Blog

SEC publishes first “state of the sector” survey on Social Enterprise Day

Social Enterprise Day greetings! The Social Enterprise Coalition has just announced publication of its first ever ‘state of the sector’ survey (opens PDF in new window).

Sponsored by the Office of the Third Sector, its findings make encouraging reading. Almost a  thousand SEs were sampled and the survey found that:

  • Social enterprises are twice as confident of future growth as  typical small to medium enterprises (SMEs), with 48% of social enterprises responding positively as opposed to just 24% of SMEs.
  • Over half (56%) have increased their turnover from the previous year while less than 20% have seen it go down. This is a considerably better performance than SMEs in the UK, where only 28% increased their turnover and 43% saw it go down.
  • Two-thirds of those polled are making a profit, and around 20% are breaking even.

This suggests that SEs are performing better during the current economic downturn than conventional SMEs.

I’ve only skimmed the report but it looks as if it contains just the kind of national-level sector intelligence we can all make use of. Well done, SEC!

Loaf — a new social enterprise in Brum

Loaf is a new social enterprise in Birmingham — and appropriately enough is the brainchild of…Tom Baker (no, you couldn’t make it up), NHS dietician, cook, baker, advocate of real food, artisan produce, local produce etc.

As well as knowing how to build and fire a traditional wood-burning oven in which he bakes traditional sourdough breads, Tom also clearly knows how to use the media — Loaf is all over the Birmingham Post.

Paul Hanna is going to an event at Loaf HQ next week so we’ll get him to blog more for us.

You can read more about Loaf’s services here.

Crisis pioneers SROI-based ‘share offer’ in new Skylight Centres — a model for others pursuing philanthropic investment?

Crisis, the homelessness charity, is currently promoting accredited education, training and employment centres called Crisis Skylight Services. The charity already has Skylight Centres in London and Newcastle and is planning a new Skylight development in Birmingham, where it has already been consulting with other providers and investigating potential sites.

What’s interesting about this story — covered recently in Third Sector Online and elsewhere — is the investment and fund-raising model that Crisis has adopted for these centres.

In partnership with the Financial Times, Crisis has issued a SROI-based investment prospectus, similar to a company share offering — the first such prospectus ever issued by a UK charity. This follows research carried out for the charity by independent specialists Oxford Economics, whose report and SROI formula are available here.

This is not, of course, the first time that UK not-for-personal-profit organisations have sought to use SROI to encourage ‘philanthropic investment’ — but the Crisis offer has an additional innovative angle. Because it revolves around similar Skylight centres, it offers comparability and thus enables investors to base their investment decisions not just on location but on the comparable levels of social return these locations generate.

Being a major, national charity ‘brand’ has clearly been of immense assistance to Crisis in this, as has its undoubted media savvy and ability to strike powerful national partnerships, but I reckon many other smaller organisations will also be watching closely to see how this works and whether it offers a model that they too might capitalise on.

Social enterprise slot machines?

There’s a fascinating and thought-provoking article in today’s Guardian Society about a social business that has turned to gaming and bars to offer jobs to the hard to employ in great Yarmouth.

Hospitality and Grow is a partnership venture between Towering Leisure — Great Yarmouth-based leisure and gaming company — and the award-winning training and employment social enterprise, the Grow Organisation.

At first glance it seems that the ‘products’ offered by Hospitality and Grow – gaming arcades and slots – could not be more at variance with its mission… But as Daryn Ferguson, the former croupier and casino manager  brought in to run the project, says in the piece,  this is “Yarmouth’s relevant employment” and the hardest to employ — ex-offenders, those with mental health problems and recovering drug  and alcohol addicts — “shouldn’t be excluded from that”.

Live from the Social Enterprise World Forum — Day 3

Another excellent day! I am never sure about study tours – over the years I seem to have visited many social enterprises which are in reality projects and bear little resemblance to anything enterprising! Top of my list of things to do was to visit the Bonsai Social Firm – famous because it began a series of development work in Scotland on acquisitions which is now spreading southwards.

‘Bonsai – the imagination tree’ became a social firm 3 years ago, bought from a family looking to retire – last month it merged with another garden centre [this I hadn’t known] and the new garden centre provides paid employment both for people with learning disabilities and people with mental ill health. What really was interesting was that this is a business of scale, it owns its own land and doesn’t receive payments from the government. What interested me more was that the merged company has been operating a garden centre for 20 years and originally financed the move from day activities to business start up by borrowing the money from a bank against some property they had. I thought it was a great business and didn’t disappoint!

The second visit was to Prahran Mission – a well established agency for homeless, long term unemployed and those with mental ill health. They have just opened a ‘vintage clothes shop’ – not especially exciting but what was interesting was the decision-making process that has led them down the road of social enterprise and how they plan to manage 2 staff teams, one providing traditional support/care and the other operating a social firm.

The final visit was to Tjanabi [Boonwurrung Foundation] – a fantastic restaurant in the heart of Melbourne serving food based on the native food of the reflecting the six seasons of the area. They took this approach so not to over hunt, fish or pick food and to respect it. We met Auntie Carolyn the elder of the tribe who has a considerable reputation as a social entrepreneur. She established the restaurant to resource her work with her community. She has played a significant role in the struggle for recognition and rights for the Boonwurrung people – which ended up with the first indigenous land use agreement for the Melbourne area.

The other elder I met was from the Woiwurrung Tribe [at the opening of the conference] and these two tribes share the land of Melbourne. I have met some amazing and very strong women on this trip! It’s unusual for women to be leaders but apparently many of the men die young and there are real problems with alcoholism.

By the way – the menu today had crocodile and kangaroo – guess what I had – and the plates were dressed with local berries and herbal leaves – it was superb! One of the leaves made my mouth go numb and then when I drank water there was sweetness in my mouth – explain that one if you can!

Tomorrow an eco centre!

Live from the Social Enterprise World Forum — Day 2

Let me tell you a joke I heard today: How many social entrepreneurs does it take to change a light bulb? 15: 2 for feasibility; 5 board members; 3 bid/tender writing; 3 delivering services; 2 to evaluate. I thought this was quite funny!

The themes for today were ‘pathways to success’ and ‘investment’ both key themes for the UK.

The first session was a debate on whether ‘there’s no business like social business’ – a comment made by Liam Black. The session was thought provoking with the 6 debaters taking opposing views. One of the speakers against was Andy Cooper CEO from LeapFrog Investments – the world’s first micro-insurance fund – honoured recently by former-President Clinton. It was really interesting because Andy was clearly struggling being against! The calibre of the speakers has been amazing and as usual you meet up with Brits you haven’t met before but who have wonderful ideas and practices.

Needless to say the debate was draw – It must have been fixed! It was a good way, though, to get some of the contentious issues out in the open like definition, like what’s the difference between private business doing social good and social enterprise? And you’re having no impact because you can’t prove it!

I went to a good session of the SE market place and how can we grow it internationally and I thought the following were really good pointers for development:

  • Developing a shared identity – using similar language, working with similar objectives
  • Knowledge and information development ie research and information base
  • Development of leadership and grassroots support
  • Investment
  • Creation of markets

Kris Prendergast called these ‘field’ building frameworks! She is the co-ordinator of the Social Enterprise Alliance in the States – I was rather pleased that her analysis rather matched up to our own thinking!

The second workshop was pathways for women social entrepreneurs – a truly inspirational session with presentations from the USA [Women’s bean project], UK [Sunderland Homecare] and South Africa [a SE development agency for women and excluded young people].

Other sessions today included a world café visiting 3 SEs in forty five minutes, a session on learning from inspirational social entrepreneurs and a closing session on shaping the sector for the next ten years.

Its been very good!

Next year the conference is in San Francisco on the 28th-30th April – all are welcome!

For the next 2 days I am visiting local social enterprises around Melbourne – so there’s more to come!

Live from the Social Enterprise World Forum — Day 1

Well what can I say – what an amazing day!

The key themes to start the conference were ‘new markets, employment and sustainability’ three absolutely key issues for the growth of the sector. The first session kicked off with a well known TV presenter interviewing a panel collected from Australia, New Zealand and Tasmania exploring ‘the world is a village’ and the usefulness of social enterprise from a range of perspectives. These included young indigenous people without work and women who now have fewer places in Parliament, on boards of directors and as CEOs.

We explored how ‘profit’ can be thought of as the dark side if you don’t look at sustainability and consider the need to take a long term view not just a financial return. They asked people to watch money moving around communities to understand how money keeps communities alive and how the health of communities depends on enterprise to generate money. Therefore money = social capital!

We were asked to understand that the indigenous communities in Australia and New Zealand respect the past, the present and the future and therefore have 60-100 year plans that consider long term sustainability. They are preparing the world for their children, their children’s children and their children’s children’s children – we seem to have forgotten about this in the northern hemisphere and we need to redress it!

I attended a workshop on market making for the indigenous community in Australia and was one of only two international guests attending – I learnt much about enterprise and culture and ownership – and how very few enterprises there are owned by the Aborigines [0.17%] !!!! The other workshop was on guerrilla marketing – good fun!

I was very privileged this evening to hear the only indigenous opera singer – very famous internationally – she opened the Olympic Games in 2000. She told her very moving life story which was that she was one of the lost children who was taken from her aborigine mother at 3 weeks old and given to a white family to be brought up and then her subsequent journey to discover her roots. It was very moving and her singing was awesome!

Can’t wait for day 2!

Live from the Social Enterprise World Forum — Melbourne 2009

I’m writing from the Social Enterprise World Forum (SEWF) 2009 in Melbourne right after the opening ceremony on Tuesday 6th October.

I arrived late Monday evening (5th Oct) having travelled for about 24 hours via Heathrow and Bangkok.

I was very lucky to meet Gerry Higgins (CEO of CEiS) at the airport, along with his party of 20 people on a study tour of Australia, part-funded by the Scottish Government. I am impressed by the vision of these study trips which Gerry has been running for the past 3 years. He brings together key individuals from social enterprises, trading VCOs, infrastructure organisations, banking and the public sector for two weeks and of course they are experiencing new and exciting social enterprises, cultures and travelling together. The great by-product being real understanding of how one another’s sectors work and superb networking. It’s a great aspiration of mine to get together a similar trip from the West Midlands — it can only be good — maybe we can get AWM to fund this?

SEWF is the first event of its kind to take place in the pacific region and it will build on the success of the inaugural conference held in Scotland last year. Leaders and champions from the USA, Asia, Europe, Canada, Africa, New Zealand, UK and Australia are all attending.

In Australia they aim for the conference to act as a catalyst raising awareness of social enterprise and for growing the sector there. There are about 400 people here, from all countries – it’s sold out!

The opening ceremony was amazing — we were inviting to a ‘smoking ceremony’ at the Parliament House of Victoria which was led by Aunty Joy Wandid Murphy the leader of the indigenous population whose land Melbourne is built on. The smoking part involved burning damp leaves and it is symbolic of starting afresh and rebirth. There was dancing and music from the didgeridoo and face painting with traditional markings. I was lucky enough to get yellow paint smeared down my face – I felt very honoured. The aboriginal people were charming and very welcoming.

The session was opened by a whole range of speeches from dignitaries including a minister and a local politician and of course words from the host agencies (Social Traders and Social Ventures Australia).

The programme looks great and I now can’t wait for today when the input starts!

Lessons from ‘the end of journalism’

The following may seem an awful long way off-topic, but I don’t think it is. The adaptation, evolution and sometimes the demise of business models is central to social enterprise and indeed to all kinds of enterprise.

I have been following a fascinating discussion on the Digital Journalist website about the death of journalism and especially photojournalism. The discussion ranges from technical solutions, such as paywalls, to ‘social’ solutions, such as philanthropic investment in journalism (as a means of promoting and supporting public good), to business solutions, such as strategies to consolidate news/information sources, thus offering users single, convenient content-accounts, and offering advertisers larger, consolidated audiences.

The trail then went here, Revolutions in the media economy, four long and closely argued posts on a blog by David Campbell.

And then here, The end of journalism?, a post on Robert J Picard’s blog, The Media  Business. Picard — who is Hamrin Professor of Media Economics at Jönköping University, Sweden — argues that current attempts to save  ‘news’ (i.e. to ‘monetise’ it) confuses ‘product’ and ‘practise’. Journalism, he argues, has never been primarily a product: rather, it is a “body of practices”, and will be saved when we work out and understand “what manifestation it will take next”.

How is all this relevant to social enterprise, I hear you ask. Well, differentiating between ‘practise’ and ‘product’ can be extremely important to social enterprises. Social enterprises ‘practise’ a social mission — but they do this by trading in ‘products’. That’s where their revenue comes from. In some cases they may even find that their customers have little or no interest in purchasing what the business ‘practises’ (its social mission), focusing almost solely on the quality, price and usefulness of the product on offer. There may in these instances be a necessary differentiation between ‘practise’ and ‘product’, even if only in marketing terms.

Differentiating between ‘practise’ and ‘product’ is certainly relevant to many conventional voluntary organisations, some of which are struggling precisely because they have only their ‘practise’ to offer, and for this there are a declining number of paying customers.

The idea that activities can be divided into two component parts — their practise, and their products — seems a useful tool in helping us to understand how (and why) some business models must evolve if they are to survive. And more than this, it also seems to offer some useful lessons in how social enterprises might be even more adventurous in ‘separating’ product from practice — and I don’t mean by marginalising their social mission, I mean by raising the profile, profitability and performance of their products. After all, the greater the earning power of the products, the more good we can practise.

Anyone for loan finance?

Having just prepared and delivered my twelfth annual report to ART members, I have been reflecting once again on how low the take up of our kind of finance continues to be from the social enterprise sector in Birmingham and the West Midlands.

ART (Aston Reinvestment Trust) is a social enterprise itself.  We were set up to alleviate poverty through enterprise, supporting job creation by offering loan finance to businesses, including social enterprises, unable to borrow the money they need from banks.

While the social enterprise business model has grown in popularity over the years and there is currently a particularly strong political drive to increase the Third Sector’s capacity to help tackle worklessness, we have seen the number of enquiries for loans from the sector diminish rather than grow.  In contrast, we have just reported to our members a record year for lending to the commercial sector.  This is hardly surprising, given that we are designed to help when the banks say no, but we do wonder why the social enterprise sector isn’t following suit.

In 1999-2000 we ran an EU-supported pilot, during which we lent over £400K to social enterprises.  It was heralded as a great success and we anticipated that demand would continue to grow.  But that has not proved to be the case.  ART has now lent over £8m since launch, including over £1m to social enterprises.  And we have supported some of the higher growth social enterprises in Birmingham – Future Health and Social Care, Jericho Foundation, ENTA and My Time to name but a few.

However, in the last two years our loan output to social enterprises and the wider Third sector has dwindled to almost nil – and we are not alone in the West Midlands in this: there is a much lower take-up of loan finance in this region than in other parts of the country.

As the proverbial pig flies across the keyboard, I might speculate that the reason for this is that the banks are freely lending to social enterprises in Birmingham and the West Midlands, so that there is no need for ART and other specialist social lenders.  But I don’t think that’s it.

Are the Boards of social enterprises too concerned about perceived risks associated with loans, preferring to chase grants – even though they are getting harder to find?  Are the managers of social enterprises in Birmingham more risk-averse than those in other areas of the country?  What effect will the introduction in Birmingham of the much-welcomed Social Enterprise Development Fund have, which encourages growth from trading?  Will there be an upsurge in demand for the combination of loan + grant + support lauded in the ACF evaluation reported in this blog in July?  Or just a mad scramble for the grants!

My belief is that reliance on grant finance can be a very precarious existence and that loan finance can offer stability, freedom to spend on what you want rather than what is prescribed, involves less cumbersome admin and can keep organisations afloat by overcoming short term cashflow problems.  Used wisely, they are a good thing.

But I would say that wouldn’t I?  I would be happy to debate the pros and cons with anyone interested!

‘Social enterprise’: does the definition need tweaking?

Third sector minister Angela Smith thinks so. Speaking at a Labour Party conference fringe event yesterday, she acknowledged that the current definition is “pretty broad” and in her view requires “a bit of tweaking” in order to address  some criticisms “on the left”.

In 2002, in its first social enterprise strategy, Social Enterprise: A Strategy for Success, the government defined social enterprise as:

“…a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.”

This definition has been reiterated in each subsequent social enterprise policy document, including 2006’s Social enterprise action plan: Scaling new heights.

Interestingly, however, the Office of the Third Sector now also adds:

This means organisations that trade goods and services and use the majority of their profits for social and environmental goals.

How we define social enterprise has a critical impact on shaping wider attitudes towards, and expectations of, the sector, and OTS’s addition puts a necessary emphasis on trading and earned income, which surely are at the heart of social enterprise. Our definition/s should reflect this.

But perhaps more importantly, I think that any meaningful redefinition of social enterprise will also eventually have to address the issue of  proportion of income earned from trading. Many in the movement have already adopted a sort of ‘unofficial’ benchmark of 50%-plus income from trading to explain the kind of social enterprises they wish to support.

While the desire for a more inclusive ‘broad church’ definition of social enterprise was well-intentioned, I think it is now evident that in some respects it has made it harder rather than easier for people to understand the sector.

Revisiting the definition seems a necessary part of the current debate about awareness, profile and understanding of the sector. After all, if we can’t agree on how we explain social enterprise to ourselves, how can we explain it with clarity to anyone else?

Peter Holbrook might offer the new approach SEC needs

The Social Enterprise Coalition (SEC) announced yesterday that Peter Holbrook will become its new CEO when Jonathan Bland leaves next year.

I heard Holbrook speak at Voice 09. He’s currently CEO of Sunlight Development Trust in Gillingham, Kent. He was really good at Voice – quite challenging, but seemed like a good guy and Sunlight is remarkable.

As a social entrepreneur from outside London maybe he will help SEC move away from its obsession with Whitehall. Let’s face it, the government-can-make-social-enterprise-grow model has been given a pretty good airing over the last few years and is starting to look questionable. It’s time for a new approach and maybe he is the person to do it.

Mandy’s optics

Alright, I admit it in advance: this isn’t really about social enterprise. It was just irresistible. A piece in the Guardian yesterday reported that Peter Mandelson, secretary of state for business, gave an interview to The Economist in which he stated that the government’s new line on the need for public spending cuts did not constitute a U-turn; rather, it was a ‘change of optics’. The spirit of Sir Humphrey is not dead!

Of course, with so much of the market fuelled by public sector commissioning, spending cuts are likely to have a huge impact on social enterprise. But let’s leave that aside because there is a more important point. ‘We need to change the optic’ has unparalleled corporate cliche potential. It could become the new ‘big ask’, the new ‘going forward’. With some determined contributions it could even be the new ‘we are developing metrics for this’.

Rest assured, it will be coming soon to a meeting/conference/seminar by you.

The first person to report a sighting here will be rich in kudos if not cash prizes.

A bright future for Social Enterprise in Solihull

From its humble beginnings as a project within The Colebridge Trust, Solihull SUSTAiN has grown into a serious driver for change in Solihull in terms of Third Sector Support Services, Third Sector Development & Voice and Social Enterprise.

SUSTAiN is now the parent organisation leaving The Colebridge Trust free as its enterprise & community development arm to focus on what it does best. The Colebridge Trust is alive and well and thriving

The Colebridge Trust currently operates three Social Enterprises and two Community Projects.

The enterprises consist of:

Waterloo Woodwork which provides work experience and training for adults with learning disabilities and produces a wide range of quality timber products in the process.

Colebridge Communications is expanding to provide state of the art content managed websites at extremely competitive prices; a design to print service that covers everything from flyers to T-shirts; a mobile exhibition space in the form of a converted mobile library and a door to door distribution service in North Solihull.

Colebridge IT Services which can do anything from basic single PC maintenance to a fully integrated office IT network.

All of these enterprises have tremendous growth potential with highly skilled staff providing the very best products and services. Delivering excellence is key.

We are keen to talk to anyone who wants Wooden Products, Web, Print, IT and Communications services that offer high quality and excellent value for money. Contact Charles Rapson on 0121 770 8889 or email charlesr@solihull-sustain.org.uk to discuss.

The Community projects include:

Skills For Jobs – an already highly successful project, supported by the Learning Skills Council which supports long term unemployed people in North Solihull find employment. The projects success is attributed to the way it helps individuals remove the complex multiple barriers to finding employment through signposting to other services, focussed training and one to one support. Contact Sophia Nasreisfahany on 0121 717 5326 or email sophian@colebridge.org for more information

Community Health Trainers – a new projects supported by the Care Trust to help people in North Solihull develop healthier lifestyles by addressing diet, exercise, addiction and other lifestyle issues. Contact Harpreet Sohal on 07824 775 521 or email harpreets@solihull-sustain.org.uk

Recession will change voluntary sector for good – social enterprise will dominate, says third sector experts

Third Sector magazine’s recession watch panel says the third sector landscape will be permanently changed by the current economic downturn, according  to a story in the online mag today.

Changing patterns of giving, the rise of public sector commissioning and the need to generate greater levels of independent income are all having an impact on the way the sector operates, says the panel. Social enterprise will continue  to become an increasingly dominant business model in the wider sector, partly as a consequence of funders looking to invest their money for social good rather than simply donate it, and it is also likely that mergers amongst bigger charities and voluntary organisations will continue as they seek to scale-up  to compete for the largest public sector contracts.

In fact, these are trends that have been evident in the sector for four or five years. What is new is the accelerating pace of these changes.

Can charities & social enterprises run prisons?

Libby Brooks writing recently in the Guardian thinks not. The purpose of imprisonment, she says, is fundamentally punitive and cannot be reconciled with the third sector’s social mission — even (and perhaps especially, she seems to suggest) when this social purpose might be penal reform. The article revolves around the recent announcement by Turning Point and Catch 22 that they have been successful in bidding to build and manage prisons in partnership with private sector provider Serco in Liverpool and Manchester.

It’s an interesting piece and touches on some key issues to do with the role of the third sector in public service reform.

iSE celebrates 10th anniversary in style

IMG_5392IMG_5365IMG_5415

IMG_5431

On Thursday 3rd September iSE celebrated its tenth anniversary, hosting a dinner for over 80 guests at the Botanical Gardens. Welcoming guests, Sarah Crawley, iSE’s CEO explained: “iSE began life in 1998 as a European project providing employment opportunities for people with disabilities. At the end of this project we saw the potential — and the need — for continuing this work in the longer-term and set about establishing iSE as a permanent provider.”

It has been a long journey. The organisation was was originally set up by Sarah and current director Tony Davis and was incorporated as a company in July 2000. It now employs 13 staff — including workers in Aquamacs, the social firm ‘franchise’ it established in 2006 — and in just the past few months has bought its own building at Avoca Court in Digbeth’s Irish quarter.

Guests listened to a fascinating question-and-answer session with a panel of special guests — Sally Reynolds, the chief executive of Social Firms UK; Cllr Paul Tilsley, deputy leader of Birmingham City Council and its champion for social enterprise; Mark Cook, a partner at Anthony Collins Solicitors; Steve Harding, chair of iSE’s Board; and Kevin Lynch, co-author of Mission, Inc.: The Practitioner’s Guide to Social Enterprise, who had flown over specially from the US to attend the International Social Enterprise Business Models Conference in Glasgow, present a master-class on social enterprise, and speak at iSE’s dinner.

Sarah also presented five ‘Social Enterprise Hero’ awards to mark what she said were “outstanding contributions to the sector”. Awards were made to:

  • Alison Lawson, of AWM, for her championing of social enterprise within and beyond the RDA — many are unaware of the key role Alison played in helping to bring the national social enterprise conference Voice09 to the ICC in February this year;
  • Mark Ellerby for his outstanding work in promoting the sector while also managing groundbreaking social firm Concept Conference Centre at RNIB’s Birmingham headquarters;
  • Sharon Annakie, deputy CEO of Future Health & Social Care, one of the fastest-growing social enterprises in the country and Inner City 100 winners (“We should be proud that they are in Birmingham!” Sarah Crawley added);
  • Richard Beard, CEO of The Jericho Foundation, for his achievements both at Jericho and his generous wider support for the sector.

And here I must declare an interest. The fifth award was to me – the first time anyone has awarded me anything! – to recognise the contribution BSSEC has made to keeping social enterprise on the agenda in Birmingham. I couldn’t have been prouder.

IMG_5403Those who know iSE will recognise it as one of the most entrepreneurial business support organisations around. Congratulations to Sarah and to all the staff and directors at iSE — here’s to the next ten years!

Community Sector Coalition says new Compact is a charter for third sector sub-contractors

Today’s Third Sector Online has a story about the new ‘refresh’ of the voluntary sector Compact, currently available as a consultation paper until 12th October 2009.

The Community Sector Coalition (CSC) has already written to third sector minister Angela Smith saying that the draft lacks sufficient focus on the community sector and claiming that the “bulk of it” reads like “a Compact for third sector sub-contractors”.

I think they’re over-stating their case. The draft does acknowledge the importance of community-based organisations. It notes that they are the most numerous groups making up the third sector (estimated at 500,000) and make a contribution to local services, community cohesion, and mobilising volunteer effort.

What the draft doesn’t do is commit Government to any specific actions or principles in its dealings with the community sector. And exactly the same is also true of the social enterprise sector. In fact, beyond generalities, there are many areas where this revised version of the Compact fails to commit its parties to specifics.

Many will be more concerned that the revised Compact no longer mentions the term ‘full cost recovery’ (FCR). Instead, it says that public procurement should recognise the inclusion of relevant “overheads” and “administrative costs” in the prices quoted for delivering services, and notes that “back office functions” are often as vital to achieving success as “other more visible activities” (p.33).

The disappearance of FCR could be attributable to the fact that in June 2007, the National Audit Office published Office of the Third Sector: Implementation of Full Cost Recovery – a report which concluded that FCR was “too difficult to pin down in any practical way”, “too blunt an instrument”, and useful only as “a code” for fairer funding but not as “an accounting treatment”. The report also noted – more ominously – that FCR misleads organisations into thinking “that all costs will be recovered in all situations”.

While NAO’s conclusions about full cost recovery seem difficult to disagree with, it’s nonetheless fascinating to see principles which just a few years ago were being touted as intrinsic to the sector’s future already being quietly airbrushed out of the picture.

Don’t forget to have your say on the draft Compact before the 12th October.


“Getting More for Less: Efficiency in the Public Sector”

In conjunction with the think-tank Demos, the Social Enterprise Coalition has just published Getting More for Less: Efficiency in the Public Sector by Jamie Bartlett. Continue Reading →

A new ‘three tier’ brand for social enterprise?

Social Enterprise Live has just carried an interesting story suggesting that a new ‘three-tier’ branding package for social enterprises is being considered. Last year the Central Office of Information published Is Social Enterprise at a Crossroads?, research which indicated that of those most likely to support social enterprise only around 20% knew anything about it.

The national committee that has been set up to ponder this branding problem (the so-called social enterprise identifier steering group) believes that a three-tier approach which builds on the existing social enterprise Mark will help customers understand whereabouts an enterprise is on its journey to becoming ‘social’.

Steve Wylie, chair of the identifier steering group, acknowledges that  the strategy has inherent risks of ‘socialwashing’ — as environmental consumerism has resulted in ‘greenwashing’ — but says this can be avoided by ensuring that the brand is backed by ‘a clear set of principles, values and criteria’.

That the sector needs dramatically higher public awareness and understanding is undeniable, but can a branding strategy achieve this? Would it ever achieve the kind of widespread usage necessary to fundamentally change levels of public awareness? I this the idea we’ve been waiting for…or is it an over-sophisticated marketing fantasy?

Maybe it can succeed — Fairtrade branding, for example, has been outstandingly unsuccessful successful (which is what I meant to say originally, of course! — apologies).

Anyway, watch this space — the new SE brand will be unveiled on the 19th November, Social Enterprise Day.