In her recent autobiography, Michelle Obama describes the realisation that many nonprofit staff just didn’t face the same financial demands as she did. In negotiating a role at Chicago-based nonprofit Public Allies, she had to push hard for a salary that would enable her to pay off her student debt and save for an uncertain future, without inheritance or other family support. Of her colleagues-to-be, she said:
“Unlike me, it seemed they could actually afford to be there, their virtue discreetly underwritten by privilege.”
The situation is perhaps more extreme in the US but pay inequality between management positions in the private, public and voluntary sectors exists in the UK and brings with it a similar set of negative consequences. NCVO have identified a ‘charity discount’ that gives charity Chief Executives on average between 25% and 45% less pay than they could command elsewhere. We nudge out talented people without the socio-economic means to participate comfortably. As a result, our social leaders are more likely to come from a narrow set of backgrounds — and we know that a lack of diversity is bad for business. Ultimately we run the absurd risk that — as a field that’s all about social justice — we are deepening structural inequality with our employment practices while trying to dismantle it through our day-to-day work.
In my decade’s experience of working with founders of social ventures, I think it’s even tougher for people who want to set something up. In the startup years, social entrepreneurs often find themselves trying to make ends meet from angel investment, where competition with profit-maximising startups can make securing capital nigh-on impossible, charitable donations from foundations that are too often risk-averse and restrictive, and the frankly useless micro grants of UnLtd and others.
It is the word “discreetly” that particularly rings true to me from Obama’s observation. We feel embarrassed to talk about our privilege and the role it plays in enabling us to do social impact work. Our middle class guilt compels us to understate our advantages. We’re quick to tell each other smugly “I went to state school, actually” or “I worked at Tesco all the way through university.” We’re much less likely to say “My parents paid for private tutoring so I could get into a top uni” or “Mum slips me a few hundred quid whenever I see her”. There is pride in being self-made and there is shame in privilege.
I founded Year Here 7 years ago and it was definitely the biggest personal financial risk I’d ever taken. I had 6 months without a salary between leaving my previous role at the Young Foundation and securing a Clore Fellowship, which came with a £20,000 bursary. What bridged this gap? Inheritance from my grandmother, a Northern Irish Doctor whose presbyterian frugality meant she had quite the nest egg by the time she died in 2011.
When I had to move out of the flat I shared with 3 friends because I couldn’t afford the rent, where did I stay? With two of my brothers, who were both financially comfortable enough to have flats in London with spare rooms they could let to their little bro for a peppercorn rent.
When, at the age of 33, I found a way to buy my own place, how did I do it on the meagre salary I took from Year Here? My mum offered me a private interest-only mortgage on top of the much smaller amount I could get from the bank. And where did her money come from? Dividends from a family business that’s existed for generations.
This is the reality of privilege. It’s embarrassing to say that Year Here wouldn’t exist without my family’s relative wealth but I suspect that it’s true.
I know I’m not alone. I know of social entrepreneurs who were able to take big risks because their partner owned 3 or 4 properties that they rented out, covering their living expenses, and others who were able to live rent free in their family home in central London while they built their business up to be able to pay themselves a decent salary.
Many of these people — who we shouldn’t forget are well-meaning, hard-working people running genuinely useful social enterprises — might never publicly admit that privilege has helped them along the way.
By not talking about it, we reinforce the notion that the business of social enterprise is a fair fight. We maintain the mirage that we build our social ventures with sheer entrepreneurial vigour alone.
If you’ve found a way to deliver more social value at a lower price, then your business deserves to thrive. Fair. But what if it took you 5 years to find that model and start turning a profit? And what if, during that time, your life was quietly being subsidised by a generous parent or partner — letting you stay rent-free or paying off debts? That is not a fair fight.
Of course there are exceptions. Many of Year Here’s own entrepreneurs don’t have private financial support and make it work by cobbling together part-time gigs, bursaries and fellowships on top of running their business. If I think I had it hard, then these guys are martyrs, sacrificing so much to build something useful for the world.
But we shouldn’t rely solely on the wellspring of privileged do-gooders, along with a light smattering of superhuman entrepreneurs from more humble backgrounds, to lead the next wave of social innovations. This system perpetuates the very inequality we profess to care so much about ending. And it’s such a waste of talent.
Perhaps a good place to start is for other social entrepreneurs to reveal how privilege played a role in enabling them to build their business. Maybe then will we be moved enough to set about levelling the playing field and making sure that anyone with a great idea for improving society can have a go.