The dark side of uncertainty
Ashley Lennon and Ian Welsh of Momentum describe the organisation’s experience of social entrepreneurship. This article first appeared in issue 2 of VIEW Magazine.
Those working within the social economy operate in an expansive and cluttered landscape, moving in and around all the monoliths of the state and its partners. The sector is built around flexibility and responsiveness.
It is keener to take risks than other sectors, working quicker than the political cycle of project development and funding approval sometimes allows; acting as a catalyst for change outwith mainstream funding and sometimes penalised by the centralising mainstreaming tendencies of the Scottish statutory agencies; building and developing social capital through campaigning, awareness-raising, resource development and capacity building with clients and volunteers; challenging people to engage within communities, looking always to public and community benefit; working on behalf of beneficiaries and not shareholders; engaging uniquely with the hard to reach and the socially excluded.
When New Labour replaced compulsory competitive tendering in 1997 with Best Value, there was a clear signal that efficiency and effectiveness were to be as important as economy, and that the delivery of I public services, moreover, was to be free from ideological constraints. During that period, the social economy has grown and, in the wake of the recent election, there seems to be a hint of increasing political and philosophical realignment around social justice and the role of the not-for- profit and voluntary sectors.
Will Hutton touched on this in a recent article when he wrote that ‘the social enterprise and entrepreneurship movement is growing exponentially and if the momentum continues a tipping point is approaching when d 21st-century social enterprise will start to parallel the rise of mutual and pi friendly societies in the 19th century -and for very similar reasons. Before the march of an individualist capitalism, there is a hunger to assert the social and better side of our natures.’
That hunger has informed the statutory agencies in England, who have been quicker to spot the partnership potential of the social economy than municipal Scotland, the government at Westminster quicker to back it with substantial and sustainable strategic soc thinking than the Scottish Executive.
Nonetheless, change, like local government reform, will inevitably come. Just as surely as productive innovation fuels the public sector, it needs to drive all those involved in the social economy, too often unjustly perceived by the ‘professionals’ as soft focus, fuzzy round the edges, unqualified but committed amateurs.
Yet innovation and effectiveness are at the very heart of our sector. As we deal with the constant challenge of securing funding, coupled with working with some of the most rnarginalised people in society, we have to be creative and innovative to survive.
In our organisation, for example, we are currently:
• developing models of person-centred care for a range of client groups directly purchased by local authorities and private clients
• working as a committed service partner in an Equal employability programme
• delivering an innovative respite programme for adults with learning difficulties
• delivering tailored 24-hour care and supported living packages for clients in conjunction with local authorities
• working with a private sector organisation to develop an estate management social enterprise
• refining an assistive technology programme for people with spinal cord injury
• using lottery money to develop outreach services for people with acquired brain injury building and growing access to work support for disabled people on a Jobcentreplus contract
• kitting out a bonded warehouse to facilitate ‘wet work’ with the whisky industry
• lead-managing, and working with a range of statutory agencies, on an innovative partnership to take people with drug addiction challenges closer to work
• discussing with other not-for- profit organisations the possibility of merger and amalgamation
• negotiating the purchase of a private home-care company
• working towards recognition under EFQM
• participating in a joint research programme with other service providers throughout Europe in respect of the employment of disabled people
That range of activity is not unusual in forward-thinking and proactive social economy organisations. Where we sometimes make the mistake is in not celebrating and sharing this fact. We’re too busy getting on with the important work of delivering valuable services to recognise our strengths. The not-for-profit sector plays a critical role in the direct delivery of services, is a significant purchaser of services and active in an enormous range of activities, from arts to education to health care. Yet we often find ourselves having to prove our potential and impact to policy makers and funders in order to get a seat at the table with organisations seen as ‘big players’.
In terms of the sector’s contribution to the national economy however, it is worth bearing in mind that even when viewed only in purely financial terms, the sector is a multi-billion pound industry, notable not just for its size, but also for the spread of its activities. As well as reinvesting in itself fmancially, the sector also wields signifi- cant investment and purchasing power, which contributes to economic development beyond the sector. Getting that message across isn’t always easy. While the sector is by nature innovative and creative, it is not always viewed as such.
When Momentum took over social econo my flml Haven Products last year we contacted the local and national business press to spread the news. Here was a story involving the acquisition of a social enterprise flml which counts multinationals like ffiM and Playtex amongst its key customers. A business where 86% of its employees are disabled and which had recently increased its staff base. A cracking story we thought, but in trying to tell the business press we heard the same response time after time, that stories about the not-for-profit sector are considered ‘too soft’. We persisted, pointing out that the Scottish Executive had made the business of growing the social economy as a priority and that the Hunter Foundation for Entrepreneurship had just issued a report calling for more mergers within the social enterprise sector. We pointed out the contribution that the voluntary sector makes to the Scottish economy, generating an annual income of over £2.62 billion, 1.2% of the Scottish economy’s total income. Finally the Sunday Herald took up the story and made it a strong page-lead feature, but along the way the experience highlighted a widely- held belief amongst the influence makers in Scottish society that the not-for-profit sector and the social economy is lacking enough weight to really pack a punch.
It is our responsibility to challenge this belief and to highlight the impact of Scottish social enterprises as efficient, commercially viable enterprises, delivering services to some of the country’s largest companies and smallest communities, reinvesting the income to provide meaningful jobs for people who may never before have been given the chance to earn a wage or who are rebuilding their lives.
One way to remain vital and fit-for- purpose in this challenging sector and changing environment is through consolidation and growth. While these are standard practice for the business community, the social enter- prise sector has been reluctant to take these innovative options on board Yet with ever-increasing competition, over-capacity and many small organisations living hand-to-mouth, we need to look seriously at how we can preserve the outstanding work of these enterprises and give them the breadth and critical mass that they need to survive.
In the last three years, Momentum has taken the view that consolidation and growth are key to becoming more effective. With the impending reforms to European Social Funding and an ever-increasing competition for statutory funding, we see expansion and diversification as key to our survival. Since 2003 we have consolidated with three smaller companies in the ~ fields of care, training and social ~ enterprise. This has opened us to new markets, switching our focus from survival mode to opportunity. As a result of our recent acquisitions, Momentum has doubled its turnover in the last three years and we now find ourselves better placed to withstand the vagaries of statutory funding. The three organisations we have acquired are now benefiting from the support structures in areas like HR, communications and fundraising, which being part of a larger organisations have brought
The mantle of the entrepreneur is not an easy one for us in the not-for-profit sector to wear. It weighs heavy and sometimes causes us to blush when we try it for size. Yet in order to survive and grow, entrepreneurship and innovation are qualities that we need to nurture. Just this month our Haven Products was awarded the ‘Big Tick’- a nationally recognised symbol of business excellence -by Scottish Business in the Community and was also short-listed for a National Business in the Community award for Impact on Society. As part of the judging process we asked some of Haven customers to provide testimonials and were delighted when IBM and The Edrington Group (better known for the likes of Macallan and Famous Grouse) spoke out in support of our work.
These private-sector firms recognise the benefits of working hand-in- hand with the social economy to make an impact not only on society but also on their bottom line. The schizophrenic nature of the sector, however, is just as easily exposed by the fate facing another of our companies. Maytag’s Access Project, funded by Scottish Enterprise’s New Futures Fund, was a National Training Award winner late last year and is now facing the possibility of the axe as the Scottish Executive implement a new policy of supporting those closer to the labour market With local authority funding under restraint, it’s time for the Scottish Executive to transform the relationship between itself and the social economy by ensuring that this type of project is directly funded by outcome-based service level agreements.
There are a number of initiatives which may give the not-for-profit sector the necessary breathing space to try innovative ways of working -and the Scottish Executive’s £18 million Futurebuilders initiative has a role to play in allowing the voluntary sector to become more self-sufficient and less dependent on public funding. However, it is already massively oversubscribed. Equally, having creatively utilised European funding for a tranche of successful and very necessary training and rehabilitation ser- vices for disabled and excluded people, Momentum must now face the prospect of losing the money over the next two years, destabilising the services, and losing the capacity for those who need it most unless the Executive is innovative in its thinking and provides transitional support and direct funding to match the forthcoming funding gaps.
We operate in a fluid and some- times chaotic world where funding uncertainty in the not-for-profit sector is often set against the safer certainties of block funding within statutory agencies. In order to operate reasonably well in this landscape, we need to develop fast, flexible and nimble approaches and look to maximise our opportunities to deliver valuable services to people living often on the dark edge of uncertainty, working with them to encourage civil engagement.