Social enterprises require help to improve marketing

Unless someone actually buys their products and services, they'll struggle to pay back investment, writes Nick Temple

Nick Temple
Nick Temple

It's been another few weeks of hype and hope in the world of social investment. The topic was on the agenda of last month's G8 summit; but there are still challenges for front-line social enterprises and charities in getting access to the finance they need.

Of course, if social investment and the G8 lead to more charities getting that finance, then we should be (and have been) supportive. But at times, the gap between what gets discussed at the G8 and what happens on the ground seems wide. It is becoming clearer that these are two distinct conversations: one at the G8 that is simply about investing in anything that will have greater positive social impact (or what is often called impact investment); and another about access to finance for third sector organisations (what we might call social investment and social finance).

What concerns me more, though, is the lack of time, resources and support being focused on a key part of the wider social economy: the markets. Or to put it more simply, we can support these enterprises to the point where they are ready for all sorts of investment, and then invest in them - but unless someone actually buys or pays for their products and services, they will soon struggle to pay it back. And yet by far the biggest current focus is on the first two parts of this equation, not the third.

Without incurring the wrath of my colleagues by revealing any spoilers, our forthcoming biennial state of social enterprise survey will again demonstrate - as in 2011 - that the three key markets for social enterprises are the general public, the public sector and the private sector, with the general public the primary source for most and other markets growing in importance.

So what should we be doing to increase the numbers who buy and procure from the social sector? In the public sector, we need to use the Public Services (Social Value) Act 2012 to raise awareness and have a different set of conversations - it's not perfect, nor as strong as we might like, but it is changing the agenda with a cross-section of commissioners. With the private sector, look and work for (long-term) business in the supply chain and don't get the begging bowl out.

With the general public, it is not only about raising awareness, but also about investing in and improving marketing. One thing that our survey will reveal is that social enterprises are concerned about their own access to marketing skills and tools, and we must work to help them address this.

But social investment is predicated on making better use of existing resources - similarly, the market that we should be growing faster than any other is the social sector itself. Our council of members recently debated the need for social enterprises to trade ethically and demonstrate their values in how and what they buy, not just in what they do. If we are really about maximising social impact in everything we do, we should buy social - get different stationery, book a third sector venue for training, check the coffee is fairly traded, and so on. That is something we can all do tomorrow, with or without the attention of the G8.

Nick Temple, director of business and enterprise at Social Enterprise UK

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