Defining social enterprise

Defining social enterprise
Michael Roy, Third Force News
01.12.2011

I’m writing to say how much I enjoyed the social business special of TFN two weeks ago.

We in the Yunus Centre for Social Business and Health are keen that terms such as social business and social enterprise are being used interchangeably. Muhammad Yunus himself talks of social business, but there really is no difference in the terms, as long as we’re insisting on the ‘asset lock’ – that profits are not distributed to shareholders but are reinvested in line with their social or environmental mission/ethos.

In Andrew Jackson’s article The Grammar of Social Enterprise he – quite rightly in my opinion – talks about social enterprise/business as a verb rather than a noun. I have a great deal of sympathy with that view and my heart sinks whenever the circular arguments inevitably commence on what is, and what isn’t, a social business.
 
I am yet to find a bona fide social entrepreneur who has any kind of energy to expend on this issue: they are usually too busy getting on with doing stuff.
 
But, sinking heart or no, many of the concerns are (unfortunately) entirely legitimate.
 
Andrew’s article provides three examples of social enterprises in Scotland that I think the whole social enterprise community in Scotland would recognise as such, albeit that they have different business models.
 
Unfortunately he misses the point. There are no problems with these organisations, all of which have the sort of “asset lock” he describes earlier in his piece.
 
The problem that exercises those in the know is that there are a number of organisations that describe themselves as social enterprises but are, frankly, nothing of the sort . They do so, presumably, in order to gain some sort of traction in markets that were formerly the province of the public sector.
 
Most of these are based in England: we’re a lot more sensible up here. So it shouldn’t concern us, right? Well, unfortunately, no. What happens in Whitehall does – and should – exercise us to a large degree.
 
This particular question potentially could have been sorted in the Social Value and Public Services Bill currently making its way through the UK Parliament but the emphasis upon social enterprise was watered down and this requirement recently dropped from the Bill, with the view that coming up with a definition was too difficult! Of course it was nothing to do with the fact that certain so-called social enterprises favoured by the coalition government might have had to find a different label for themselves and potentially could have pricked some of the Big Society rhetoric.

Michael Roy
Yunus Centre for Social Business & Health Institutes for Applied Health Research and Society & Social Justice Research