OPINION: Thinkpiece - France's social enterprise has lessons for us

GRAEME LINDSAY, professor of marketing, AUDENCIA Nantes Ecole de Management

In a country where wine takes decades to mature and your restaurant order can take an eternity to arrive, it should be no surprise that it has taken France 100 years to recognise social enterprise. But like the intricate flavour of a fine Nuits-Saint-George, it has been worth the wait.

Since 1901, there has been only one type of non-profit organisation in France - associations. These were created on the principle of members as the only sovereign stakeholder, enshrining in law the Republican value of free association. Normally they cannot raise funds in a systematic manner but rely on members' fees, volunteers and occasional "unplanned donations". However, there is no requirement for associations to exist for the "public benefit". Even though some such as Medecins Sans Frontieres resemble UK charities in that they exist to help third-party beneficiaries, the organisational form is identical to that of the many sporting clubs.

By ensuring a tight organisational and governance framework, there is no need for a myriad of guidelines, or a regulator. What is not allowed is social enterprise. A "non-profit business

is a contradiction. Entrepreneurial activity must take place in the private sector.

But by the 90s, the French government recognised the need for social enterprises. A simple solution might have been to remove the 1901 restriction regarding remuneration and raising funds "in a systematic manner". But this could have undermined the sovereignty of members and destabilised the sector. Instead, the French government created a completely new type of organisation called Societes Cooperatives d'Interet Collectif (SCIC). So long as they operate for the public benefit and are governed by a coalition of stakeholder groups, SCICs can operate as businesses.

What makes SCICs of interest to the UK non-profit sector is this multi-stakeholder dimension. Only by basing "shareholding

on the voting rights of multiple stakeholders rather than distribution of profits can there be confidence that social benefit is being secured without the need for continual assessment of an organisation's objectives and activity. This provides new potentials and new ways of working for non-profit organisations.

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