Social business: How to build a better future

Social business: How to build a better future
Martin Clark, The Guardian

Can social enterprises respond to the current global crisis and pave the way to a better future? The answer is emphatically yes. Whether rebuilding the financial system, the critically interlinked housing supply, transforming public services or helping the casualties of recession, social entrepreneurs are at the cutting edge.

They operate in every sphere imaginable: social businesses, the NHS and social care, waste and recycling, citizen organisations, charities, on TV, inside corporates, environmental action groups, and in schools, colleges, and communities.

Some are already established as global figures, such as Nobel prizewinner Muhammad Yunus, founder of the Grameen Bank in Bangladesh, a bank which – unlike most mainstream financial institutions – currently lends more than before the credit crunch, had almost no drop in loan repayments, never lends more than its deposits, and continues to build membership and branch numbers.

But a new generation of social entrepreneurs are already among us waiting to be uncovered and nurtured. The world’s greatest future social entrepreneurs may be in your local school – or on that computer game in your living room. Social enterprise is now in the school curriculum, and there is plenty of evidence that young people are absorbing its key messages. ‘You don’t need to ask young people to choose at a fork in the road to either make money or do good’, says Oli Barrett whose project, Make Your Mark with a Tenner, gives money to young people to multiply for social benefit.

Tom Savage, who had started social enterprises in environmental tourism and conservation by his mid-twenties, agrees: ‘In future a millionaire will not just be someone who has made a million pounds but also someone who has helped change a million lives.’

Social entrepreneurs are carving out niches in public services. Researching my book The Social Entrepreneur Revolution, I came across Norma Redfearn, a socially entrepreneurial head teacher. Working within – sometimes despite – her local authority, Redfearn made her west Newcastle primary school a social enterprise laboratory addressing the root problems of pupil attainment. Simple but effective initiatives such as a breakfast club and parents’ literacy classes served as a catalyst for the redevelopment of the local housing estate and play facilities. When I asked her what makes her a social entrepreneur, she says not taking no for an answer, and always finding a way through.

In social care, I came across Craig Dearden-Phillips, who built Speaking Up from a tiny Cambridge charity responding to the support needs of people with learning disabilities, into a celebrated national social enterprise in public service delivery. Expanding the business, he told me, was only possible because he had learned to become entrepreneurial to pursue his social mission.

How such public services are commissioned is a key battleground for the revolution and a major influence on the expansion of social enterprises to deliver health care, education and transport. With social benefit now a legitimate contract consideration, the challenge for service commissioners is to join the revolution by growing the social enterprise sector’s involvement in service delivery – and getting more bang for their buck.

As government grapples with rebuilding the banking system, it should look to the UK’s growing network of community finance initiatives, which are already seeking sustainability with embedded social purpose. It could take lessons from socially entrepreneurial banker Malcolm Hayday, who created Charity Bank to lend to charitable and community projects. Or Faisal Rahman’s Fair Finance in east London, which adapts Yunus’s microfinance model to our own streets, battling the loan sharks.

Citylife, the social enterprise I work for, is developing a national system of charitable bonds, to enable people to invest in their local communities or the causes they care about – including social housing and the incubation of social enterprises.

We share the same dream: a culture change where social investment becomes the norm. Beyond ethical investment, it targets activities that make society better: community facilities, jobs, business start-ups, social enterprises, local transport, green energy. And it’s beyond traditional charity, because you get your money back.

Yunus is inspiring because he transports you to another world, where social businesses are the norm – and where, by implication, what you might call ‘anti-social’ businesses have become the exception. His range of Grameen companies showcase an alternative social economy, in healthcare, telecoms and, recently, in a partnership with dairy products company Danone to produce vitamin-fortified yoghurt. Under the terms of the agreement, Danone can recover its capital investment but no profit; in return it gets market penetration and credibility – high quality PR. Social impact can be a key brand value, a differentiator in the marketplace. This is ‘real’ corporate social responsibility integrated into the fabric of the business.

Social entrepreneurs are learning from business, but have much to offer it in terms of leadership, innovation and achieving more with less. This is the ‘business revolution’ we need, where social enterprise becomes the business model of the future, blending profit and social benefit. What barriers stand in the way? Recession will increase levels of need in the communities many social enterprises serve, but reduce the resources available to respond. Awareness of social enterprise remains low. And in a downturn it’s harder to run a double or triple bottom line business.

The challenge is to create what writer and thinker Charlie Leadbeater calls social entrepreneurship as a mass activity, practised in many settings. Everyone can be more socially entrepreneurial in some way.

Should you ditch your job for a romantic future as a struggling social entrepreneur? Not necessarily. It’s more a state of mind, behaving differently where you are. Would your employer let you develop an innovative ‘integrated corporate social responsibility’ project? Try voluntary work, part-time work in a social enterprise or join its board. The revolution has started, but these challenging times will prove whether social enterprises have the creativity to provide real solutions. If social entrepreneurs are worth their salt, this is their moment.

The Social Entrepreneur Revolution: Doing Good by Making Money, Making Money by Doing Good by Martin Clark is published by Marshall Cavendish. To order a copy for pounds 13.99 go to