Tag Archives: directory of Social Enterprise Mark holders

Walking the talk?

footprints

When you buy an item of wooden furniture, do you check it’s made from certified sustainable timber? Do you seek assurance from your plumber that he’s qualified to repair your leaky tap? Accreditation in one form or another forms a major part of our daily lives. As these two examples show, they can also serve quite different purposes.

In one, you want to eat at your new dining room table with a clear conscience knowing you’ve not destroyed the planet in the process. In the latter, you want to avoid a flood in your bathroom by employing someone who knows how to fix things. What links both examples is third party endorsement that the product or service you need has been independently validated by a trusted source as a legitimate match.

But in our world, where doing good is your raison d’etre , how do your buyers know you’re walking the talk?  Since the pilot Social Enterprise Mark in 2007 and the full launch in 2010, we have learned an incredible amount, not least from the labelling world.  Learning from experiences in Fairtrade and the food world has really helped us focus on what’s actually important – that’s the certification process and remaining true to it.  We have not been diverted by other marks or badges.  In many ways the social enterprise world has created great confusion with a plethora of similar sounding terms leaving people baffled, unsure and talking at cross purposes (particularly if you are trying to set one up!).

We created the Social Enterprise Mark to reduce confusion – it is the short-cut to recognising genuine social enterprises. The Mark acts to simplify and bring people together through their shared social values and common business approach.

We arrived at the criteria by working and consulting the social enterprise world and we have consistently applied the Mark with the support of our Certification Panel, who take their job extremely seriously and were specially selected for their expertise.  The Panel are key to maintaining our integrity – they are separate and help guide us through complex applications and compliance issue.  They apply their considerable knowledge and learning from the past 5 years, which is stored in our Certification Manual, the tool for consistency in new applications and renewals. To quote one of our Mark holders, Plymouth University’s pro-vice chancellor Julian Beer “As the social enterprise sector expands and opportunities for fake social enterprises increase, the Social Enterprise Mark is crucial in recognising genuine social enterprises. Only by meeting robust criteria, overseen by the independent Certification Panel, do social enterprises attain certification.”

I would like to make clear that, where an organisation has failed to meet these standards and criteria, we have removed their licence (we are not a membership organisation).  Where businesses do not qualify we tell them and offer guidance in how they can change how they operate. Some do and others don’t. That’s fine by us. By putting a marker in the sand we’re giving people a choice and clear position on which to make decisions, whether as a prospective Mark holder or a buyer of goods or services.

This is fundamental to our existence and it’s for this reason we do not believe in self-assessment.  Of course offering such clarity does cost money.  There are plenty of good businesses out there doing good work, but they are not social enterprises and will never get the Social Enterprise Mark.  This point is key because shareholder profit motives leads to behaviours associated with this structure, ie making money for shareholders takes precedence over ethical issues if you have to make a return to investors (look at the concern about the ownership of the Co-operative Bank).

Dr Mark Reynolds of Integrated Care 24 explains it well:
“Operating as a certified social enterprise means the ethos of the organisation is confirmed as “for patients, not for profit” with any surplus being applied to service development, and so to public benefit, rather than to private profit.  The Mark helps us prove our social enterprise values and purpose in delivering the best possible care, within very tight resources, to our patients.”

Health is just one of those sectors undergoing massive change at the minute and where the term social enterprise can mean many different things. Having one Mark helps to make it easier and more credible when you need to stand up and be counted.

We’ve just published our Annual Review which shows our certified social enterprises contribute £5.4 billion to the economy.  These certified social enterprises use the Mark to differentiate themselves from their competitors. Hence the Mark is revered as the only authority for independent validation of a company’s social enterprise credentials, which explains our high levels of customer loyalty.

Our Mark holders are using their Social Enterprise Mark to foster change, embedding the Mark at the very heart of their organisations. It is being used by newly formed health social enterprises to enable culture change internally and externally to instil trust and confidence with patients, staff and communities.

For the education sector, it’s a similar story: the Mark helps to create a culture and ethos of social enterprise in students and staff, as well as supporting the development of social enterprise in the local community.

We have exciting growth plans for the future, building on our work which demonstrates the best of social enterprise, not just talking, but walking the social enterprise talk.

social enterprise mark

How many ‘lords a leaping’?

'Lords a leaping'

Source: Wikipedia, The Twelve Days of Christmas song

I hadn’t noticed before, but there are any number of ‘lords a leaping’ in the well-known Christmas song, the Twelve days of Christmas – anything from 10 to 12, in fact! (Source: Wikipedia, Twelve Days of Christmas)

I wonder how many lords are ‘a leaping’ today, following the Chancellor’s Autumn Statement yesterday?  I’m sure there are not that many social enterprises ‘a leaping’, that’s for sure!

As you may know, I was a member of the working group that consulted on the Social Investment Tax Relief (SITR) that was highlighted in the Autumn Statement yesterday.  The outcome is disappointing at best.

Despite pointing out a clear solution to HM Treasury, in the form of the Social Enterprise Mark criteria to identify social enterprises, the Treasury have limited the impact of SITR to a small set of legal structures, where few organisations will benefit.

I’m clearly concerned that around 30% of Mark holders are potentially excluded from being eligible.  However, if this is the chosen method of applying social investment, we have yet to see if it will really address the resource needs of Mark holders anyway.

The Government  will publish its response to the consultation alongside draft legislation next week and I’ll be attending the next HM Treasury consultation in January, but I don’t expect to see a u-turn.

I doubt you’ll see ‘1 Lucy leaping’, thats for certain!

Are you being served?

http://www.google.co.uk/imgres?imgurl=http://3.bp.blogspot.com/-R7OG8S2qMec/TxmB7iO99rI/AAAAAAAAQJk/KjKLanKOMC0/s640/Mollie_Sugden_as_Mrs_Slocombe.jpg&imgrefurl=http://www.chainsawsandjelly.com/2012/01/creepy-girl-mrs-slocombe.html&h=364&w=500&sz=28&tbnid=1VVIYGboskBInM:&tbnh=94&tbnw=129&zoom=1&usg=__LALfeSlJm07rnJAtq0sliPJVkpo=&docid=fPnWMPflFnNKXM&sa=X&ei=2efwUcmdJ-Sa0QXr0oGABw&ved=0CDwQ9QEwAQ
The recent state of social enterprise research, by SEUK, The People’s Business has reported that more than ever social enterprises are needing appropriate investment ‘Twice as many social enterprises (48%) as SMEs sought finance in the past 12 months and 39% cited access to finance as the single largest barrier to their growth and sustainability – the most common barrier experienced.’

This mirrors the findings of our work with Social Enterprise Mark holders who cannot access the right resource level for their growth – ‘The median amount of finance sought by social enterprise was £58,000’ – below the minimum thresholds of many specialist social investment vehicles. This supports other research identifying the need for smaller-scale, patient, risky and unsecured lending for social enterprises. David Floyd in ‘That Shrinking Feeling’ provides good commentary on this issue, although he argues that what social enterprises need most is more customers, but I would say it’s chicken and egg, without investment a social enterprise can’t grow to reach its full potential and access new customers.

At last the penny is dropping that social enterprises cannot access the finance they need through social investment channels – but where are the solutions? Indeed, small scale lending where it does exist, is so risky that it has to be backed up by very high interest rates to justify that risk, which puts social enterprises at a double disadvantage – not only do they have to demonstrate social impact, but also, this is not taken into account on the bottom line by the social investment sector, which in turn charges high interest rates to make its own business model work. The social enterprises then become financially uncompetitive with the private sector which can access cheaper equity and do not have to demonstrate social value. This unlevel playing field and to represent certified social enterprises are two of the factors that led me to volunteer for the HM Treasury Working Group on tax relief for social investment in social enterprise and the argument that I put forward for lower than commercial rate of return for investors. I urge all social enterprises to respond to the consultation and share responses with me.

Another investment channel is the banks. The ‘Banks and social enterprise’ article by Claudia Cahalane shows how much banks are courting social enterprises for current accounts but the unsecured lending offers are very thin on the ground. Why is it not possible to look at some kind of blended product from the banks? I know that there are banking rules that have become more onerous, but why can’t banks’ CSR programmes look at working with others to develop a CSR stream that provides such patient capital which does take into account social value and mission? We seem to be looking into a very small box with everyone saying why it can’t be done. Could this be a great publicity opportunity and chance for the banks to put their house in order and demonstrate their social credentials?

Meanwhile the social enterprises will struggle on with no investment and certainly no grants (now a dirty word). The upshot, as David Floyd says, is that we may not be shrinking in numbers, but we are shrinking in size (turnover). Isn’t it time to do some re-thinking? Who will dare to take this challenge on?

Tax relief and social investment – the golden egg?

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“Social enterprises play an important role in growing the economy, reforming public services and promoting social justice. The Government will introduce a new tax relief to encourage private investment in social enterprise. The tax relief will complement the Government’s other recent measures to help social enterprises access the capital they need, such as the launch in 2012 of Big Society Capital. The Government will consult formally on the details of the relief by summer 2013 and the relief will be introduced in Finance Bill 2014.”

An excerpt from the HM Treasury, Budget 2013.

Last week’s budget speech was regarded as a welcome boost to the sector, for many have been lobbying for tax breaks for a long time. As the only UK body to independently certify social enterprise, the Social Enterprise Mark Company generally welcomes anything that helps companies increase their investment potential in this exciting and innovative sector.

However, we would also caution that social investment should not come at the expense of a degradation of social mission because this is a central plank of any genuine social enterprise. The social mission at the heart of these businesses gives import to the asset lock which limits the amount of profits and assets that shareholders (if there are any) can take out of a business (see my January blog post on definitions). The asset lock is there to protect the very values and mission which make social enterprise different from other businesses.
The question, therefore, is not so much about how we attract individuals and organisations to invest in social enterprise (by this I mean equity), but more about how we attract the right investment into social enterprise that builds and enhances social mission. This is what will boost the real needs of the sector and most importantly its customers. Currently the debate is more focused on what the investor wants than the demand from social enterprises, hence the pressures to dilute the asset lock and open social investment up to the wider ethical business world, as outlined in Civil Society.

Social enterprises need a whole range of products that take into account the long and difficult game that they are applying their business model to. Very often, when it comes to investment they have had to come up with a raft of different solutions and be incredibly creative in order to meet their social mission. As we know those options are becoming increasingly limited, further exacerbated by the risk aversion of the banks and the still limited breaks being given to SMEs, which by far form the largest group of businesses certified with the Social Enterprise Mark (Mark holders).

Hence, the ideal scenario for Social Investment Tax Relief would be that the principle of social mission is at its core, rather than fixating on a prescribed investor model, which has yet to be proved. Tax relief is a good incentive and the government should let the genuine social enterprise market work out how to best apply it to increase their own social value.

So let’s stop talking about getting investment ready and instead think about getting investors in all their shapes and forms ready for the challenge ahead – offering opportunities for social enterprises to join up the products and fill the gaps.

50 in 250 campaign launches…..

Today we launched our first campaign in the City of London – it seems to have hit the Mark, if you’ll indulge the pun.  Mark holders from all over, came to tout their wares to City businesses – and there were some big name city businesses there, as well as being high in number.  KPMG and Wates Group both talked with passion about why they thought that Social Enterprise Mark holders can make a difference in their supply chains along with strong support from the City of London Corporation.  There was also strong interest in understanding the criteria and rigorous assessment process from City businesses – to remove the risk of engaging with organisations masquerading as social enterprises.  This all  goes to prove there is a definite need for certification which is robust and actually means something.

Chris White MP gave a barnstorming address – not something you often associate with a back-bencher, but his words were inspiring and really set the global context that we now find ourselves in.  Crucially, he linked the Mark to the paradigm shift of the changing business world and demonstrated his strong support.

The dialogue between social enterprises was firmly one of business – I don’t think you would have seen that a couple of years ago nor would you have seen such numbers.  Questions ranged from issues of quality and price to top tips.  My top tip for corporates is to start small and develop the relationship – business relationships in my experience  are fundamentally about trust and ability to deliver what you say you will.

I have to say, being a supporter of the Occupy movement, I was slightly worried about how all this might go down – might we have been better going out to join the protesters?  I discussed this dilemma with some friends (who know nothing about what I do or about social enterprise) over the weekend .  Interestingly, they had been in London and talked to the protesters and their independent conclusion was that they had sympathy for the messages but where were the solutions?  I felt really proud to say that we were in the thick of it; helping to provide some solutions and the means to action them!

It was an inspirational and rewarding event, with some new definite supplier relationships underway. Thanks to all those supporting it including Sensevents, Cafe Sunlight, City of London Corporation. We look forward to meeting many more Mark holders and businesses around the country as the campaign grows.

For more information on the campaign see www.50in250.org.

Angels dancing on the head of a pin?

There is a medieval legend that religious scholars spent time and effort debating how many angels could fit on the head of a pin. Whether it is true or not, it has become a saying that illustrates the futile nature of some debates.

It’s an analogy I would draw when the circular debates start on the definition of the term social enterprise – it takes a lot of time and energy for no particular useful purpose.  I’m afraid that these types of discussions do not unify but serve a wider divisive purpose which marginalises and ensures that social enterprise will remain ‘an extra’ rather than having a ‘starring role’ in the future of the business world.

Pin dancers seem to have disproportionately loud and occasionally abusive voices and they marginalise the majority who choose not to engage in futility, rudeness and negativity but rather continue spending their time making a difference to others’ lives.   I know which one I would opt for any day.

There is a time for criticism, but I would always qualify that with the requirement to be constructive and explore ways forward.  I held a discussion at an academic conference last week about the Social Enterprise Mark and the vexatious issue of definition came up.  For me, these debates will carry on and we will listen and work with partners to try to address legitimate concerns – we have always said that the criteria are not set in stone.  I would also point out that we have consulted extensively in the development of the criteria over the years – but we can’t please everyone.  In addition, there will always be work that is underway, that we are not ready to talk about publicly; as I hinted at the conference, we are currently in discussions with trades unions and co-operative representatives.

Most importantly, engaging in the public domain about these debates means we are in danger of losing the plot and turning off potential converts to social enterprise in general.  The aim of the Mark was never to provide a ‘catch all’ or an exclusive club, but to enable the sector to come together, to promote itself more effectively to the outside world, in a way that is simple and uncomplicated.  By using a consistent message with a unique selling proposition, the term social enterprise can be understood by many more people. Already, there are almost 450 Mark holders integrating the Mark into their marketing strategies and in turn reaching thousands of their own stakeholders – all learning what’s different about social enterprise.

Anyone who has constructive suggestions about further criteria development, wanting to work in a co-operative and collaborative way, please get in touch: media@socialenterprisemark.org.uk

Supply chains must be challenged

Further to a recent debate on the Guardian’s social enterprise network, focussing on ways social enterprises could engage with big business, I believe its time social enterprises engage more actively with large corporations and other businesses to increase their impact and financial sustainability, moving on from the traditional corporate social responsibility (CSR) agenda.

Over the past decade or so social enterprises have been encouraged to build their businesses in order to deliver government policy, through public sector procurement and other ways.  Government strategies focused on this and the sector largely followed on.  In fact, the sector was encouraged to take ownership under the last government, and sometimes it became difficult to distinguish government policy from our own growth and sustainability strategies  – probably further exacerbated by the funding streams available centrally and regionally.

I’m not saying that all of this was bad, but it made us complacent.  I remember at the time, my friend Nigel Kershaw from the Big Issue saying, ‘What about social enterprises which operate in the open market?  Where are they in these discussions and policies?’   He pointed out that the Big Issue was borne out of a recession and had learned lessons about how to survive.

In these times of austerity, we still seem to be clinging to the same hopes that we had about turning towards government for answers.

These hopes are likely to be dashed.

We need to think much more independently of government; to promote the benefits of buying from a social enterprise; to be much more forthright and clear in our efforts  to achieve this.

In discussions with Social Enterprise Mark holders, there is a sense of frustration that much publicised support from both government and the wider private sector is just rhetoric.

We need to start to hold them to account in the ways that they too do business.  Supply chains must be challenged.  If business and government really believe in social enterprise, why aren’t they buying from them more widely? I’m not just talking about the delivery of public services – what about catering, events management, HR advice, marketing – the list is endless.

Social enterprises, of course, struggle with the procurement processes of both government and business – which often favour the big ‘standardised’ product.  But as a colleague pointed out, although it might be more complicated for the buyer, the rewards are greater AND benefits  society and the environment (… trading for people and planet).  Buying from social enterprises has the benefits of using resources efficiently to add value to the product or service and in addition, provides an alternative model for CSR.  The Social Enterprise Mark guarantees this;  therefore making  a compelling case to buy from Social Enterprise Mark holders.

Just check out the directory of Mark holders – they are a comprehensive and ready source of genuine social enterprises that can prove it!

Useful links

http://www.guardian.co.uk/social-enterprise-network/2011/jun/27/corporate-social-responsibility-and-social-enterprises-live-discussion?INTCMP=SRCH

http://www.socialenterpriselive.com/your-blogs/item/why-csr-why-now