Social enterprise: next step forward
Radical Economics magazine
When the buzz wears off, social enterprise needs to prove its mettle, says Lisa Sanfilippo.
Social enterprise has built up a bit of a ‘buzz’ in recent years.
These value-driven organisations that work through the market to achieve social aims, show a potentially exciting way forward for those seeking new ways to meet challenges facing individuals, communities, economies or the natural environment.
Social enterprise certainly strikes a guide chord with those who are in favour of ’entrepreneurship’ or finding a ‘third way’ to meet these challenges, providing an alternative to interventions that are wholly state, market or charity-led.
In the post-Enron age of waning trust in the traditional businesses that put private shareholder value in the driver’s seat, social enterprises are a refreshing alternative -as they set their sights on stakeholder value, social impact and sustainability.
Now, where previously individual entrepreneurs and businesses had been toiling away, we’ve got a growing social enterprise ‘sector’ with its own national coalition, and a special government unit under the Department of Trade and Industry with a remit to ‘create an enabling environment and establish the value of social enterprise as well as make them better businesses’.
At the same time, a new breed of organisations has emerged across the UK to help social enterprises to start up, become sustainable, and grow.
There are now scores of these support organisations, social enterprises numbering probably in the low thousands -between 1,000 and 2,500 some say -and investment in social enterprise is in the tens of millions of pounds.
While many social enterprises are doing brisk trade and have a keen sense of the social, environmental and economic benefits they create, most are inching toward market sustainability. Or they have, at best, a working theory of how they create change without the conclusive evidence to stand behind it, compare it to other types of businesses, and gauge their performance over time.
Social enterprise as a sector – businesses and support agencies – must show their mettle, or risk losing the ‘buzz’, and the high level of support and resources that that has enabled.
Once these organisations have the tools, skills and the resources to prove their worth, only then will the Social Enterprise Unit’s goal of truly establishing the value of social enterprise be met.
Working from its experience with evaluating the difference that community projects and programmes make in new ways, NEF has undertaken the first national programme to help social enterprises to ‘prove and improve’. Over the past two years, we have been researching ways that social enterprises can learn how to tell their stories better, back them up with evidence, and move towards better business performance.
This has involved a lot of research, some ‘piloting’ of various approaches, and a lot of awareness-raising by going out and talking to both social enterprises and the support agencies-helping them to understand the challenge of ‘proving and improving’ and learn how they can build their skills in these areas.
We’ve been helping social enterprises to understand, refine, or use approaches such as social accounting and auditing, a social enterprise version of the ‘balanced scorecard’, a set of key performance indicators for co-ops, a ‘health check’ for development trusts (a type of social enterprise), LM3-a measure of local economic impact, Prove It!, a way to measure social capital and other soft outcomes, and Social
Return on Investment. We’ve made a start, and will be publishing a ‘proving and improving’ toolkit in the spring, and will be taking the show ‘on the road’ in 2005 to help social enterprises keep up the good work, keep up the excitement, and set the stage for its sustainability long into the future.
For more information on the NEF-led Quality and Impact Project of the Equal-funded Social Enterprise Partnership (GB), please visit