Opinion: Craig Dearden-Phillips, founder and chief executive of Speaking Up

The social enterprise ambassador defends the movement against charges that it is simply hype, and stresses that any organisation can join in.

My opportunity to see what charities thought of social enterprise came in a recent live public debate in Essex on whether it is just a load of hype, with me against Debra Allcock Tyler of the Directory of Social Change.

The news wasn't great for the social enterprise sector. After listening to both sides, more than two-thirds of the audience agreed that social enterprise is all hot air. Clearly I was bested in the debate, but the evidence suggests that charities are not sold on social enterprise.

The movement is seen by many as a threat to the basic 'brand' of charities. Charities are still the premier 'for-good' institutions: the public understands, trusts and donates millions of pounds to them each year. Critics of social enterprise allege that our mantra - "for good, but also for profit" - leaves the door open to charlatans. Indeed, Allcock Tyler's challenge to social enterprises is this: why not just become charities and leave it at that?

A second complaint is the favoured-son status that social enterprise enjoys with the Government. Some see indecent political toadying. Like snake-oil salesmen, social enterprise offers an alluring but vague new formula that promises much but has, so far, delivered little - except, of course, big bucks being deposited by the Government into new funds for social enterprise projects.

A third objection is to bringing business disciplines into the charitable realm, which attracts great suspicion. Key performance indicators, they argue, are fine for management consultants, but not for a youth centre in Hull.

As one of the Government's 33 social enterprise ambassadors, and also the founder of the charity Speaking Up, I live in both worlds and find the stand-off between sectors depressing.

There is no blinding distinction between social enterprises and everyone else. The income of many charities comes from trading, and thousands of charities are run in a businesslike way. Tremendous numbers now have major business partners. More than 60 per cent of social enterprises are charities, for heaven's sake. Conversely, many social enterprises are risk-averse and suspicious of big business. Some are poorly managed and a good many rely on grants more than you'd think.

Social enterprise is about innovative entrepreneurship, new solutions to old problems and new models that blow the old away. Social enterprise isn't a sector - it's an activity. The real divide is between organisations that are entrepreneurial and those that are not. The socially enterprising camp includes some of the larger charities, many small local ones and some that are just good at getting grants and donations.

So what of Allcock Tyler's challenge to social enterprises to become charities? Well, 62 per cent are registered as charities, so it's not always a case of either/or for many organisations. Identifying yourself as a social enterprise is about your commitment to earning more of your own income and adopting business disciplines.

For many, being a charity is not the right format. Some organisations need to offer share capital to attract institutional investors, or wish to sell 'equity shares', such as community services company ECT Group. Others are primarily businesses for which profit has to be the focus to achieve social outcomes.

Social enterprise will become more important as resources become more scarce and society's problems more entrenched. Social innovation is vital if we are to achieve breakthroughs in educational achievement, health and social isolation. Whether they are achieved by a traditional charity or a whizzy new community interest company, I do not care.

- Craig Dearden-Phillips is founder and chief executive of Speaking Up.

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