One of the challenges that the social enterprise sector currently faces is clarity about its own identity versus the exponential explosion of company labels, such as: Social Business, Social Purpose Business, Social Purpose Organisations, Ethical Business, Social Enterprise, to name just a few.
What do these all mean and do the terms have any meaning to anyone outside the sector, or even within it?
Do they count for anything or are they just applied by the business on a self promotional basis? For instance, A4E describe themselves as a ‘social purpose business’ despite much publicity about the high proportion of profits that end up lining the pockets of individual shareholders.
Many people argue that what we call ourselves doesn’t matter, it is only the social/environmental impact that counts rather than how we get there. Of course impact is extremely important. But without looking at what motivates that business and the genuineness of that motivation, you risk only looking at the finished dish and its impact on the waistline, whilst ignoring the ingredients and the recipe. The way that we do business has to be an important part of the impact equation – and we know that consumers care about it.
Who cares about profits if the service is delivering?
This question ignores the fundamental principle that consumers are increasingly questioning the ethics of the way that service is being delivered, look at the food business – the growth of Fairtrade and other ethical Marks.
Why should it be that ‘shareholder profit margins’ are the overriding consideration in the delivery of a public sector contract to help people get into jobs? Why isn’t the public asking this question? Looking at the response to the banking crisis, I think they are beginning to.
I know that not all businesses behave in this way, but it is only by being clear about what we stand for that we can hope to benefit from our unique selling point – social enterprises are genuinely trading for people and planet and the profit that we make is for public good. The Social Enterprise Mark is the way to prove it and for the term social enterprise to mean something.
In a recent Senscot bulletin, Laurence DeMarco talks about the need for an ‘asset lock’ to ensure that a social enterprise is genuine – we agree. We require that all Mark holders have an ‘asset dissolution clause’ which ensures that on wind-up, assets cannot be redistributed for shareholder gain – this is checked annually. Over and above this we also require an ‘asset redistribution clause’ which limits the amount that shareholders can take from the business on an annual basis.
The Social Enterprise Mark is singing a constant and consistent tune in standing by its position and I know many people world-wide agree.