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British Council dumbs social enterprise down to CSR 14 February 2014

Posted by cooperatoby in Social enterprise.

Social enterprise is a great compromise, and more importantly a great synergy, between meeting social and economic goals. But there are constant attempts to tilt this balance, and vocabulary has constantly to be watched. Currently on the watchlist are ‘impact investment’ and ‘blended return’.

A dystopian vision

2020 specsLet’s examine some excerpts from the British Council’s What will social enterprise look like in Europe by 2020? (I suspect by the way the words “in Europe” were added after the fact, in order to sex it up for the Strasbourg event in January. Otherwise the document reflects the very Londonocentric agenda.)

“By 2020 almost all charities and associations will be somewhere on the ‘social enterprise spectrum’ – generating some if not all of their income through trading activities…. More and more private sector businesses will have to demonstrate their social credentials, and many of them will be better at this than traditional social enterprises…. Many private businesses will fall within the broad definition of social enterprise by 2020 – delivering increasing social value and reinvesting some of their profits for social purpose.

“Competitive tendering will force down the wages and employment conditions of employees. For many people, social enterprise will come to mean the privatisation of public services by the backdoor.

“Governments, funders and investors will move away from defining social enterprise according to legal structures and instead start to categorise organisations according to their ability to deliver a social return on their investments.

“Traditional social enterprises will no longer be able to claim they are better than private or public sector organisations just because of their business model or legal structure…. Long-standing programmes delivered by public, private, and social economy organisations will close as new models are able to demonstrate far greater social value.

“2020 will see governments start to invest less money in social programmes, increasingly only paying for results that can be proven to save the government money. Large new sources of social finance will bring greater competition from the corporate sector which has greater resources to invest in impact measurement and reporting than the traditional social enterprise sector.

“All organisations, whatever their ownership model, will be judged on a spectrum of social impact.”

Social enterprises must be community-owned

I think this shows we’re talking about nothing more than CSR (corporate social responsibility) here. I think this vision, by ignoring the community base and independence of financial interests that is social enterprise’s distinctive feature and strength, just mainstreamed itself out of the social enterprise spectrum.

A businesslike approach is all well and good, where that means effective management. But giving up control to financers is another kettle of fish entirely. And that’s what underlies the flag-waving to shift finance for meeting social need into the private sector.

The thing that stands out is that the vision totally marginalises the role of participation and popular movements. It posits that social progress stems out of collaboration rather than opposition. It presages a sell-out to capital.

It divorces ends and means, and assumes that an organisation has ‘outputs’ – ‘social benefits’ – irrespective of the way it is owned and managed. But participative, democratic ownership IS precisely one of those social benefits! The ability of people to determine their own conditions and futures is a major component of welfare and happiness. By contrast the vision is of a model where social enterprises do things TO people rather than by and with people – which is surely the opposite of what ‘big society’ participative democracy is about.

The vision’s talk of organisational form being irrelevant is a red herring. It most certainly is important that stakeholders are empowered in social enterprises – that’s their unique selling proposition – that they serve people’s needs by giving them the ownership and decision-making power. The tried and tested principles of the social economy are the only hope we have of slowing the concentration of wealth which we are currently seeing. It’s profoundly shocking that 85 individuals possess as much wealth as half the world’s population (Crédit Suisse/Oxfam). It is the only way to establish social enterprises that are sustainable and don’t degenerate as they are taken over and consolidated by a handful of multinational corporations.

Weasel words

That’s why impact investment and blended return are weasel words. They conceal the drive of big capital to extend its ownership and control into the area of social services. Read ‘financialisation’. By engineering the financial crisis, capital has stripped governments of their ability to raise revenue to provide social services. It now proposes, through mechanisms like social impact bonds, to come in and finance such services so that it can cream off profits in this area too. We have seen how effectively the banking industry has performed in the housing market! We shouldn’t let this spread. The EU’s Social Business Initiative has so far succeeded in straddling this uneasy dilemma. It must not drop its attention to stakeholder involvement.


I should be fair to the authors of the vision, Richard Catherall and Mark Richardson, because they have identified this and other issues in the discussion that follows the vision. They have succeeded in being provocative, and have done a useful job in crystallising some important issues.

See also: the conclusion of Les Huckfield’s post 2015 – a year for killing social enterprise, coops and mutuals


1. leeinroyston - 16 February 2014

Excellent contribution to the interminable debate around defining social enterprise. The old adage that the means are as important as the ends is as important now as ever.

2. Rylan Peery - 15 February 2014

Great points. It feels worth mentioning a particular organization form that is relevant to your remarks: cooperatives!

At CoLab Coop we are focusing both on the impact side of social enterprise by providing business strategy and IT support to social enterprises while delivering those consulting services via a cooperative vehicle.

I have to agree that it is precisely the collaborative / democratic participative process that makes our work special and which is the foundation of our unique culture in relation to some more traditional social enterprises.

Say hi at http://colab.coop if you are interesting chatting more!

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