Martyn Drake: Caught out trying to define social enterprise

Are you trying to create a social enterprise or are you trying to become a more commercially effective and sustainable charity?

Martyn Drake

I’d been invited to do a guest lecture on a non-profit MSc programme, to talk about earned income, creativity, and innovation.

It’s a topic that’s right in my wheelhouse: it’s the stuff I help major charities with all the time and can talk about for hours.

So, in typically overconfident fashion, I pulled a few slides together on the morning of the session, grabbed some copies of my book to hand out, and hopped on the train from Nottingham to London.

It was only as we passed through Leicester, when I was thinking about how to open (always start with a funny story), that I looked back at the course title to gain some inspiration, only to see it was called “social enterprise”.

As we all know, social enterprises are start-ups. Small, mission-led, non-profit businesses; community theatres, activity centres, cafés and the like. Local... social… entrepreneurial.

I know enough to talk about them, but most of my personal experience is in developing commercial ideas within a large-charity culture, which comes with a whole different set of rules and challenges.

Realising I might have missed the brief, it dawned on me that all my slides, insightful examples, hilarious jokes, might be completely irrelevant.

I wondered if I should cobble a new set together, or maybe just wing it, as Luton Airport Parkway flashed past the train window.

I checked on my notes from the call with the organisers: “40 to 50 people, most of them working in the charity sector, talk about growing earned income, trading, innovation etc.”

That sounded right, but the title still threw me. Charity leaders talk to me all the time about diversifying and developing new income streams, becoming more commercially savvy, more agile, and occasionally in hushed tones, more entrepreneurial. 

But none of them would ever describe themselves as social enterprises. Were they wrong? Was I wrong?

As the train pulled into St Pancras, I pulled out a copy of my book and flicked through the index at the back.

Surely, I thought, I must have answered this question somewhere. I was bound to have written some genius quote or other about the difference between charities and social enterprises. 

There were two entries.

I had written a 200-page book on charities and commerce and mentioned social enterprise a grand total of twice, both times only in passing.

Feeling more uncertain than ever, I arrived at the university and grabbed one of the course leaders to quietly ask a question: “I’m guessing you’ve been through this in the course already, but do you have a definition of what a social enterprise actually is?”

“Ah.” he replied, furrowing his brow, “Funny you should ask. Kind of. We have a definition based on five criteria, but I don’t think any of us is really comfortable with it.”

And so, as I walked into the lecture room, to meet 40 people who’d spent the previous two days studying social enterprise, I realised that my journey down there had become my opening story, and that story led into my opening question: “How do you define social enterprise?” 

An awkward silence was broken by one brave soul answering: “We don’t really have a definition, at least not one that’s very helpful.”

And it’s true: the definition wasn’t helpful because the term itself wasn’t helpful.

They wanted to do what most charities want to do: to develop more sustainable, profitable earned income streams, not start up a café.

They needed to learn about purposeful innovation, about trying things, failing, and trying again until you find stuff that works, stuff you can do better than everyone else out there so you can charge a premium for it, and therefore stuff that almost by definition leans into the core strengths and expertise of your organisation.

Which ultimately means taking everyone in the organisation with you on the journey, which is why language is so incredibly important.

Are you trying to set up a sideline to cover a fall in fundraising, or are you aiming for a commercial route to increase impact and make money along the way?

Are you trying to create a social enterprise, or are you trying to become a more commercially effective and sustainable charity? 

Which of those statements will bring your people with you? 

And so, back in the classroom…

“OK,” I ventured, “Let’s try this. Hands up if you’d say you work for a social enterprise.” One hand went up. “Hands up if you’d say you work for a charity.” All the hands went up.

“Brilliant,” I said. “Now I know exactly where to start.” And off we happily went into the world of commercial charity opportunity.

Martyn Drake is founder of the management consultancy firm Binley Drake Consulting

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