intensity of inequality, why are we not doing more? There doesn’t appear to be any great sense of urgency from the powers that be and yet this is a fundamental world changer. Put this alongside the urgent issue of climate change (which exacerbates these figures) and we have a recipe for disaster for world peace and prosperity.

Whose job is it to take action on this? With current world-wide alliances being undermined on a daily basis it is hard to see who has the power or will to lead. Political parties are also often too short-term in their outlook. I would also be naive not to recognise powerful vested interests too.

There does at least seem to be wide scale awareness of the problem (with ¾ of people thinking that the gap between rich and poor is too great), if not the full extent of it, and this prompted us to question how we can all up our game to take action as part of our conference discussion.

Everyone seems to know there is a problem, but how do we go about tackling it? Especially when we are fighting against very powerful corporate forces who want to maintain the ‘shareholder wealth’ model of business…

A potential solution that emerged from the conference was the idea of true partnership and collaboration between big business and public/third sector to bring about positive social change.

Louise van Rhyn speaking at Spreading the Wealth conference 2018Louise van Rhyn from Partners for Possibility in South Africa spoke about their innovative programme, which demonstrates how reciprocal learning partnerships between business and community can be a powerful force for change. The key for me in this example, however, was the recognition was that it was a two-way process – i.e. that the leaders were actually learning too and didn’t have all the answers. The personal development journey stories were truly inspirational.

This got me thinking about how we can engage with more businesses to promote alternative business models, and encourage them to adopt these models to create significant social value. We seem to have forgotten the lessons of the past.

I was recently listening to a critique of the way that business schools ‘teach’ business. It is very one dimensional and tends to focus on wealth creation for shareholders, which is self-perpetuating. The World Inequality Report 2018 stated that ‘economic inequality is largely driven by the unequal ownership of capital’. In this model, the wages are driven down as a means to create greater wealth further up the ladder with fewer and fewer companies in control as efficiency becomes the main driver. In my view, we need to go back to the models of business ownership that value the wealth creators (i.e. the workers), including social enterprise, community businesses, co-operatives etc.

I am encouraged and proud of the work of our university Mark holders in this area.  They are firmly of the belief that the education they provide is about creating social added value, and in many ways challenging the status quo of typical business school approaches, by highlighting different ways of doing business, as well as trying to tackle some of the challenges that inequality presents in their local communities.

I was very pleased to see a recent report published by the University of Winchester (which holds the Social Enterprise Gold Mark), showing that the university contributes over £266 million a year to the regional business community. Our network of social enterprise universities also want to do more work in framing what a ‘good’ university looks like.

Our friend Phil Hope (who facilitated several sessions at the conference) also raised a few interesting questions following the event, one of which was how can we help more organisations convert to a model of business that is not all about maximising shareholder profit and power, in a stock market that will punish them if they do? This is where I think the BCorp model has most value. Erinch also highlighted examples of producers being represented at Board level, as well as the El Puente model in Germany, which gives equal stake to founders, customers, producers and employees.

Impact of the PfP programme on business leadersPerhaps the true partnership/co-learning approach taken by Partners for Possibility could be a way forward in engaging with more big businesses? Louise explained how it was the impact that the programme has on business leaders that was most exciting, as they become actively engaged in addressing pressing social challenges to build their nation.

There are no easy solutions to the problems caused by growing levels of inequality, but I am buoyed by the fact that the graduates that I talk to certainly seem to be engaged with the social change agenda and how business can be a force for good. Much research enforces this view, e.g. a recent HBSC global survey found that one in four young entrepreneurs (aged under 35) said they were more motivated by social impact than by moneymaking (compared to just one in 10 of those aged over 55). The increasing interest that women are taking in business is also encouraging, as Heidi Fisher highlighted in her session at the conference, referring to the fact that women tend to be motivated by more than just the financial bottom line.

Although I have highlighted some potential solutions and some positives, we really do need to think about how we can make our message clearer and more attractive. Too few people know about the fact that business can be about more than what’s shown on Dragon’s Den or The Apprentice. In the short to medium term we need better alliances rather than fighting with each other over nuance. You may think that is a weird thing for the leader of an accreditation body to come out with (?!), but we need to recognise our differences and work together for the common good.


If you are interested in finding out more about our accreditation services, please contact Rachel Fell or call 0345 504 6536.

Robot

How can we make our social enterprises fit for the future?

Blogging, Vlogging and Flogging

A couple of talks on change have recently got me thinking.  We live in such uncertain times at the moment, and it often feels like the rule book has been thrown out of the window. As Bill Gates said, “There will be more change in the next 15 years than there has been in the last 50 years.”

This rate of change can make life seem chaotic, hard to focus and sometimes downright scary (especially for oldies like me!)

One thing we do know is that, as businesses, we need to evolve to respond to these changes, to anticipate what the changes might be (as far as we can) and to be flexible in order to compete.

These are some of the thoughts that have struck me (in no particular order):

    • People have a lower attention span. There is so much information to take in that ‘out of the ordinary’ novelties catch the eye.  We are in the Instagram Generation.  People don’t want to read things, they want to scan and wait for things to catch their eye.  What makes your business different and eye catching?  Can you make marketing collateral more visual?  Can you film something rather than writing it? For example, I have recently published my first Vlog:

  • Technological change is taking us into the realms of science fiction. Artificial intelligence, blockchain, Virtual Reality are all with us and will increasingly change the way that we work; robots will do the more menial tasks and even some of the skilled tasks (where for instance, value judgements and human biases are a disadvantage).  We need to think about what skills will be needed for the future and equip ourselves to become Digital Leaders and support others to change and adapt their roles.  However, the flip side of this is that we still need to focus on the customer’s experience and not get carried away with huge digital solutions (witness the chaos that TSB has experienced this week as customers are locked out of their accounts).  The answer to this is to change incrementally and test as you go.
  • Social media appsBusiness models have also changed – we have seen the rise of platforms such as Uber, Air B&B, Google, Facebook etc. Much has been made of their different style of business – e.g. being client driven, employee self-organisation, flexibility and innovation.  I have no doubt that the old order of hierarchy in business and life is breaking down to allow much more personal freedom.  But at what cost?  Is this window dressing?  It seems to me that, underneath it all, the financial bottom line still remains the key driver. Social enterprises are authentic though and we really need to shout about how we are making a true social difference, our ethics and values (for example, through accreditations such as the Social Enterprise Mark!)

Change is also invigorating as it encourages us to think differently. Prompted by attending a Cosmic Digital Leadership programme (see video below for more details), we are currently thinking through all of this at Social Enterprise Mark CIC and it’s certainly opened us up to a whole set of new ideas.  We don’t have all the answers just yet, but we do know that staying still isn’t an option.


Lucy Findlay

Vlog – Lucy comments on the gender pay gap

Lucy Findlay

Forget ‘value for money’; how about ‘social value for money’

Are we heading for ‘Hard Times’?

Today’s political and economic climate reminds me of an episode in Charles Dickens’ novel ‘Hard Times’.  At the beginning of the novel, Mr Gradgrind says ‘Now, what I want is facts’ in his school. He endorses an approach to education that prizes the logical, analytical, mathematical and statistical over common sense, creativity and emotion. Famously he asks a pupil who works in the circus to define a horse, an animal that she works with on a day to day basis. She can’t explain this factually and so invites his wrath. Another child gives a complete zoological explanation despite a much lower level of expertise in horses. This novel highlights the weakness of the utilitarian approach.

Higher education policy seems to be following this number crunching, pseudo analytical approach, which has been applied to schools over last few decades. Teresa May announced a review of post-18 education in February. The emphasis is now on value for money – but how can this be calculated?! There is some discussion that looks at which jobs students end up in, but how do you put a value on these – do we just revert to saying everyone should be aiming for the highest paid jobs? Do we want a nation of merchant bankers, city workers, accountants and lawyers? What happens to society, the creative industries and the public sector amongst others in this scenario?

Professor Nick PetfordGetting the right jobs is not only about a degree, it’s about lots of other contributory factors. This argument has been further elaborated on in the Guardian recently, in an article in which Professor Nick Petford, Vice Chancellor of the University of Northampton, argues that there will be a disincentive to train nurses, midwives and police officers if post-graduation earnings are used in such a crude statistical way.

I have also seen suggestions that value for money might be calculated by how many student facilities a university has, or academic services? Or maybe it should be the cheapest beer in the Union and the most nightclubs in the nearby town?? No doubt some arbitrary formula will end up being concocted so we can all see which university ranks top and then this will be trumpeted loud by those universities that achieve the top marks.

The main problem for the ‘Hard Times’ fact-based approach is that we are dealing with human beings who have emotions and experiences. People may say that they are using pure facts to make a decision, but this ignores all the outside factors that make an experience enjoyable and feel worthwhile. It also flies in the face of existing research which shows that the new generations of students and professionals measure success by more than just financial reward.

Using my own personal experience as a case study, I worked as a researcher in my university after my degree, because I was interested in the subject (certainly not the pay). It wasn’t until my next job as a policy officer that I found the niche of social enterprise and community based regeneration (several years later). There was not necessarily a neat trajectory between getting my degree and a well-paid job, but both my degrees led me to challenge my thinking and helped to develop my personal value set.

The utilitarian approach also forgets that being at university is not just about the individual.  There is the experience of being part of the university community, as well as the fact that universities sit within communities themselves, adding value and richness to many more lives than just those studying. This goes beyond the pure number crunching of Value for Money to create Social Value for Money. We, in partnership with others in the university and social enterprise sectors, are making this point to the new Office for Students – where we argue for a more embedded approach, which looks at the development of a Social Value for Money Framework that engages directly with students.

We have been working with HEFCE and our Social Enterprise Mark/Gold Mark universities to bring out some of the wider essence of what it means to be a good socially enterprising university, caring not only about its students and staff, but also playing a crucial role in developing the links with the local community. The University of Salford for instance has a great reputation for enabling access to students locally who have been brought up in Local Authority Care.

Social Enterprise Gold Mark

The Social Enterprise Gold Mark in particular helps to highlight and bring together social enterprise characteristics and Social Value for Money. There is also a new report that has just been launched by HEFCE and Flourish CIC, which highlights and evaluates the work that has already been done by universities to develop social entrepreneurs amongst students, staff and the local population.

So where does this leave us? Louisa Gradgrind ended up having a mental breakdown as a result of her schooling in ‘Hard Times’.  We must not forget that we are dealing with people at the end of the day. Statistics should be used with caution and we must not lose the nuances of what it means to go to university. It is not a simple equation of good degree + ‘good’ university = well paid career.

I hope we are not heading for a breakdown – I am naturally a positive person, so I don’t think so, but we need to be careful about what behaviours are engendered by crude targets and statistics and we have ideas about how this can be countered – watch this space!

Lucy Findlay

Leading the way or minding the gap?

Lucy Findlay shortlisted for Venus AwardsInternational Women’s Day was on 8th March.  Reading my social media feed that day, it seemed to have much more prominence than in previous years. I think it was probably a combination of factors, including the many shocking stories in the press such as the #metoo campaign, the gender pay gap figures that show there is still such a huge disparity between men and women, and 100 years of votes for (some) women.  Personally, and more positively, I have also recently been selected as a finalist in the Venus Women’s Business Awards.

I was also asked to carry out an interview for Ethical Hour as part of the IWD celebrations, followed by an interview live on camera about the pay gap. It certainly got me thinking about how women fare in social enterprise/ethical business in general. Are we leading the way or do we still have some gaps to fill?

Unlike the mainstream business world, statistics show that social enterprises are more likely to be run by women than SMEs (41% according to the 2017 State of Social Enterprise Report) and we know from previous research done in the early days of the Social Enterprise Mark that women are also more likely to be consciously ethical consumers.

Equal gender representation and seniority in social enterprise however, does still mirror the corporate world in sectors where traditionally women have been less prominent.  For instance, I notice events about IT, transport, housing/property and finance still tend to be male dominated (including the speakers, but with some notable exceptions). However, I have been encouraged to see more changes over my many years in the sector, with more women running very large social enterprises, such as universities and in healthcare delivery. Although we do not yet see mirrored equality in other sectors, I hope we are on an upward trajectory as more women develop the confidence to not only start social enterprises but to continue to run them as they get larger. This also requires recruitment processes to take women seriously.

The interviews made me reflect beyond pay and representation to my own experiences as the leader of a ‘politically charged’ social enterprise. As part of my job, I have been required to develop blogs and other social media presence. Like many women, I have often found this to be intimidating and needlessly confrontational, especially at the beginning. I have also been in many meetings where I have been ignored, patronised or accused of being emotional (women are emotional or aggressive whilst men are passionate and assertive!) More worryingly, I have been subjected to some behaviours which would be considered unprofessional, and I was told by more than one male social enterprise leader that our business would never last and be gone in a few years. So much for supporting each other and mutuality!

I’m very proud of where we are at as a social enterprise 8 years down the line; we now have a presence in 11 countries and lead the way in meaningful social enterprise accreditation internationally. The sector as a whole has made some good progress, but needs to really reflect its values of mutuality and respect for all.  We all want to make the world a better place and I have great hope for the future – keep up the good work!

Lucy Findlay

Alternative models of business – time for a change?

John McDonnell at Labour Party Alternative Models of Ownership conference

John McDonnell speaking at Alternative Models of Ownership conference

Last weekend the Labour Party held a conference, where it launched a report highlighting Alternative Ownership Models. It criticised the prevailing model of public service delivery and highlighted some of the failures of the corporate sector.  It also challenged the old idea that renationalisation means bringing services back inside the public sector itself.

I too have written on many occasions about important lessons that big business could learn from alternative business models, e.g. social enterprises, particularly with regard to delivering public sector services. As we continue to see high profile private sector/corporate service delivery debacles, which put shareholder interests before people and communities; Carillion, Virgin Care, G4S to name just a few recent examples (not mentioning the banking sector!), I can’t help thinking that we should surely have reached a turning point by now?

There is another way, which offers a credible alternative to this corporate approach; social enterprise offers a flexible business approach to tackling key social issues, without the over-riding pressure to make profits for shareholders and investors. Frustratingly though, the response usually seems to be ‘how can we get social enterprises to scale up to meet the needs of commissioners and become more like corporates?’ By focusing purely on growth, the risk is that services become routinely standardised and therefore lack the flexibility to tailor services to the needs of the public. How many times have you been stuck on the end of a phone to a call centre only to speak to someone who has a standard response and can’t understand your individual issue and provide a satisfactory solution?

Social enterprises can offer a more flexible tailored approach that actually focusses on local need rather than ‘efficiency savings’ aimed at providing dividends and bonuses for shareholders, directors and investors.

Thankfully, consumers seem to be cottoning on quicker than the powers that be; the recent 2017 Ethical Consumer Markets Report showed that almost ¼ of respondents reported buying goods/services specifically because of a company’s ethical reputation, a 28% increase on the previous year. Hopefully this trend will force the hand of the public and corporate sector – to compete and survive, they will need to prove they are creating a positive impact on society and the world around us.

Although it may be considered naïve to think that we may see a day when social enterprise becomes the business model of choice, I would like to think that at the very least we may see an era where big businesses take inspiration from the example set by social enterprise, to consider public value as a key criterion when making decisions, rather than the other way around. I’ve lost count of the times when we have been required to listen to corporates tell us how to do things.  It would also be great to see more attention being paid to the motivations of the business rather than just putting a good bid together that over promises and under delivers.

Key lessons can be learned, much of it concerning change in the corporate mentality – profit is of course important for survival, but this shouldn’t come at the expense of everything else. There needs to be an end to ‘lip service’ and meaningless CSR claims, replaced by a system that looks realistically at the promises made by bidders and their track record (e.g. what is it at the expense of…. customers, beneficiaries, patients, students?).

Corporations need to view society and the environment as truly active stakeholders and therefore should consider public interests as a high priority when designing and delivering services.

 


Adapted from a guest blog written for Your Public Value, published on 9th February 2018

Lucy Findlay at launch of the Social Enterprise Mark in 2010

Another year older, another year wiser?

As we celebrate the 8th anniversary of the launch of the Social Enterprise Mark, I am proud of our progress, and how we have remained true to our original aim of identifying and certifying genuine social enterprises, and more latterly emphasising the upholding of standards to support this aim.

Since 2010, Social Enterprise Mark CIC (and formerly RISE, the umbrella body that supported social enterprises in the south west of England), has acted as an arbiter of robust social enterprise standards, working to ensure the social enterprise business model remains ethical, credible and commercial, through independent accreditation.

It would perhaps have been easier at times not to have ‘stuck to our guns’, but we have learnt many valuable lessons along the way. Plus, I do pride myself on the fact that my USP is not following the crowd! We have continually adapted our products to the changing marketplace, responding to customer’s needs, market opportunities and changes to the economy.

Launch of the Social Enterprise Gold Mark at House of Commons in 2014

Launch of the Social Enterprise Gold Mark at Houses of Commons in 2014

For example, we developed and launched the Social Enterprise Gold Mark in 2014, as the first (and only) standard of social enterprise excellence. This was in response to people questioning how you can identify excellence and good practice in social enterprise. The Gold Mark is not just an accreditation; it scores businesses in different areas of governance, ethical business practice, financial transparency, and social and environmental impact, and also provides an action plan going forwards to ensure continual development.

As we continue to see high profile private sector/corporate service delivery debacles putting shareholder interests before people and communities, e.g. Carillion, Virgin Care, G4S, Capita etc etc (not to mention the banking sector!), I can’t help thinking that we should surely be at a turning point by now?

The debate nationally still seems to be – ‘how can we get social enterprises to scale up to meet the needs of commissioners?’ Surely this is the wrong question. Bigger and bigger often leads to standardisation, mediocrity and a lack of flexibility to the local circumstances.  Plus, there is another way and it does not have to copy the corporate world! Social enterprise offers a flexible, credible, business approach to the problems and issues that society has, without hands tied behind its back with pressure from shareholders and investors. Maybe one day the penny will drop?

It does appear to be dropping with consumers; the 2017 Ethical Consumer Markets Report showed that almost ¼ of respondents reported buying goods/services specifically because of a company’s ethical reputation, a 28% increase on the previous year. The tide is turning and hopefully the public and corporate sector will sit up and take note and we will see a new paradigm where businesses can’t just tick a box anymore – they actually have to prove that they are making a positive impact on society and the world around us. Maybe then we will welcome an age where social enterprise is lauded as the true business model of choice, proving that it is not just a ‘lip service’ CSR department.

In anticipation of this, we believe it is crucial to get ourselves prepared with clear standards, which differentiate and protect the integrity of genuine social enterprises, and to help consumers identify businesses that are committed to truly trading for the good of people and planet.

That is why, as we embark on our 9th year as the social enterprise accreditation authority, I am confident that we are moving in the right direction and that the big times are still to come!

Lucy Findlay

It’s time to put social value at the core of our public services

Former ACEVO Chief Executive Asheem Singh hit the nail on the head in his recent piece in the Guardian about the collapse of Carillion. I have written many times on the risks posed by the relentless focus on price above all other considerations when awarding public sector contracts (e.g. Cutting out a more effective way of doing business?)

This is not the first such story we have heard of big corporates failing in their delivery of public services; in fact they seem quite commonplace nowadays. So when will the Government recognise the increasing need to prioritise organisations that create added social value above and beyond the core service being commissioned?

Social enterprises, at their core, are committed to using income and profits in maximising social outcomes above that of individual profit motivations, creating real and lasting benefits for society. By embracing these alternative business models, the Government can move away from the short termism that has blighted public sector commissioning in recent years, and move towards a future where social value sits at the heart of our public services. It may not be the cheapest option on the face of it, but it could lead to significant savings in the long term.

Some of the work is already done…. the legislation already exists to require public bodies to consider the wider economic, social and environmental impact of the services they commission. It is a case of the Government putting their money where their mouth is, by doing more to ensure that the Social Value Act is fully implemented across our public services and widening its potential application to other areas of public expenditure.

As Asheem points out, social enterprises should take the Carillion debacle as a ‘platform for action’. It is a prime opportunity for us, as a sector, to demand changes and present social enterprise as a solution that can ensure public interests are put first and foremost in service delivery.

Lucy Findlay

A new year’s resolution that you can stick to

I am sure many of you have recently set new resolutions for the year ahead, be they personal goals (e.g. eating healthier or exercising more) or a commitment to make changes on a wider scale (e.g. using less plastic, getting involved in volunteering). However, how many of us actually stick to our resolutions for the whole year (and beyond)??

Perhaps then we should focus more on long term permanent changes to our behaviour, rather than short term ‘fads’ that we are likely to give up on at some point. Given that 2017 saw continued growth in sales of ethical products (up for the 14th year in a row), this gives me hope that perhaps more people will start to focus on their consumption habits and consider the impact of these on the wider world. An easy start would be pledging your commitment to supporting a growing movement of businesses serious about creating positive change.

We launched our Beyond the Badge campaign last year, to help consumers and organisations do good business, by looking out for credible independent labels as proof that a business is living up to its claims, therefore enabling them to make more informed choices.

Beyond the Badge campaign partnersTeaming up with a diverse group of fellow standard-setting bodies that share common values and principles in our approach to accreditation, we aimed to engage consumers with independent standards/labels and educate them on how these can help them to identify businesses that are serious about doing good.

We were excited to recently welcome Investors in People, the standard for people management, as a campaign partner, and would be keen to hear from other organisations interested in getting involved.

Despite the reported increase in ethical consumerism, we are conscious that there is still work to be done in promoting this message on a wider scale, to encourage everyone (both consumers and businesses) to consider the impact of their purchase decisions. This is why we are continuing the campaign into 2018 and I encourage you all to ‘Go Beyond the Badge’ this year, and look out for credible independent labels that actually mean something.

Independent third-party standards play an important role in providing an external endorsement of claims made by businesses – that is, they help consumers know that they can trust a business is committed to doing good. This year, it is one of our own resolutions to push this message into the mainstream, and encourage consumers and businesses across different sectors to use such standards and labels to be sure they are buying from a company they can trust.

I invite you all to commit to a New Year’s resolution you can stick to – you can start by signing the campaign pledge (below) and spreading the word to your contacts.

Beyond the Badge pledge

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Lucy Findlay

Profiteering from the NHS – have we reached a new low?

Back in 2014, I predicted that we would, in the future, question the values that are used to make public spending decisions.  However, we now seem to have reached a new low.

Following an unsuccessful bid for a children’s services contract in Surrey, Virgin Care had threatened legal action.  This has resulted in hundreds of thousands of pounds (if not a few million) being taken out of the local cash-strapped NHS, which could have been used to help diagnose and treat people of all ages, in order to settle the dispute out of court.

Virgin Care has the power of a big corporation and a team of lawyers behind its every move.  Most tenderers could not, and would not, sue the NHS if they failed in a bid.  However, when the internal values of the business are first and foremost commerciality, the logical step is to challenge if you can.  I also wonder if this tactic will make other Commissioners think twice about turning down a Virgin Care bid?

With more than 400 contracts, Virgin Care has a growing track record in the health and social care world, but at what price?  They might make a big deal about how they will improve services and treat staff well, but someone has to suffer with profit maximisation being squeezed from the tight NHS budget.  The cuts in front-line staff ultimately lead to a poorer service for patients, who have no choice in the matter.

At least in this case the winners of the bid were two social enterprises and an NHS Trust, which will not be focused on creating profits for shareholders.  Surely it would make sense for this to become a more explicit criterion for commissioners to judge a contract?  Not only is it better value for money, but the values of the service are aligned to NHS delivery.

My Christmas message, and wish for 2018, is that public spending decisions need to become more values based!

Conquering misconceptions around social enterprise

We were interested to see a social enterprise pitching on Dragon’s Den recently. It’s always good to see alternative forms of business profiled in the mainstream media. However, it was disappointing to hear Peter Jones dismissing the entrepreneur by saying she was confused as to whether her venture was a business or a social enterprise…. this is a continual challenge for the sector; the misconception that social enterprises aren’t real businesses.

The first rule of social enterprise is that financial sustainability is of utmost importance, as without this, a business will not be able to achieve their social objectives. We don’t agree however that there is a choice to be made between operating a business or a social enterprise; the choice is what you do with the profits a business makes… this is essentially what defines a social enterprise.

It seems the sector is struggling to shake off the notion of a charity type model, reliant on grant funding and donations, even though recent figures show that almost ¼ of UK social enterprises earn more than 75% of their income from trading*. Although some progress has been made in bringing social enterprise to the mainstream, it seems we still have a way to go in achieving complete recognition and understanding of the business model as a credible alternative to capitalist structures.

So, how can we address the misconceptions that surround social enterprise?

The independent accreditation provided by the Social Enterprise Mark and Social Enterprise Gold Mark offer a solution by providing a credible standard, backed up by sector agreed criteria as to what constitutes a social enterprise. Organisations are externally assessed on application and on an annual basis, to ensure they are truly operating as a social enterprise, with the core motivation of using profits and income to create benefits for society and the environment. These Marks provide a visual sign that a business is trading for people and planet; trading being the operative word.

The key is credibility; to be taken seriously by consumers and businesses, social enterprises need to demonstrate they ‘walk the walk’ when it comes to operating as a credible organisation that is committed to creating real social change. The Beyond the Badge campaign aims to raise the profile of independent labels and how they can help consumers (and businesses for that matter) to easily identify businesses that are proven to be doing good.

We clearly still have a journey ahead of us on the path to widespread awareness and understanding, but, by enabling organisations to demonstrate they have a sustainable business model, with the potential to create real social impact, we are doing our bit towards conquering these common misconceptions.

 


* State of Social Enterprise report

Social Enterprise Gold Mark

Beyond certification – the Mark of a better business

Following the news in the summer that Sainsbury’s are replacing the established and trusted FAIRTRADE Mark with their own in-house certification scheme, there seems to be a general trend in this direction by big producers. Multinational giants Mondelez International (which owns Cadbury), Unilever, and Barry Callebaut (world’s biggest producer of chocolate and cocoa products) have all confirmed they are now using their own ethical standards, eschewing independent third party labels.

This is a worrying development. How do we know how rigorous standards are really being applied and assessed if they are not subjecting themselves to third party scrutiny? Multinationals and corporates make huge shareholder profits, and not to submit themselves to third party scrutiny seems to further reduce the accountability of their operations. As I wrote in my blog about the Sainsbury’s story back in July, we are concerned that this could also lead to erosion of consumer trust in any labelling schemes, which should ultimately exist to engender this trust, not damage it.

Social Enterprise Mark CIC has recognised that standards should not just provide openness and transparency, they should also challenge the business to become even better at what it does. This is why we now collect social value information on an ongoing basis, alongside developing the far more demanding Social Enterprise Gold Mark, which goes into much more depth around ethical practice in every area of the business, from procurement and sourcing to employee relations and governance.

The Social Enterprise Gold Mark was developed to provide a quality benchmark for social enterprises that can demonstrate excellence in key business areas, such as governance, business ethics, and social/environmental impact. As well as providing proof of a commitment to business excellence, it also acts as a business development tool – successful applicants receive an individually tailored action plan for continuous improvement, in line with Social Enterprise Gold Mark guidelines of best practice. Therefore, it is very much an ongoing development process, not just covering a snapshot in time at the point of assessment.

Given the high-profile scandals that have hit big brands such as Mondalez (formerly Kraft), which came under fire in 2011, when they closed a UK chocolate production factory following their takeover of Cadbury, there is a need for more businesses to submit to the scrutiny of external assessment with regards to their business practices and how they make and distribute their profits, and how they treat their workers.

At the time of the Cadbury takeover, Mondalez made assurances that production would remain in the UK and that the Somerdale factory would remain open. However, less than a week later an announcement was made that the factory would in fact be closed, at the cost of thousands of jobs.

In order to prove applicants’ businesses are excelling as genuinely socially responsible organisations, the assessment for the Gold Mark digs deeper to examine key aspects of the operations of a business. This includes looking at how they govern the organisation, employee engagement and terms of employment, as well as how income is used to create social and environmental impact.

Maybe this is the future of certification…. A visible and trusted identifier of those doing better business, in every aspect of their operations.

Lucy Findlay

Providing credible standards for social enterprise

Lucy Findlay blog for the Regulator of Community Interest Companies


Upholding the standard for social enterprise

For more than 7 years, Social Enterprise Mark CIC (and formerly RISE, the umbrella body that supported social enterprises in the south west of England) has acted as an arbiter of robust social enterprise standards. Since our inception back in 2010, we have 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 ‘mainstream’ business models.

We provide two accreditation ‘marks’, which assess applicants against robust qualification criteria to provide an independent guarantee of their commitment to creating benefits for people and planet, through the trade of goods and services.

The Social Enterprise Mark is the only internationally available social enterprise accreditation, enabling credible social enterprises to prove they put the interests of people and planet before shareholder gain. The Mark acts as an independent, externally assessed guarantee that a business is operating as a true social enterprise, with the central aim of using income/profits to maximise social benefit, which takes precedent over generating dividends for owners/shareholders.

The Social Enterprise Gold Mark is a unique enhanced accreditation for social enterprises wishing to demonstrate their excellence, assessing three essential areas of business operations:

  • Governance – stakeholder representation in strategy and operation
  • Business ethics – complaints handling, diversity, equality, pay, workplace issues and social auditing
  • Social impact and financial transparency – how income and profits are used to create added social and environmental impact

The accreditation focuses on measuring what makes a social enterprise excellent, and how they can continue to improve their impact. Successful applicants receive an individually tailored action plan for continuous improvement, in line with guidelines of best practice.

Community Interest Companies – the perfect fit for social enterprise

CIC RegulatorAlthough there is no single legal structure for social enterprise, the Community Interest Company (CIC) model was specifically designed with social enterprises in mind. It aimed to bridge the gap between standard commercial businesses and charities, recognising that some businesses wanted to provide some benefit to the community through their commercial activities but without the regulation and restrictions which come with being a registered charity.

CICs automatically meet most of the criteria covered by the Social Enterprise Mark. Over ¼ of our network of accredited social enterprises are registered as CICs and we certainly view the CIC model as a favourable one in terms of assessing eligibility for accreditation.

Broadening horizons – looking to the future

As a recognised and established social enterprise accreditation authority, we are increasingly broadening our horizons, both in terms of engaging with new markets and in expanding our offer internationally.

Over the last year, we have become increasingly engaged with the Higher Education sector, with several HEIs showing an interest in proving their commitment to using profits to create benefits for people and planet. This is an encouraging development, as it symbolises a commitment to creating social change, for which such institutions have a huge potential scope to achieve, given their size.

There are now 8 HEIs which hold Social Enterprise Mark/Gold Mark accreditation, with Plymouth College of Art, The University of Northampton, and The University of Winchester recently being awarded the Social Enterprise Gold Mark at our conference in June.

We have also seen a growing interest in social enterprise at an international level, and strive to be the global champion for credible standards for social enterprise. Following the approval of UAE based C3 as the first international Social Enterprise Mark holder in April 2015, there are now 6 organisations outside the UK that have been awarded the Social Enterprise Mark, including FLOCERT (the global certification body for the Fairtrade Mark) and the Network of Asia and Pacific Producers (the network of Fairtrade certified producers in the Asia Pacific region).

Lucy Findlay in TaiwanAs well as welcoming applications from social enterprises across the world, we offer international consultancy services, to advise global counterparts looking to set up equivalent social enterprise accreditation schemes within their own countries. For example, in March 2016, we were approached by the British Council and invited to China to advise on the development of a Chinese social enterprise accreditation system, and in 2015 I was invited by the Taiwanese government to speak about the Social Enterprise Mark at the International Social Enterprise Conference.

So, in summary, we have bold ambitions to continue to develop our position as the global champion of credible standards for social enterprise!

 


This blog was originally posted on the Office of the Regulator of Community Interest Companies blog on Friday 8th September 2017.

Lucy Findlay

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.

Lucy Findlay

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.

Lucy Findlay

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.

Lucy Findlay

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!

Lucy Findlay at launch of the Social Enterprise Mark in 2010

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.

Lucy Findlay

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’.

Lucy Findlay

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.

Lucy Findlay

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.

Lucy Findlay

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/.

Lucy Findlay

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: