Social enterprise at a crossroads

Social enterprise is a political favoured son - but what does it really mean? Helen Warrell talks to experts about defining the concept

Social enterprise could be on the verge of an identity crisis. The news last month that a flagship social business, the ECT Group, had sold its recycling arm to a private company (Third Sector Online, 9 June) and that support services firm Serco was considering joint contracts with social enterprise partners (Third Sector Online, 20 June) raises new questions about what social businesses are and how they can protect their values.

One organisation helping to define key enterprise credentials is the Charities Aid Foundation's specialist finance provider Venturesome, which announced this week that it has identified three definitive types of UK enterprise. The models, which are based on the degree to which an organisation's trading activity is linked to its social impact, will help donors, investors and commissioners understand how enterprises make their money and where the potential risks are. The report emphasises that, as the number of organisations labelled as social enterprises increases, it is becoming urgent to agree common definitions.

Meanwhile, the Social Enterprise Coalition has commissioned a survey to establish the "language, values and identity" of social enterprises. Entrepreneurs themselves are also starting to ask whether the movement is clear enough in stating its principles.

Adele Blakebrough, chair of social enterprise support organisation Can's Breakthrough advisory panel, says part of differentiating social business from mainstream business is being clear about what you want to achieve.

"There is often not as much clarity as there should be," she says. "A lot of organisations have hidden behind the confusion. Social enterprises at least need to specify what their added value is."

Critics of the move to define social enterprise counter that trying to pin down what it is could work against the movement's greatest strengths - being adaptable, flexible and innovative. Even Blakebrough balks at the idea of regulation to force enterprises to identify their values.

But Paula Howden, director of enterprise and projects at south-west enterprise support group Rise, says that without further definition social enterprise is at risk of being contaminated by imitators.

"There is a problem with people self-selecting themselves into the social enterprise fold without any checks, and the movement is open to that," she says.

Rise's solution is a social enterprise kitemark, which has so far certified nine businesses as official social enterprises. Keen to expand this, Peter Holbrook, one of the Government's social enterprise ambassadors, has launched a petition calling for a nationwide social enterprise standard.

"One aspiration of the ambassadors scheme is to improve public understanding of social enterprise," says Holbrook, who is also chief executive of community enterprise the Sunlight Development Trust (see Feature, page 18). He is dismissive of those who are scared by the work involved in creating a new standard: "Trying to define the criteria is a challenge, but that shouldn't put us off."

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