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Social enterprise: Do definitions matter?

Sarah Dunwell spells out the things that really matter to entrepreneurs – social or otherwise

I’m often asked to speak at conferences about social enterprise. I’m often asked to spend time doing consultancy with public sector organisations who are thinking of becoming social enterprises ‘because it seems to be the thing’. I’m often asked to write articles about social enterprise.

Hmmmm.

Whenever I do, I often think of the definition of a social enterprise (although to be honest there is little agreement about this) from the Department of Trade and Industry (now the Department for Business, Innovation and Skills) in 2002: “A social enterprise is a business with primarily social objectives, whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.”

I often liken social enterprise as the collective noun ‘fruit’ and community interest companies, co-ops, mutuals etc as apples, bananas, oranges, and so on.

But all of that has ducked the question I think is most important: does it matter? When I started Create we worked long and hard with lots of people to try and find some words to stick under the logo that summed up what we are about. We settled on: ‘where good food and people matter’.

So I guess that’s the answer. I didn’t insist on ‘where social enterprise, legal structure and governance matter’, because if I am honest they don’t. I think they are important and can be significant and helpful, but they don’t fall into that category of things that really matter for me.

And I think this is because I believe when a person starts a business, they do so because they are striving towards purpose, value and meaning. That might be ‘make lots of money; buy a big house; secure the future for the kids’. It might be, ‘delight customers and add value to lives and communities’. In one sense it doesn’t matter. We all start businesses with a purpose and just because we stick a particular label on that business doesn’t make its purpose more noble than anyone else’s.

There are great advantages to being a social enterprise: it protects and shores up your core ethos as you grow, gives clear external messages and supports the development of a strong internal identity.

Does it matter? I think not. Doing business well and with an honourable purpose matters more than labels.

Sarah Dunwell is the founder of the award-winning social enterprise the Create Foundation, an organisation which provides training and employment opportunities to marginalised or vulnerable people. For more information, visit: www.createfoundation.co.uk

 

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