Let there be light on the world of social enterprise

Transparency can help us all to see our own areas to improve, as well as those of others, writes Nick Temple

Nick Temple
Nick Temple

August is traditionally the quiet month for news, but this can be an opportunity for charities and social enterprises: in the summer months it's possible to get coverage for topics that might never happen when the political and football (and political football) seasons kick back into action. This summer, however, the sector has been in the media not at its own behest, but because of stories about executive pay and zero-hours contracts.

What struck me about the resulting conversations from this coverage was not so much the strength of views on different sides of the debates but that both sides were concerned with the internal operations of organisations, rather than the external outcomes or impact of their activities. This is something that Social Enterprise UK has always been interested in. We believe a social enterprise should be able to say "we are transparent about how we operate and the impact that we have".

The key word here is 'transparent': it gets bandied around by government, business and think tanks, but this is the sort of practical area where it can actually mean something: there will always be dissenting views on how much a chief executive should be paid, but people can make their own judgments if they have the information - and I acknowledge that many social enterprises (including SEUK) and charities have some way to go on this.

The relevance to the world of social investment is threefold: first, the social investment marketplace can improve its own transparency in the information it makes available, to improve access and help sector organisations to navigate and understand what is out there. We are working with the Social Investment Forum in exactly this area, sharing good practice and raising standards so that information about finance, people, processes, mission and approach to impact are more easily visible to front-line organisations.

Second, transparency of data will help improve the broader understanding of what is actually happening in the world of social investment. Opposing sides can shout "hype" or "hope" till the cows come home, but aggregated, anonymised and analysed data of the types and number of deals taking place will provide a sense of reality and credibility to the field that after-the-fact research always struggles to achieve. Rupert Evenett and Karl Richter's Engaged X project is looking at exactly this challenge, and rightly attracting widespread support.

Third, transparency can highlight where our sector's endowments, reserves and funds are currently invested - as with remuneration and employment terms, every organisation will have its own reasons and rationales for particular decisions, but it would be good to have a broad understanding of where and in what different organisations invest, be it dark green, light green, pro-social, anti-social or some other hue. If we are encouraging socially motivated procurement (such as the Buy Social campaign) or fair recruitment and employment policies (such as the Phone Co-op becoming an accredited living wage employer), then investment by the sector should also be included.

It matters for the same reasons that the other internal operations matter: it's about trust, credibility, living by our values. Transparency can help us all to see our own areas to improve, as well as those of others. As a wise man once said: "Sunlight is the best disinfectant."

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

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