David Floyd’s reaction to Gina Miller’s article in the Guardian
Well, I agree with the headline. Social investment is currently held up – primarily by politicians and people working in social investment – as one of the major answers to the economic challenges the social sectors currently face.
When discussing it in private, no one I’ve met in social enterprise believes this to be true or can even offer a sensible hypothesis as to why it could turn out to be true – at least in terms of the kind of near market rate return social investment offered by Big Social Capital.
That said, I think there’s a lot in the piece that’s wrong.
It’s fair enough to make money through an honourable approach to conventional business and then spend some of it on good causes but achieving social good directly through business (and/or the way a business is run) is something different.
A co-operative supermarket has a different effect on the social situation in the overall economy than a supermarket run by rich bloke who gives lots of the profit to charity.
A sustainable business that provides work for unemployed people has a different impact to a project funded by donations that gives unemployed people something to do.
We do need to find ways to fund the start-up and growth of businesslike social ventures. The problem is that the current social investment sector is focused on solving political problems not business problems.
Politicians needed (and still pine for) an answer to the question ‘how can we provide public services without spending money (upfront)?’ and funding has been available to develop approaches to social investment that (if they worked) would help to tackle that question.
They weren’t a very good set of ideas before the government’s money ran out – and the notion of the state as the ultimate customer to repay most of these investments disappeared – but now they’re an absurd set of ideas.
That’s not to say that it wouldn’t be possible to have a social investment sector that started from the question ‘how do we help social ventures to get started and grow?’. It is possible and it would be a really good idea to stop the current bullsh!t and have a go.