The Social Enterprise Opportunity in the United States

Is the diversification of social enterprise networks in the United States becoming a barrier for building the social enterprise movement?

There is a myriad of organizations in the United States that gather and network people and organizations that are actively using the power of doing business to create positive social and environmental impact.

The list is composed by a variety of organizational models: networks, alliances, consortiums, universities, corporations, nonprofits, funds, foundations, associations, clubs, ventures, forums, institutes, offices, etc. However, this community doesn’t seem to recognize many things in common.

In a meeting organized by REDF in the context of the Social Capital Markets (SOCAP) conference in 2009, Sonal Shah, President Obama’s appointed Director of the White House Office of Social Innovation, engaged in a conversation with leaders of Social Enterprise.

As Carla Javits reported in her blog “She repeatedly asked us for ideas about government’s role in creating the right environment, and also how to get out of the way as appropriate”.  Sonal was clearly eager to be educated about concrete aspects of the Social Enterprise, as understood by its leadership, gathered for SOCAP.  She was particularly interested about how to begin to build a dialog with the Social Enterprise and about specific ways in which the Obama administration could support the Social Enterprise.

There were great conversations and really relevant insights. Some comments were very specific like procurement processes and access to funding; others were somewhat abstract like the way society views and values trades versus professions. These conversations were important because they got people to talk to one another.

In retrospect, I felt a little like the day of the college presentation when your team is asked to present, but even when you know your teammates, you never really talked about the presentation.  

I felt that we – the team of us doing what we do– weren’t completely ready for that conversation. I would have liked for us to be the other team that shows up dressed for the occasion and each person has its own role, and they place the report on the desk and move on to the stage to make a phenomenal presentation with embedded video and cool transitioning slides – it’s never too late.

It’s never late to take the time and energy in getting to know one another and talk. It proved important during the meeting with Sonal.  We can flush our thoughts and ideas internally, as a team; so we can present them as a clear proposal of how we could work together.

I thought relevant to take a look at the work that other social enterprise teams have done to prepare for their presentations.

Social Enterprise World

The leaders of organizations that network social enterprises in the world got together in the context of the 2009 Social Enterprise World Forum in Sydney. The leadership of networking organizations of social enterprises in Australia, the United States, Canada, Scotland, Denmark and New Zealand shared their insights, experiences, perspectives and visions for advancing the social enterprise in their individual contexts. The highlights of the conversations were Scottland, Australia, Canada and the United States.

Global Social Enterprise

Many of the movers and shakers of social enterprise at a global scale support social enterprise-related efforts in Latin America, the Middle East, Africa and Asia – practically everywhere!  These are globally active and globally recognized organizations such as the Grameen Foundation, The Hub, Ashoka, United Way, Leap Frog, the Acumen Fund, the McArthur Foundation, and many others.

Scottish Social Enterprise

It was clear in these conversations that the social enterprise in Scotland is the most privileged. The Scottish government has been extremely supportive and actively involved with the social enterprise from the very beginning. The Scottish social enterprise community has been enabled to experiment and test the concepts of multiple bottom lines and the use of business models to address social and environmental goals. One of the main exponents of the Scottish social enterprise is Black.

In March of 2007, the Scottish SE leadership began to think of the Social Enterprise as a ‘third sector’, in addition to the private and the public sectors: privately owned for and nonprofit organizations and the government, respectively.  They defined Social enterprises as "businesses with primarily social objectives whose surpluses are principally re-invested for that purpose in the business or the community rather than driven by the need to maximize profits for shareholders or owners".

Under this definition, the government identified around 3,000 social enterprises in Scotland at different stages of development, from small start-up enterprises to well-established businesses with multi-million pound turnovers. The turnover of these businesses was calculated at £1 billion a year. The sector employed around 21,000 with an additional 18,500 volunteers in 2007.

In the same year, the Scottish government announced £1.5 million in resources for an action plan to promote four strategic objectives:

   1. Raising the profile and demonstrating the value of social enterprise

   2. Opening up markets to social enterprise

   3. Increasing the range of finance available to social enterprises

   4. Developing the trading capacity of social enterprises through better business support

Using these objectives, the government facilitated conversations among the social enterprise community members to develop a document called “Better business - a strategy and action plan for social enterprise in Scotland” that highlights the contribution a social enterprise business model could make to economic growth and business development while at the same time meeting social objectives.

Social Enterprise in Australia

The Australian Social Enterprise Community considers itself to be in an accelerated learning curve. Benefitting from lessons learned from other countries’ experiences, they are in the process of defining and categorizing the social enterprise as they put the concepts in practice.

The Australian SE leadership defines a social enterprise as “a social benefit business that trades to fulfill its mission.” And they explain: “The motivations and business models for social enterprises vary, as does the amount of income they derive from trade. Social enterprises build a more just, sustainable world by applying market-based strategies to today's social challenges.”

Canadian Social Enterprise

The Canadian leadership sees the social enterprise as a core sector. This way, they conceptualize the social enterprise as an alternative for anyone and everyone: government, private for-profits and private nonprofits, they can all do social enterprise!

In November of 2009, the Canadian Social Enterprise Community organized the 3rd Canadian Conference on Social Enterprise. A main component of this conference was its Policy Forum that happened November 19th and 20th in Toronto, Canada. During this third annual assembly, the members of the Canadian Social Enterprise community gathered to discuss and to build national consensus around a policy framework that will create an enabling environment for social enterprises to thrive.

Specifically, the 3rd conference aimed to reach agreements about how to take action on building the social enterprise movement using the key components identified the year prior. In 2008, the conference resulted in the identification of six integrated key components that provide a framework for creating a supportive environment for social enterprise. The 6 integrated key components (or pillars) are:

1.       Enhance Enterprise Skills

2.       Expand Market Opportunities

3.       Accessing Capital and Social Investment

4.       Demonstrate the Value of Social Enterprise

5.       Network the Social Enterprise Sector

6.       Enable Infrastructure and Regulatory Environment

The Canadian leadership did a terrific job at facilitating these conversations. They opened the forum for everyone in the social enterprise community in Canada to voice their input in a meaningful and organized way – in English or French!

The information generated during such gathering was concentrated and disseminated back to the community at the end of January of 2010 in a document entitled Synopsis:  Canadian Conference on Social Enterprise Policy Forum and Invitation to Engage in Next Steps. This document presents a list of specific action items that are framed as strategies to advance the pillars of the social enterprise in Canada. Examples of these action items are: accelerate the growth of existing pools of capital, partner with the private sector, agree on a definition of social enterprise, among a total of 27 strategies agreed upon.

The document closes with an Invitation to Engage directed toward the forum participants, other interested individuals and other organizations active in the social enterprise or related efforts.

United States

The Opportunity in the United States

I think there is an opportunity for the social enterprise in the United States to leverage on the work that our Canadian colleagues have done on updating and re-identifying the key components for creating a supportive environment for social enterprise.  For the US environment, I would broaden the pillars to be stated as:

1.       Enhance Skills

2.       Expand Market Opportunities

3.       Procure Access to Capital and Social Investment

4.       Demonstrate the Value of Social Enterprise

5.       Network the Players

6.       Enable Infrastructure and Regulatory Environment

Also, the core-sector approach of the Canadian leadership seems like a more realistic strategy for advancing the movement. Instead of competing with previously established sectors (government, private for profits and private non profits), the social enterprise becomes a welcoming space and an open invitation for already-established structures to join the blended value way of doing business.

I think the market is ripe. Because of our current socioeconomic and environmental circumstances, the media, the government, the corporations, the nonprofits, the peoples are beginning to think beyond profit. We are in a world in turmoil. The ideas of the individual and the ideas of the masses are shifting. The minds of the world are wondering if there is anything else beyond profit. Some have begun to realize that our planet is a high priority and they have begun to take action. Others have realized that the health of our societies is a high priority and they have begun to take action. The impetus is tangible; it’s energizing.

I am particularly excited about continuing last year’s conversations in Sydney during the plenary panels of the Social Enterprise World Forum 2010 in San Francisco.

I am hopeful and excited to see our team taking the time and energy in getting to know one another and talk.

Social Enterprise is a brand!

SUMMARY:
I would like to use the Social Enterprise Code as a tool for having open-door conversations among key members of the community of people actively involved in creating positive social and environmental change using business practices. I envision these conversations to leverage on the work already done by other social enterprise communities around the globe for these to serve as a baseline for having our own conversations. I am hopeful that these conversations will help us reach some (sometimes implicit) agreements with the direct objective of defining our brand and strategizing our positioning: clarifying our message and unifying our voice. I think that is our responsibility to present the social enterprise as an alternative to addressing social, economic and environmental challenges. I think that people will grab the Social Enterprise brand off the shelf because it is a good thing! It is a good thing for people; it is a good thing for profits; and it's a good thing for the planet.

FULL TEXT:

I think that we need a ‘Social Enterprise Code’ because we need to define our branding and our positioning. For that, a 'code' may come in handy as a way of developing shared terminology to be used as a unifying element.

We are a community of people actively involved in creating positive social and environmental change using business practices. That is a long concept to grasp onto! It is a complicated brand, hard to position.

It took 'us' (the community of people actively... - what I said) more than 10 years to begin to feel comfortable with being 'different' and to begin to put words and names to the concepts. The 'Social Enterprise' is a concept with a definition yet to be agreed upon. As a practitioner and within my circle, I have my own definition of what Social Enterprise means to me but other practitioners or funders or academics may think differently - which is great!

From an innovation standpoint, dissent is a critical element. From the perspective of building the movement, 'agreement' is the name of the game.

As a social entrepreneur, I think of 'building the movement' in terms of 'bringing it to market' ('it' being the 'social enterprise'). From that perspective, the how's, when's and who's need to be strategized. The good news is: our field is packed with strategic thinkers. Can you imagine the power of having the brains of all these extremely creative, amazingly determined and passionate strategic thinkers working together to strategize the best ways for bringing it to market? - 'It' being the 'social enterprise'.

But how do we use this intense brain power to effectively and promptly enact a strategy as it is being developed? Well, we talk about it; we discuss it; we collect input from pertinent parties; review it, and ’agree’ - even if it is implicitly - like a member of an association that implicitly agrees to the explicit agreements made by the association.

I don't think that we need to reach consensus in order to reach agreement. This is business! - Social business, but business after all. We need to work closer together and reach agreements as we keep on moving forward with our individual missions and organizations.

My proposal is that we use the tools that we have available to us to keep our conversations and agreements organized: the Internet. By collecting comments from key people interested in participating in the conversation, we will be having open-door discussions that will hopefully help us reach some agreements. It would be great, for example, if we could wordsmith a Social Enterprise Glossary of Terms so we can begin coding.

What then becomes critical is for these agreements to really disseminate to the rest of the community of people actively involved in creating positive social and environmental change using business practices. We need to make sure that we are all participating in the conversations: The Social Venture Network folks, the Skoll Foundation, the TED people, Social Earth, the Social Enterprise Alliance, The Hub, Ashoka, SOCAP, to mention just a few. Not only the gatherers, but also the doers, the funders, the academics and –critically important– the next generation – we are all part of this community of people actively involved in creating positive social and environmental change using business practices.

The goal is for all of us to become one voice, one brand! – A brand to which we all adhere, because we all agreed (sometimes implicitly). We need to strive to build a brand that is easy to recognize, easy to understand and easy to explain. We need to simplify and unify our voice and our message. It will be easier for the world to relate to us, and for us to relate to the world. We have a unique winner brand that has immediate implicit value: Social Enterprise.

As we define our branding, we will also begin to help define our positioning. Where do we fit in? How do we penetrate the market? Some social enterprise communities around the globe have already begun to engage in these conversations. I propose that we leverage on the work that has already been done and that we use it as a baseline for having our own conversations and reaching our own agreements. Read more about the work that has been done in other social enterprise communities around the globe.

So the whole 'code' deal is a proposal for organizing and documenting the conversations that may lead to reaching agreements as a community of people actively involved in creating positive social and environmental change using business practices. I'm hoping that we are able to quickly agree on a couple definitions, a few goals and that we let the conversations take us from there.

I often think of this process as a great opportunity for us, the community of people actively involved in creating positive social and environmental change using business practices, to create measurable social impact in addition to the work that we do every day.

It obviously is a huge opportunity for us to come out of our isolated trying-to-change-the-world-with-business space into a space in which we will be meeting, interacting, chatting and collaborating with other like-minded people who may be as interested as we are in changing the world with business.

But to be honest, at this stage of the game and with the state of things around us, I think is our responsibility to bring the social enterprise to market. We need to put it out there for people to grab off the shelf. Oh! And people grab it off the shelf, they will.

People will grab the Social Enterprise brand off the shelf because it is a good thing! It is a good thing for people; it is a good thing for profits; and it's a good thing for the planet.

People will grab it off the shelf because it will appeal to the student, to the consumer, to the legislator, to the funder, to the entrepreneur, to the employee, to the business partner, to us all!

And personally, I won't be offended if someone chooses not to grab the Social Enterprise. I think we need to bring it to market and build the movement off of it. I think it is our responsibility because we are doing it, we are actively contributing to the social enterprise apparatus - whatever that may be. We understand it a little better; and we've had the opportunity to test it, learn from it, observe it, think about it, fund it, discuss it, break it, glue it back together, reshape it, rethink it, and all of the things that we do and that we have been doing all this time.

My plan is to continue to explore ways in which I can contribute to this process. I invite you to join this exploration and begin to come out of your group's isolated trying-to-change-the-world-with-business space into a space in which you can meet, interact, chat and collaborate with other like-minded groups and people who may be as interested as you and I are in changing the world with business.

Open Source Social Enterprise Code

Today I decided that I would finally begin blogging. I had been thinking about it for a bit but it would never make it to the top of my list of priorities.

Maybe my apparent procrastination was because I was not completely clear about why would I write a blog, what would I say, why would anyone read it, and questions of the sort, that were important for me to clarify before embarking in such enterprise.

I was in the pool today and it became clear. Swimming is always a clarifying experience for me. It detaches me from it all, and it allows me to be truly introspective. The urban lifestyle is not always the most conducive environment for introspection. We are in such close proximity to everything and everyone that is hard to find space that is truly apart. I find this space in motion under the water. My thoughts stretch out to the rhythm of my stroke.

In this context, it is clear to me now that my blog is my scrap book. And it comes in extremely handy because I don't have a central space for random thoughts, analyses and ideas. I often jot something down on my iPhone or make a voice memo that later takes me months to transcribe. I'm not sure the lagging memos will come to an end now that I've decided to blog, but at least my transcriptions won't end up in multiple places. Bottom line: this blog is an organizing tool for me. It helps me keep track of the progression of my insights and to better create relationships among them. And as they become better informed, better processed and better structured, I would be composing some sort of "code" that I think is relevant at this stage of the Social Enterprise as a concept and as a movement.

But this is only the internal operational value of this blog. Externally, my vision is also that the information posted has social impact.

Different to the scrap book deal, a blog is not private. In fact, it is everything but - private. It's probably one of the most public intimate spaces (up there with reality TV shows and 24-hour web cams) in our social context.

I decided to take an Open Source approach to my "code" for Social Enterprise.

I have been massaging concepts and ideas that I think now are becoming clearer so I'm better able to explain my perspectives on them. As I reflect on my insights and build and design concepts, systems and strategies in my mind, I hope to inspire others to share their own perceptions in order to gain collective perspective. Hence the importance for my blog being Open Source.

Our collective understanding of "the Social Enterprise thing" will only become clearer as we all contribute with our individual understanding of it. The intention behind this blog is to leverage on the collective intelligence that could result from the individual contributions of our independent thinking.

I very much appreciate diversity. When I think of diversity I feel amazed by how unique and different each of us are. We all have our very own set of values and experiences. We have our own individual perspectives. I believe that by adding our individual perspectives and sharing them with the rest of us, we will all have a better informed, multidimensional view of any particular issue, concept, system, or strategy; and we will be better able to take prompt and appropriate action. The richness of human connections is to create common ground from what makes us different, for the benefit of all included.

An increasing challenge in a society that gets more massified and more global yet more inclusive is how to facilitate these conversations so they 1) include as many relevant perspectives as possible and 2) derive in actions. What is a collaborative method that responds to our current realities? How do we take advantage of the exponential power of collaborative thinking, which could lead to collaborative decision-making and collaborative action.

It is my hope that the sketching and shaping of this Open Source Social Enterprise Code helps facilitate conversations that help advance the Social Enterprise Movement everywhere.

At this point I'm not exactly sure what will be the expression of the "Open Source Social Enterprise Code", but I hope you join me in the adventure of figuring it out.