When social and commercial collide
Ian Wallis looks at how social enterprise is maturing.
There’s a wind of change blowing through social enterprise if my recent touch points with it are anything to go by. The language used, the focus, the people involved in the sector, all seem to have changed.
Whether they’ve hardened around the edges, sharpened their elbows to battle it out for the contracts that will keep them alive as others fall, or whether it’s just a realisation that social enterprise needed to change its identity, I’m not sure. There’s a growing commercial maturity. I saw it first-hand at the dinner we hosted with Coutts last month and again a week later at the UnLtd award winners’ networking lunch, where a handful of its brightest early stage social enterprises had gathered. UnLtd, by the way, is a charity that provides support and funding for around 1,000 social entrepreneurs each year. The speech made by UnLtd chief executive Cliff Prior emphasised the need to be focused on sustainable cashflow. And Maria Zedda, founder of Wideaware, a training provider set up to help companies understand their disabled customers’ needs, spoke passionately about the fairly recent realisation that she needed to charge properly for her time. UnLtd’s Jonathan Jenkins spoke of the Shine Unconference in which a speech by entrepreneur and unashamed-capitalist Doug Richard would apparently have had people throwing chairs in his direction had it been made a couple of years ago. He’d deigned to suggest social enterprises needed to be scaleable. At the aforementioned dinner, guest Phil Conway, founder and chief executive of Cool2Care, spoke of having grown turnover ten-fold last year and expectations of two and a half times’ growth this year. He says the desire to improve the lives of the families of disabled children (he has a son with physical and learning difficulties himself) consumes him. “It does get me up at 5 o’clock every morning to push the pedal harder.” Not wanting to be bogged down by the perception of social entrepreneurs as ‘do-gooders’ though, his interest is far more mainstream business – risk management, pricing methodologies, and suitable forms of investment to accelerate growth. Making money himself isn’t anathema to him. It was fascinating and inspiring stuff. But some words of warning for social entrepreneurs thinking of stretching definitions of social enterprise too far came from the sage Alastair Wilson of the School for Social Entrepreneurs. He pointed to the rate of growth achieved by social enterprises featured in the SE 100 Index over other businesses. “Now why is that? Because [the public] can sniff when something is legit. The public aren’t stupid. And actually if we say OK profit’s good; trading’s good; we want growth, we want development, but actually if we want to think carefully about debt finance, bond finance and pseudo equity finance then in order to hold on to public trust, our primary lesson and our primary focus is social change.” Quite.