Social enterprise is dead

I heard it this morning from Jim Brown and he in turn heard it from Social Enterprise Magazine

For those who don’t know Jim Brown is a prominent advocate for community shares. I met him last year in Westbury on Severn at an event hosted by Gloucestershire Rural Community Council.

The “death of social enterprise” conversation seems to be associated with a blog about the limitations of the CIC model in terms of social investment.

“For us the solution is to simplify the whole process by removing the cap on the paid up value of share and increasing the aggregate cap to 49% to allow the social entrepreneurs to run their enterprise in the most tax efficient way. This is still in keeping with the standard definition of social enterprise of ‘principally reinvests its surpluses into the organisation’ and would be a simple and attractive value proposition to would be social entrepreneurs who would otherwise be hampered by their ability to be rewarded for sweat equity and scaling their enterprise’s social impact.”

Interestingly that’s where we began 16 years ago in our white paper on business for social purpose and with a business plan in 2004 which said:

” Fifty percent of annual surplus will remain in each local community where income is derived, by way of deposit into a local community development bank serving that location.:”

Where social enterprise has struggled to draw breath was government’s failure to consider how it might be funded.  A year earlier, the relationship between this social purpose business and a microfinance bank had been described in a paper advocating social enterprise in a peaceful Muslim community as a preventative strategy against terrorism.

At the time, there was no CIC model and the plan proposed the Bencom or Community Benefit Society,  a model described by some as a co-op for the greater good. I had the DTI confirm that this approach to profit re-investment qualified in their definition of social enterprise.

Social enteprise perhaps never dies, but is instead continually re-invented.

Social enterprise founders are inclined to be more mortal and last year I reported the death of the man who conceived what I describe above. At the time, I remember Liam Black had been blogging on Social Enterprise magazine about his last 10 years.

“A decade on, are there many more profitable, scaled, well known social enterprise brands willing and able to provide evidence that this alleged new business model is more than simply aspiration dependent one way or the other on taxpayers’ or a rich Californian’s cash?”

Knowing a different reality, I commented on our work and my colleague’s death and par for the course, my comment was deleted.  Only a few months earlier, the same magazine had requested a social report from me for the SE 100 index which illustrated my inconvenient truth.  The report which was never published descibed how the social purpose business approach had been deployed over the previous decade.  Creating Shared Value, contrary to popular myth was not the starting point for this way of thinking.

I seem to be writing a lot about death. Yesterday the story of When children die,  from corruption and neglect illustrated some of the things we are up against. While we go head to head with organised crime, social enterprise has no greater ambition that incubators, think tanks and conferences in an endless process of self-propagating rhetoric.

If social enterprise has died,  the post mortem will reveal the cause, which may well be the determination of some, to paint everyone else out of the picture.

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2 thoughts on “Social enterprise is dead

  1. wzenrg5my says:

    My name is Jim Brown, not Jim Baker

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