Why we’ve Broken Up with Social Enterprise

May 18, 2017

If you’ve ever experienced a break up, you’ll probably know how we feel right now. We began our relationship with Social Enterprise full of excitement. We saw our shared future together – it was the manifestation of all our hopes and dreams for a better world. We believed that together we could achieve so much more than we could on our own. But after a seven year relationship, the itch has truly kicked in. We’re breaking up. And to be honest it’s because we’re disappointed with Social Enterprise.

It’s hasn’t been easy, and we are feeling pretty heartbroken (there may be a tub of chocolate ice cream coming out tonight!) that Social Enterprise didn’t hold up their side of the bargain. But we’re realists, and we now know that there was a mismatch between our initial hopes and dreams and what Social Enterprise has ended up being.

So what did Social Enterprise do wrong? There were two key breaking points for us.

 

“Whether it is social enterprise or another term, at the heart of it for me is that holistic invitation and the profound belief that… when you are purpose driven you will be profitable and you will get there” — Olivia Maclean, panellist, General Manager of Mission Development at Baptcare

 

The first is that Social Enterprise is increasingly self obsessed and inwardly focused. For some people this is an obsession with the idea of social entrepreneurship, or being a founder. We believe that Social Enterprise has lost some of its initial reason and motivation, and it’s become more about that label of being a ‘Social Entrepreneur’. Obsessing over definitions that are unhelpful, drives limited thinking and limits the impact that we can really be part of creating. Constant naval gazing limits collaboration.

 

“What these terms have been helpful in doing is to reframe the conversation and get people thinking differently outside their normal silos of activities. And I think that is all that is happening here. I think the social enterprise term has passed its use-by date.” – Christopher Thorn, panellist, Partner in Social Finance, Impact Investment, and Philanthropy at EY

 

The second, is the obsessive focus on profit, and what Social Enterprises do with it.

Social Enterprise too often breeds an obsession with labels, and makes entrepreneurs feel they can only make a difference through their profit distribution. For us, this is unsustainable, and totally misses the point. There is an underlying laziness in finding a nice, flashy term that you can call yourself, rather than do the work to figure out how your business is actually doing good in the world.

 

“If you limit the good you can do in the world, to what you do with your profit, or even worse, what you do with a percentage of your profit, you have completely missed the point” – Bessi Graham

 

Social Enterprise for us became a partner who lost his way. Social Enterprise lost sight of what it originally set out to do, which was to work to create better social or environmental outcomes.

These obsessions and definitions have trapped Social Enterprise in the very problem it was trying to escape– the scarcity mindset that plagues the charitable not-for-profit space. There are already enough organisations competitively fighting over shrinking pools of capital in a philanthropic and government space. We don’t need more grant reliant organisations – we need enterprises with sustainable, high impact business models – and that’s what we would call a business that’s doing good and making money.

 

“I know a lot of people who work and come up to you with big ideas and will talk about being a social enterprise and I would try to go one layer deeper to the business model and normally it didn’t exist!” — Eyal Halamish, panellist, co-founder and CEO at OurSay

 

We thought that Social Enterprise would open up new pools of capital. But by trapping Social Enterprise in the definition of a grant-reliant-not-for-profit-with-some-kind-of-trading-that-reinvests-or-redistributes-part-of-its-profit, it’s still in the same category. When you can’t access broader pools of capital – how is that different from operating as a charity? Why create a label and call yourself something else, if it doesn’t actually change the game of where you play or how you play?

So what does this break up mean?

 

“The idea of breaking up with social enterprise is in no way a breaking up with those people who call themselves a social enterprise. But social enterprise as an idea has come to a place where our relationship doesn’t work anymore” – Bessi Graham

 

We promise, we won’t be changing our phone number, we’re not being overly dramatic, we can still be friends. We’re not changing who we are as an organisation – TDi remains committed to the vision of bringing together doing good and making money. We will continue to work with groups, whatever they call themselves, to identify opportunities to build sustainable business alongside social or environmental impact. What we are interested in, is the impact you’re trying to have in the world – regardless of your legal structure.

 

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