Background paper: Identity and Visibility

Background paper: Identity and Visibility
Roger Spear, CRU, Open University
October 2014

The three case studies: relevance to policy and practices

The three cases studies link with the above thematic approach, and provide useful empirical evidence to address important strategic questions.


Developing appropriate legal forms: new legal structures are one important part of towards raising awareness, increasing the visibility of social enterprise.  While the cases didn’t directly relate to this point, both the Italian and the Finnish cases with strongly linked to relatively new social enterprise legislation;  thus they can be seen as complementary strategies to strengthening the visibility of those structures and hence of social enterprise.  There is a strong focus in the cases on WISEs, the most prominent form of social enterprise in Europe at the moment.
Strengthening the evidence base through research: this is a prominent theme in policies for strengthening the ecosystem of social enterprise, but it is a theme that is not always well linked to the needs of the sector. While this theme has not been directly addressed in the cases, the Italian Social Balance provides a rich evidence base, which as the case describes, has been used I researchers for the benefit of the sector.
Adoption of social impact measurement techniques:  social return on investment (SROI) has been a widely promoted technique, but one with drawbacks (e.g. standardisation of metrics);  as the recent GECES study notes this is an important but still developing field.  Legally required forms of socially accounting for one useful route to improving transparency and visibility;  and the extensive experience of the Italian social balance provides much to consider.
Developing quality standards and promoting brands/marks/legislation:  fair trade forms of certification provide an inspiration for social enterprise to develop relevant brands and marks;  but this is still a relatively new field for social enterprise, with practices only emerging in recent years; the Finnish case provides an interesting recent initiatives both in terms of the brand/mark identity and the promotional strategies used.
Promoting/communicating achievements:  this theme builds on the feelgood ethical dimension of doing good; it forms a part of the strategies used in all three cases. 
Building dialogue and collaborative relationships:  while promotion is informed by conventional marketingpractices relating to target groups and consumer/user segments, building dialogue and collaborative relationships is more directly linked to key stakeholders of the social enterprise and/or the ecosystem.  The potential for developing solidaristic relationships and building social capital in the social economy is very strong;  thus this is an important theme both for developing a collective identity and for strengthening visibility amongst influential stakeholders.  The Italian Social Balance provides interesting experience on building dialogue with workers and users; the French case is clearly about strengthen relationships between procurement organisations and WISEs; and the Finnish case Y more clearly drawing on marketing and branding strategies, also includes the development of stakeholder relations.
Networking with stakeholders: web based strategies and social media has increased the importance of this theme and the French case study develops a sophisticated approach in this area.


Summary of main points from the cases


The three cases of good practice are presented as a basis for discussion and learning in this cluster peer review:
·         The Finnish Social Enterprise Mark
·         Social Balance in Italy
·         Socialement-Responsible.Org: Tool for visibility of WISE


The Finnish Social Enterprise Mark


A high level working group of the Finnish Ministry Of Employment and Economy (the MEE), was set up to develop strategies and policies for social enterprise. One of its proposals was the Social Enterprise Mark (the Mark), and this was launched in December 2011.  There is no link with ESF funds, the Mark is supported through its own income and funding (€70,000 in 2014) from MEE to support marketing and strengthening of the brand.  The objectives are: establishing a recognised brand giving added value, associated with the values of the social enterprise – thereby increasing recognition and the valuing of social enterprises; and promoting the Mark to increase the visibility of the sector. 


There are three primary criteria for awarding the Mark:
·         primary purpose is to promote public good, and act responsibly (specified in the articles of association)
·         limited distribution of profits (more than 50% for social benefit)
·         transparency and openness of business operations;
In addition to being required to join the Association for Finnish Work which administers the Mark, there are secondary objectives:
·         promoting the well-being of employees, and their voice in the organisation;
·         special concern towards vulnerable groups
·         demonstrate the social impact of the enterprise (including by reporting to the Association annually how it has fulfilled the primary criteria).


The diamond integrates these criteria visually:
Note that the Mark is available to all legal forms, and the majority using it are companies limited by shares (34). Only about 49 enterprises have been granted the Mark (September 2014), and there is clearly a desire to establish good standards for the Mark, since 50% of applicants have been rejected.  The cost of the Mark is based on turnover e.g. 678 Euro for 1 million Euro turnover.
For the social enterprise, the Mark provides reliable information to customers and other stakeholders about the social goals of the social enterprise, and its use of most of its profits for social good confirms this. Thus it opens the possibilities of more ethical/social choices by consumers; it facilitates cooperation and networking; and it opens the possibilities of ethical/social investment by potential investors.
The Mark is administered by the Association for Finnish Work (the Association); which has a broader mission to governs symbols and online services working to promote Finnish work, including for Finnish origin goods, and for Finnish designs.  An expert committee comprising relevant stakeholders meets regularly to assess applicants for the Mark. 


The Association promotes the mark through wide range of marketing activities to the public, social enterprise, its members (2500).  However there are a number of challenges faced including: it is not widely known in Finland (only 5% of consumers recognise it), many possible applicants do not apply, those that have the Mark do not use it actively – thus the Mark has not yet developed into a well-known brand. On the other hand most users of the Mark have received positive feedback from customers and stakeholders.  As with fair trade systems of certification, the Mark certifies the social dimension of a product or service, rather than more conventional dimensions of quality.  Also, while there is a huge amount of successful experience with ethical marks/branding, such as fair trade coffee and clothing, divine chocolate Green and Blacks, Ben and Jerry’s, Aveda, et cetera, most of this has had a narrow focus on similar products/services which greatly simplifies the marketing challenges.


A new sector body representing social enterprise has just been set up, and this organisation will undoubtedly address issues of visibility as well. 


Finland also has another related brand: the Green Butterfly Mark for registered work integration social enterprise.  Any legal form of registered trading businesses can be registered as WISE if at least 30% of employees are disabled or previously long-term unemployed, and they meet the criteria of the social enterprise Mark (administered by MEE).  They should also comply with collective bargaining agreements or pay a normal/fair salary.  The majority (69) of the 89 registered WISE were private business legal forms.  This WISE Mark has also not proved to be particularly popular.  The Finnish approach to social enterprise emphasises business rather than community aspects, and a report (ESF funded project) has recommended various measures to improve the ecosystem for developing WISE.


Social Balance in Italy


The social balance in Italy is a system of accounting and reporting which has developed over a number of years. It has legislative backing for social enterprise registered under the 2006 law in Italy – a qualification law which is open to private sector as well as third sector legal structures, but they have to comply with the social and economic constraints specified in the law.  And in the Lombardy region a more highly developed form of social balance is developed, and is available (although not obligatory, until recently?) for social co-operatives; but as in other parts of Italy many social cooperatives voluntarily adopt this practice.
There are guidelines, which have been established nationally; and it is designed to present a more holistic view of the social and economic dimensions of the performance of the social enterprise. As such it covers a very comprehensive set of information about the organisation, structured in five sections: general information (institutional members and organisational characteristics), structure, governance and administration (including structure and control system, legal form, participation,  composition of the workforce and their characteristics), aims and activities (aims, strategies, activities, outcomes), financial situation and analysis, and additional information about the wider impact on stakeholders, the community and the environment.  The requirements for the social balance in Lombardy are more developed, and cover eight sections: introduction (objectives of the social balance beneficiaries, methodology), general information (social purpose, members, board, shareholding), mission (values, objectives and policies), governance, stakeholders (internal/external, and method of participation), social report (workers, beneficiaries, activities, relations with the territory), financial situation, and vision.
This Italian social balance is not subsidised by the state, but appears self-sustaining either due to attracting additional resources (donations and voluntary work), or due to the value added in terms of trust and visibility.  This view is borne out by the fact that in a survey of social enterprise, 73% carried out a social balance, even though they were not legally obliged to.
In terms of stakeholder involvement, it is clear that workers are seen as the key stakeholders, and most social enterprise disseminate the social balance reports to their workers.  While users are consulted and involved to a much lesser degree, and few of them are sent the social balance report.  Nonetheless stakeholder engagement with users and the community is substantial with regard to pay differentiated of free services, awareness campaigns, educational and cultural activities.  And Italian copies banks also find the social balance a useful instrument for informing them about social aims and outcomes.
Although the Italian social balance is an impressive and comprehensive instrument, as indicated above, it can lead to a rather bureaucratic process of drawing out the added social value of social enterprise, and it may require significant resources and expert professionals to produce it. 


This seems like an important contribution to the field of social accounting and social reporting, building on developments in social metrics, and in techniques like SROI.  It helps create the evidence base necessary for demonstrating the social value added of social enterprise, but it still leaves a broader strategy of raising visibility and creating awareness down to the initiatives of individual social enterprise. 


Socialement-Responsible.Org: Tool for visibility of WISE


This instrument was developed by Avise, an organisation developed by social economy actors to promote social enterprise which support employment and social innovation.  A central concern was how to make public procurement more socially responsible, particularly towards work integration social enterprise; and possibly through the use of social clauses. 
This initiative focused on making the supply side more visible to procurement organisations through web based systems i.e. ensuring that the potential of WISEs is made more visible to procurement contractors.  This addressed a major lack of knowledge of public procurement organisations about the potential of WISEs, and the difficulties identifying them.  The approach adopted was largely through the development of a highly sophisticated web platform to incorporate feedback and best practices. Avise developed this and a number of complementary strategies to act as an intermediary between supply by WISEs and demand from the public sector.  A recent development of this approach has been through localisation of this national online tool, to provide regional and local directories of work integration suppliers (with 11 web platforms). 
Over a number of ESF and other projects, Avise has established itself as a national intermediary organisation, essentially facilitating the procurement market for work integration – and the creation of a socially responsible procurement network, which goes a step further in building capabilities and developing good practices of WISEs.
Evidence for the effectiveness of these complementary measures can be seen in the increased level of procurement for WISEs, and in the greater use of social clauses.  The outcome is more than a website, it has improved the ecosystem through improved stakeholder relationships and stronger partnerships.  The weaknesses are variations between regions, and difficulties ensuring that the WISEs contribute effectively to the web information system.  Comparisons with similar measures in other countries indicate the value of directly supporting public procurement agents in these new markets for work integration.  Examples from other countries include “Just Buy”, a website set up by Social Firms UK (, and the recently launched Social Enterprise UK campaign website for buying social, and its online directory of social enterprise:


Comparisons between the three cases:


The Finnish Social Enterprise Mark is a relatively recent innovation (2011).  Interestingly it is managed by an organisation not closely linked to the social enterprise sector, but one that has extensive expertise in managing brands and symbols, and with funds to promote/market the Mark.  And the diamond provides a clear expression of the core and wider senses of identity.  And a wide range of marketing and networking strategies have been adopted.  The formation of a new representative body for social enterprise in Finland (Arvo Association) may lead to more focus in addressing the challenges of gaining more members and greater visibility.  The co-existence of two brands for social enterprise in Finland is interesting – the circular spokes for all social enterprise, and the green butterfly for WISEs.  On the one hand it differentiates the field of WISE from other social enterprise, and on the other hand it raises issues of marketing.


Social Balance in Italy: The two models of social balance in Italy seem to represent one of the most highly developed forms of social accounting and reporting available.  It raises the bar for developing transparent social accounting.  There may be questions about how resource intensive and bureaucratic it is, but it clearly provides an extensive experience, which others can draw on to develop the necessary expertise, procedures, and methodologies to develop similar forms of social accounting.  It is interesting how the social balance is used differently with different stakeholders – workers being more greatly involved, compared to users (which may also be explained by pragmatic considerations, as well as the advantages that insiders have).  Nonetheless it appears to be a useful tool for communicating with all stakeholders – and in the process of strengthening the sense of collective identity.  It provides a rich evidence base about the social and economic performance of social enterprise; this is a strength, that it requires further analysis to draw out the main points for communication with different stakeholders; and the may be further steps needed to turn this useful information into bullet points for marketing and promotion.


Socialement-Responsible.Org: Tool for visibility of WISEs: this focused strategy on WISEs and the procurement market has been conducted by Avise, a national organisation for promoting social enterprise and social innovation.  Initially the strategy was developing a website accessible by public procurement organisations as well as WISEs; but the strategy has grown to be more than a website, with Avise acting as an important intermediary body both in making procurement markets more accessible, and developing WISEs capabilities to access them. And developments connecting the local/regional and the national have proved worthwhile. It has tended to concentrate on improving the market through improved understandings and better information; although a degree of mutual learning and capacity building has also taken place.  And the focus on social clauses has proved effective, although it is not clear whether deeper structural problems have been addressed (size of contracts, and need for consortia of WISEs).
To summarise: the three cases represent different and complementary approaches to identity and visibility.  The Finnish Mark provides a useful case on branding and promotion, drawing on the -established on the expertise of a well established Finnish branding body; the Italian social balance provides a useful case for strengthening the evidence base, improving transparency, and engaging the stakeholders; while the French Socialement-Responsable case represents an interesting web based strategy for improving the procurement market for WISEs.  As such it represents a highly focused approach to improving the visibility of social enterprise, and addressing what has has generally been a weakness for many social enterprise – accessing procurement markets. 


Specification of issues for learning and discussion


Based on the cases, the main categories for learning, with issues and questions are as follows:
·         developing appropriate legal forms
New legal forms provide a starting point for identity; likewise for national definitions; but strategically do we build identity around different types of social enterprise (WISEs, etc), or around the whole sector?
·         Strengthening the evidence base through research
Much research focuses on survey and statistical data which provides an important baseline, (even if at times the findings are confusing as in the UK); but how can the evidence base be strengthened specifically for increased visibility?
·         Adoption of social impact measurement techniques
This emerging field seems to offer different approaches: social accounting techniques often using standardised metrics, and which form a regular part of annual reports; this can be contrasted with stakeholder oriented techniques like social return on investment, which are useful for strengthening relationships with key stakeholders like funders; which standardised metrics are most useful? And which approaches are currently most useful?
·         Developing quality standards and promoting brands/marks/legislation
Social brands/marks appear to have an important role to play in strengthening visibility; but how should they be administered and coordinated in relation to sector representational bodies? And how can more social enterprise be encouraged to take it up? Is it better to focus more narrowly on a type of social enterprise (WISE), or on specific products/services?
·         Promoting/communicating achievements
Which of the following strategies have people found most worthwhile: celebrities, ambassador program is, focused campaigns, educational programs, peer networking?
·         Building dialogue and collaborative relationships
Stakeholder dialogue and engagement is such a central part of building the ecosystem and supporting social enterprise; how to be strategic in this approach, differentiating between key stakeholders, and how to build different relationships?
·         Networking with stakeholders
This important and dynamically changing area can be very resource intensive – What are the lessons for effective use of web based strategies and social media?  


See here for the full paper.