Social Enterprise Is Not Social Change – Comments

BY DEBORAH CORBER

ON March 6, 2018 04:43 AM

This is a fascinating, useful and timely opinion piece. What I wonder, though, is how we harness the goodwill (or will to do good) that underpins the SEE movement in service of needed social change. If we assume that big social/systemic challenges require a collective impact approach to problem solving (SSIR), how can for-profit and not-for profit sectors looking to create positive impact participate in developing/innovating solutions? How do we shift the focus of SEE actors to a collective, rather than individual, approach to problem-solving?

BY CARLA JAVITS

ON March 8, 2018 04:30 PM

Social Enterprise IS Social Change by Carla Javits, President, CEO of REDF

The authors miss the mark by suggesting that social enterprise and social entrepreneurship have done little to solve social problems, and that instead, organizing, power politics, and government are the (only) ingredients for social change. I agree wholeheartedly that political and civic engagement and organizing are an essential driving force to create social change. This is fundamental to a healthy democracy.
However, I would argue that the authors’ analysis of the role and value of social enterprise and social entrepreneurship is not only conflated (they are not the same thing) but also not well informed.

An illustrative example. For 20 years, REDF has invested in social enterprises—businesses with an explicit social mission that provide jobs in a supportive environment focused on skill building and offering services to address challenges that may prevent people from succeeding in the workforce.

These enterprises have prepared hundreds of thousands of people who have faced great adversity, including homelessness and or incarceration, to work and progress. Plenty of evidence demonstrates the positive results. Mathematica, one of the country’s most well-respected evaluators, studied California social enterprises.

In terms of systemic change, although workforce development programs have received billions of dollars from the government thanks to advocates and organizers fighting for the necessary resources, the programs are generally not set up to help people who are overcoming profound employment barriers.

Social enterprise leaders are changing that by demonstrating the effectiveness of this approach and its ability to work cost-effectively at scale. Along the way they engage and inform both the government and the private sector, encouraging them to do much more. The public workforce systems are increasingly interested, with Los Angeles and San Diego leading innovation in this area. And not coincidentally, frequently those who are now more stable because of employment are better able to voice their concerns in the public arena as advocates.

By developing the field and the base of evidence, creating the community capacity to deliver high impact programs, and pushing government to invest more in “what works”, we build a stronger scaffolding for public programs. And once the dollars or incentives are provided, they are used more effectively and efficiently. Good outcomes all the way around.

In sum, what we are doing is working—on the individual level and the systemic level. You can see it. You can scale it. You can measure it.
We are engaged in a massive public debate in our country right now about the role, size, and purpose of government. We are divided about how to fix problems.

I would argue that social entrepreneurship and social enterprise are emerging in part because of these divisions. Most of us in this field are pragmatists. Many are young people cynical about the ability of our institutions to create change. Pushing government and the private sector to do better, to do more.

We want to see real change on the ground now. Many times, the changes wrought by civic activists and organizers are wind in our sails. Think of those fighting to reduce incarceration. When more people return to the community, social enterprises can do more to make sure they get jobs and housing and progress with their lives.

As allies, social entrepreneurs, social enterprises, community organizers, advocates, and political activists can be a powerful force for social change. Either/or is wrong, as was the authors’ premise. Unity, not finger pointing, is the way forward.

BY SARAH ORR, Smith Orr & Associates

ON March 15, 2018 12:28 PM

I applaud Carla’s perspective and response. She is an expert who knows whereof she speaks! REDF, the organization she leads, is a superb example of how highly effective social enterprises work, create and effectively maximize cross-sector collaboration and and achieve laudable, measurable, and replicable impact. Thank you, Carla, for your thoughtful and demonstrable response; for your leadership in the field of social change.

BY Karen Gates

ON March 15, 2018 01:56 PM

I could go paragraph by paragraph in challenging this article’s assertions, but instead I’ll make just one observation: The article shines light on the absence of a foundation of shared definitions and organizing principles for social innovation and entrepreneurship—a foundation that would be central to effective broad teaching and learning.

In turn, that absence shines light on an important opportunity.

If Martin & Osberg’s article (SSIR, 2007) didn’t take hold as a part of establishing definitions and principles, I find that unfortunate.

BY DEREK BROWN

ON March 15, 2018 02:35 PM

I would echo Karen Gates’ remarks. I have been a distant admirer of Marshall Ganz’s work for sometime, but I fear that he and his co-authors have intentionally or not illustrated the confusion that still exists around definitions of social entrepreneurship and social enterprise. Not all social enterprises are led by social entrepreneurs, and certainly not all social entrepreneurs employ social enterprises as a vehicle to promote social change. While there are plenty of examples to cite, as the authors do, of social enterprises of technical knowledge solutions offered by social enterprises, the authors do a tremendous disservice to not look at the track record of social entrepreneurs working collaboratively with other changemakers in launching social movements, mobilizing citizens to enact change, transforming power relationships and improving the lives of many. The late Ashoka Fellow, Javed Abidi, who passed away only two weeks ago, is a leading example of a social entrepreneur who did not shy from political activism to change the landscape of disability rights in India. His work and those of the thousands upon thousands with whom he joined hands, illustrated the best examples of creative problem solving, entrepreneurial leadership and the mass mobilization of people power to achieve dramatic impact on the lives of so many. Yes, there is indeed a trend, on college campuses and beyond of many who are drawn to both social enterprise and social entrepreneurship who shy away from political action, and the hard work of political mobilization, etc., and yes, this is deserving of a real scrutiny. But I fear Marshall Ganz, Tamara Kay and Jason Spicer have lumped a very diverse field of human endeavor into one pot. I would encourage them to revisit their critique, investigate the field more and draw distinctions that will not through the baby out with the bathwater…..

BY Mike Riddell

ON March 16, 2018 12:58 AM

Not sure i agree with your angle here.

The only reason the social enterprise hasn’t worked yet is because the business model isn’t innovative enough.

It’s a failure of the markets to not recognise the things of value to the general public – things that solve the problems of health, environmental and mental pollution, isolation, worklessness, boredom, empty consumerism, abusive relationships and so on.

Once we have a created a legitimate metric for measuring social value then we will be able to create a new asset class that is not only able to invest in results that create the solution but it will be an asset class that is more sustainable, more resilient and more resourceful than all the other asset classes that are underpinned by the dollar and which on the other side of the balance sheet are underwater in terms of debt.

The emperor’s new clothes and all that.

We’re talking currency. Community currency.

What gets measured gets done and if what gets done is good, then those closest to getting it done (the social enterprise community and the people they represent) will be the first to benefit.

BY Jonathan Isham

ON March 16, 2018 04:36 AM

I am a big fan of Marshall Ganz’s – his is the best model of social change for our time – but I think he and his co-authors miss the mark here on where social enterprise is now (‘Everyone a changemaker’) and how it compliments organizing and activism, as noted in the Martin and Osberg 2007 SSIR piece. Indeed, Marshall and his colleagues should read Martin and Osberg’s new book and ask if they can dismiss the remarkable opening example about reduction in genital mutilation in Senegal as readily as they dismiss PlayPumps (the Solyndra of social enterprise). And whenever I hear folks identify social entrepreneurship with a “neoliberal ideology,” I am forced to ask whether they are actually reading the literature on the subject: the material that I assign my undergraduates to introduce them to the term – David Bornstein’s book and even Jacqueline Novogratz’s Blue Sweater – would disabuse Marshall and others of the idea that “SEE model aspires to help dysfunctional postcolonial governments with limited resources meet the requirements of multilateral institutions such as the World Bank and the International Monetary Fund” (now there’s a doozy!) Alas, their weak SSIR salvo here against social entrepreneurship here distracts from the very important point they make: that many tools are needed to take on “systemic social problems such as economic, racial, or gender inequality; or health care, education, or criminal justice.” Neither social entrepreneurship nor traditional forms of activism can do this alone. Nor can one philosophy about social change.

BY Rebecca Buechel

ON March 16, 2018 07:42 AM

This description, itself, locks into an “either or” proposition, probably as a knee-jerk, anti-capitalism reflex. Rather than try to criminalize socent, critics should see it as one among many fish in the aquarium of agents of change.

A nice example in Paris has been food waste, where a UK-based socent example of jams being made from what would otherwise have been tossed food, has come to inspire civil legislation forbidding supermarkets to throw away usable food. This change took place over the space of a few years.

Socent is just one way people can easily prove their ideas for positive solutions (rather than wait for lumbering governmental processes to manifest such ideas) and then citizens and local governments can pick up and expand on useful models.

Both processes can exist simultaneously.

BY Avi Green

ON March 16, 2018 10:11 AM

Marshall Ganz and Tamara Kay make a bold and important claim, and back it up well. In evaluating Social Enterprise and Social Entrepreneurship, the big question is: what are we comparing them to? Ganz and Kay have studied large-scale civic organizations like unions, the civil rights movement, etc. When compared to the impacts of union membership on income inequality, impact of the civil rights movement on Black suffrage, or, for the matter, the impact of veterans’ associations, gun ownership groups, and women’s associations on the wellbeing and political power of people in those groups, it is hard to argue that social enterprises and social entrepreneurship have anywhere near comparable impact.

Of course, social enterprises and social entrepreneurship are relatively new forms of organization, so it may be unfair to expect such sweeping impacts. And, on the other hand, when social enterprises and social entrepreneurship are compared to standard model profit-seeking firms, they offer double bottom lines that stand out. It is infamously difficult to measure the return on investment on various types of philanthropy—but it is hard to argue that monies spent laying the ground work for the movement that led to, say, the Civil Rights Act of 1964, was not money extremely well-spent.

The real question philanthropies must answer is: what can we do with our resources to achieve the goals we seek? Many philanthropies invest in direct service, many in social entrepreneurship. Ganz and Kay correctly point out that if large scale social change is the goal, increased investments in movement-building civic organizations are warranted. Not all philanthropies seek such change—but in a time of swiftly rising inequality, challenges to traditional mode of work, and increasing pressure on democracy—perhaps more need to do so.

BY Andrés Quezada

ON March 16, 2018 10:14 AM

But what if social entrepreneurship is seen as the laboratory to test solutions that would then be scale in the State, what if social entrepreneurship is a branch in politically engaged ecosystems. It may be this field a great way to employ the capacities of people with technical abilities willing to participate in transformational collective processes.

Maybe we should be discussing on what paradigms of property, equity sharing, and systemic understanding of problems are the SEE promoting. And here I am completely agree on the warnings Ganz points.

Maybe if we think SEE with a territory-based focus, being the entrepreneurship agency a medium and not at end by itself, the SEE approach may be an opportunity to organize people in order to constitute power to demand change.

I work in an SEE organization (facebook.com/socialabgt) and I also participate in a political organization with a relevant capacity to incide in our agitated political reality. And our common discussion is how to articualte this efforts rather than separating them. I share what Ganz says here, but I would add: don’t judge things by what they are but from what they could also be.

Sorry for my english, I’m from Guatemala. By the way, I participated in the Ganz’s course “Leadership, Organizing and Action”

BY Charlie G

ON March 16, 2018 02:11 PM

It seems unfortunate that the article paints this as an “either or” situation. One might question whether the success of social movements were the result of direct collectivist political action, or of more subtle profound cultural changes over time, many resulting in necessary legislation.

Where do “systemic problems” arise ?

While groups of citizens do indeed share some problems in common, one might question the efficacy of trying to organizing disparate motivations and interests in order to focus political will on what the authors indicate what are “known solutions to most social problems”, a questionable assumption. Is Hirschman’s ‘voice” one, collective voice or could it also possibly be individual voices in different tones?

While we could tell people to wait for the next big plan, we could also encourage thousands of little plans (a la Jacobs) – while many fail, and may not scale, social “capital” is enriched and there can be genuine empowerment rather than merely feeling good about writing a letter or attending a rally.

It is no small thing to see people change as individuals and to see small projects succeed. I suppose the authors belief that nothing substantial can happen if efforts are not political and aimed at “systemic” problems. Perhaps this view fails to see the cultural – that there is value of slow change, that it can be empowering and sustained, and can lead to “systemic” change. Hey, since you’re on a neo-liberal rant, you could have mentioned “1000 points of light”. Let’s be open to everything.

BY Stuart Williams

ON March 17, 2018 08:32 PM

If you work with marginalized or disenfranchised communities be brave enough to do the following.

Hold focus groups to:

1. Independently ask only octogenarians what the choke points preventing the creation of a socially, economically and environmentally sustainable community that incorporates social, economic and environmental justice are.

2. Independently ask twenty somethings the same questions.

3. Independently ask the octos to think back 60 years to give you the answers from when they were 20.

4. Bring the octos and 20 something’s together, invite the community leaders, religious leaders, not for profits and municipal leaders to convene to see the results.

5. Present the results

Having done this around the world, not only are the results virtually all the same ie nothing has changed in 60 years, I will make the argument that things are actually worse.

We must create new paradigms of inclusive circular community economies, Social Enterprise is not social change, however, it is one of the catalysts that can make it happen.

BY milford bateman

ON March 18, 2018 12:09 PM

Really excellent analysis of the social enterprise movement uncovering its many flaws, the zero evidence in its favour and the hidden ideological aims of those most aggressively pushing it. We also looked at the narrower social business movement started by Muhammad Yunus of Grameen Bank fame and found it to be also based on zero real evidence of success, huge hype and also driven by an ideological aim to drastically reduce the state in favour of private measures. Our book chapter on this can be found here: https://www.researchgate.net/publication/320181628_Muhammad_Yunus’s_model_of_social_business_A_new_more_hum

BY Anh Nguyen

ON March 18, 2018 07:24 PM

Associating social entrepreneurship with neoliberalism is problematic on many fronts. Most importantly, that ignores the fact that many economic powerhouses in the world combine a market economy with wealth redistribution, equity-enhancing policies. In a similar vein, social entrepreneurship aims at ‘doing well’ while ‘doing good.’ Power balance and institutional top-down changes take a long time. If we do not empower bottom-up changemakers, who is going to rise up to the challenge?

BY Dwight Howell

ON March 18, 2018 08:45 PM

I agree with your perspectives, “Solving systemic social problems takes people, politics, and power—not more social entrepreneurship.” Thank you for the divergent views presented.

It feels as those forget the intent of the article is to change frames of reference in understanding the current approach isn’t working. Something needs to change or else we will have the same conversations in another 50 years.

If you haven’t had to endure the other side of this argument, then it is hard to truly reflect on the reason for a new perspective. If you don’t have to worry about how you dress or the car you drive or the street you live on to make feel people comfortable with the color of your skin then you are not feeling the pressure of much needed change.

Going further, I think people attempting to drive social change need a better understanding and comprehension of the political and judicial changes required for long standing change to occur. Next, the right “powerful” people need to be on board in order to provide the necessary placement, access, and influence to get the real issues at the table. It is like we have forgotten the, “whole is more than a sum of parts,” by Aristotle. If we took a collective approach with the countless social non-profit organizations to achieve specific objectives will accomplish more than the disparate efforts we try to call social change.

BY Reine De Ciel

ON March 18, 2018 10:50 PM

YES POWER AND MONEY ARE ONE IN THE SAME TWO BUT NOT TWO SO I LOVE THE STORY BUT THE BOTTOM LINE IS THAT MONEY CREATES CHANGE WITHOUT IT THEIR IS NO FUEL FOR THE ACTIVISM AND CERTAINLY NO METHOD OF INFLUENCING POLITICIANS.

BY Zen

ON March 19, 2018 03:47 AM

Hey, I understand professors need articles, but these guys (authors) really need to think harder.

SEE is not a panacea to all societal problems and should be considered as such and judged upon. Today, social problems are tackled by three main groups of actors – directly by government institutions/policies and charity organisations (for which solving social is their main goal) and indirectly by purely for-profit businesses (for which solving social problems is almost always a by-product of their profit maximisation operations).

Yes, SEE build on the neoliberal ideology, with the belief that markets produce the most cost efficient and sustainable economic outcomes. This has long been proven true, especially as compared to governments. Sure capitalism is not be the best system we may want, but we have yet to invent and better one. Until then, all we can do is keep improving it as much as we can, like SEE do – by trying to bring a more social face to doing business.

SEE do not attempt to substitute for-profit business sector, government or charity organisations as the three of them have important and well established roles. SEE attempt to fill in the gaps created by market, charity and government failures and build on the best elements of the three: the traditional business (builds on the sustainability of operations), governments (targeting hard to reach groups from public policies) and charity organisations (bringing more efficiency and sustainability to their operations).

No, SEE do not construct social problems only as “knowledge” problems, or at least for the the majority of them. Social problems are multi-facet: as knowledge, as outreach, as accessibility, very often as lack of willingness to deal with, but also as power problems. And here you guys are right, the SEE target groups are mostly powerless and thus, more often that one may think, not enough interesting for governments and politicians to deal with their issues. However, recommending that social entrepreneurs should rather stop getting their hands dirty in helping to solve local problems and instead start organising revolutions does not seem very forward looking.

The overall number and volume of activities of SEE is still so small that it can even be called an social/economic sector. For sure, it should be recognised that there are failures among SEE actors and all efforts should be made to reduce/avoid them. However, such failures can’t be a reasonable argument for social entrepreneurs to stop existing, similar to the existing failures in traditional business or various government organisations which would not mean that they should stop existing either.

The majority of SEE in the world, same as the majority of traditional for-profit companies, are small one and operate almost only at micro-level while systemic changes require interventions especially at meso- and macro-levels. Being yet e very small sector (if we can consider so) their interventions and influence on the economic and politics systems is yet insignificant. Thus considering them a distraction to democracy is not only ungrounded by also childish.

BY Nicole Etchart

ON March 19, 2018 10:23 PM

Several of my comments gave a great response to this article, so I won’t dwell. As founder and CEO of NESsT, an organization that has been investing in social enteprises for the past 20 years, I have often thought about this issue, the role of SE vs the role of government in solving social change. But I dont see it as one is better than the other. I think they both have a role to play. Lets face it, the world has embraced capitalism as the response to growth. But we know that it fails to include everyone. We need both the private sector and the public sector to address this failure. We need real sustainable jobs to employ ALL people. Government subsidies are not the answer. SEs that are market driven do this better. But we also need government subsidies to pay for what is not market driven—-good education, good health….

I don’t see it as a zero sum game. In fact, once a model has been proven by an SE, why not issue an impact bond and bring in both the private and public sectors.

SEs are hybrid models that try to bring in the best of both worlds so that both worlds can learn and do what works best. In many ways, they demonstrate what could happen if we didn’t have market failures. They need to be accountable both to donors and investors. Governments don’t have the resilience or political will to put forth sustainable models. The private sector doesn’t have the profit will to put forth models that address social costs (training and rehab among others) since they seek financial returns above all. In sum, we don’t have the luxury of discounting SEs as long as billions of people are living a quality of life that most of us in this blog exchange, would not want to live.

BY Rory Ridley-Duff, Sheffield Hallam University

ON March 20, 2018 03:33 AM

Whilst articles critical of social enterprise and entrepreneurship are welcome to draw attention to much of the misplaced rhetoric that drives the field, this article is so full of intellectual holes that I wonder how it ever got past the editorial team. However, as a provocation to social enterprise scholar more sympathetic to the field, the article is useful because it catalyses much needed challenges to the assumption that all social enterprise/entrepreneurship is driven by the US model.

Firstly, this article is ahistorical – it reports only experiences in the USA which are at worst resisted, and at best rejected, beyond the boundaries of the US. In the UK, social enterprise started in 1981 when it was explicitly taught at Beechwood College as part of an education offer to the cooperative sector. In Italy, it started from 1978, when the first social cooperatives formed to provide health and work-integration services unavailable from either the state or the private sector. They were primarily multi-stakeholder cooperatives, with professional worker-owners, and beneficiaries who shared ownership with them. To suggest that the social cooperatives of Italy have not addressed social problems, and to ignore their contribution to social enterprise theory and practice, is poor scholarship (distortion by omission).

Ironically, I do sympathise with the authors of this article because they chart the neo-liberal takeover of the social entrepreneurship field in the US (and warn of the dangers of allowing this to happen elsewhere). However, their own introduction – highlighting the billions pumped into this field by charitable foundations should form the basis of their critique. What people call social entrepreneurship in the US is actually philanthropy. They describe a situation that is unchanged from the one that Jed Emerson described back at Harvard in 2000 (when developing ‘blended value’). Charitable investments made by philanthropists are not a good basis for the grassroots development of social enterprises. Look to Italy, Japan and other parts of the world for better models.

So, let’s set the record straight – theorist after theorist outside the US (including Simon Teasdale, Alex Nicholls, Andrea Westall, Marthe Nyssens, Jacque Defourny, Lars Hulgard, Carlo Borzaga, myself and Mike Bull, as well as the perceptive US author Janelle Kerlin) place mutuality, not the market, as the central commitment of the social solidarity economy, and the social enterprise sector.

Yes – this has come under attack (particularly post-2003) from US thought, and the market does enter the frame of debate through interventions into the market by co-operatives. However, to suggest the market is central to social enterprise is to ignore most of the world’s scholarly outside the US, particularly the work of over 200 researchers in the EMES International Research Network.

Beyond the USA, research focusses on the links between cooperatives and associations, between co-operatives and social businesses, between cooperatives, associations and the state. For some (myself included) is extends to progressive changes in private sector practice towards more participatory, collaborative and dare I assert co-operative practices, that lead to the development of outstanding employee-owned businesses like the John Lewis Partnership and Mondragon Cooperative Corporation. These businesses PREVENT poverty by sharing power, knowledge and financial gains – they deserve much more of our attention as scholars.

Come on Stanford Social Innovation Review – you can do better than this.

Dr Rory Ridley-Duff
Professor of Cooperative Social Entrepreneurship, Sheffield Hallam
Co-author of Understanding Social Enterprise: Theory and Practice (Sage Publications)

BY milford bateman

ON March 21, 2018 02:30 AM

An interesting but I think an unfair comment from leading social enterprise advocate, Professor Ridley-Duff, on a very good article that was about the politics of the social enterprise sector.

The US experience with social enterprise is indeed the worst and not (yet) typical of the rest of the world, as Professor Ridley-Duff says. But then what happens in the USA tends to move or be imposed elsewhere. So raising concerns about the hidden neoliberal logic and motivation that drives the social enterprise agenda in the USA, as this article does, is very useful in terms of the rest of us knowing what damage might be around the corner here in Europe, and what to do about trying to prevent it.

The European experience is also perhaps not quite as good for social enterprises as Professor Ridley-Duff says it is. The famous Italian social coops were discovered in the former Yugoslavia in the early 1980s by visiting Italian academics (they were known as ‘Self-Managed Interest Communities’, or SIZ in the local acronym) and taken back home to Italy. They are important today because they are built on cooperative and participative principles, not because they are built on social enterprise principles. On the numerous study tours to northern Italy I have led with various Balkan cooperative delegations, I always found it interesting that the social cooperative’s representatives we met were very keen to be called ‘cooperatives’ thereby to distinguish themselves from the growing number of ‘social enterprises’ in Italy and elsewhere, which, they argued, seemed to be all about heroic founders who get public money to get started, always suspiciously do financially very well themselves and then rarely let go of their creation when they should – and that was NOT what their social coop was all about.

Another awkward aspect skirted over by Professor Ridley-Duff is that many of todays leading social enterprise advocates and academics started out their careers as advocates for the cooperative model. However, when funding for cooperative research was cut and when the relevance and career progression potential of cooperative research was greatly reduced because of the changes to the ideological climate in the 1980s and 1990s, many of these individuals chose to branch out into covering the more neoliberal-oriented social enterprise model instead (which, to their credit, they have done with distinction). But as one of those of us who continue to solidly support democratically managed and owned cooperatives, and resist the social enterprise model because of its clear origin within an elite-driven anti-cooperative neoliberal agenda, I find the legitimacy of this ‘transition’ a little difficult to accept. When the cooperative model is so radically different to the social enterprise model on so many angles, it is difficult to see how someone can simply ‘evolve’ into supporting this latest fad by claiming that it is simply the logical extension of the cooperative model. I just don’t buy this transition at all, sorry.

For me personally, as a researcher into the microfinance sector, the most disturbing development has been to see so many high-profile social enterprise advocates now quite unproblematically advocating the commercial microfinance sector, which is one of the most important social enterprise creations of the neoliberal project. Those taking this approach seem oblivious to the fact that the microfinance sector is today driven forward by ‘social entrepreneurs’ and ‘social businesses’ with very little interest in democracy, participation, equality or other progressive economic or social goals that are antithetical to the neoliberal project, as outlined in our book chapter noted in my comment above.

So I’m not sure that Professor Ridley-Duff is quite correct in saying that the leading social enterprise researchers and advocates are all deeply concerned with mutuality (or with democracy, participation, equality and sustainability) when so many of them would appear to have long since abandoned any such concern(s) in order to advocate the false neoliberal narrative of heroic social entrepreneurs driving forward the social enterprise agenda.