Focus: Finance and Governance - Outlook - Social enterprise: new spin, old story

Paul Palmer, professor of voluntary sector management at the Centre for Charity Effectiveness in the Cass Business School.

Social enterprise is seen as the panacea for a variety of problems, but to many it remains an uncontested phenomenon. There are alternative ways of thinking about social enterprise, of course. I make no pretence of balance in this article, which is a summary of these opinions, but I hope it will lead to a healthy debate.

The first argument focuses on the academic and professional knowledge base that underpins social enterprise and social entrepreneurship. Compared with, say, sociology, where is the theory for social enterprise? How can social entrepreneurs begin to compare themselves to a profession that regulates itself through systematic, required training and collegiate discipline, has a base in technical, specialised knowledge and has a service rather than profit orientation enshrined in its code of ethics?

Developing this reasoning further, where are the evidence-based studies to support claims that social entrepreneurs have developed innovative approaches? Are they any different from 19th-century figures who could equally be described as social entrepreneurs, such as Robert Owen, or business people with a social orientation, such as Sir Titus Salt or Joseph Rowntree?

The problems of the UK in the mid-19th century were just as complex as those of today, so why are we not looking to learn from this rich seam of voluntary action history?

Traditional concepts of voluntary non-profit organisations have been determined by the definition of charity and the 20th century relationship with the state. This status is enshrined in law and has been built upon the notion of the charitable trust, once a radical vehicle, initiated in the 16th century to encourage the wealthy to be charitable, following the demise of the church and the failure of the state to deal with the social problems of the time.

Case law, determined mostly by tax cases and the prudent actions of the Charity Commission, has resulted in a conservative legal vehicle. Would it not be sensible to allow what was originally a radical vehicle to re-establish itself with appropriate tax reliefs and governance structures?

Is social entrepreneurship really just a new spin on an old story? Deep down, does it not just reflect a dislike of the terms 'charity' and 'philanthropy' by its advocates? These same people hark back to the critique of the Poor Law by Sidney and Beatrice Webb. The founders of the Fabian Society hated the Charity Organisation Society. Do their modern successors still harbour a deep-seated resentment of the foundation world? If so, social enterprise becomes just a non-guilt-based substitute for charity.

KEY POINTS

- Social enterprise is seen as the answer to many problems, but the concept is rarely challenged

- Social entrepreneurship is not as innovative an idea as is widely believed.

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