Social Enterprise: To define or not to define?

The murky topic of what is or what is not a social enterprise stirred again this week as SEC announced support for a social enterprise mark.

The new mark – in the mould of the Fair Trade mark or Soil Association certification – offers a stamp of approval for those operating as social enterprises. I must confess to a sense of foreboding when I first heard about this.

So what’s the problem? Well, yes it is good to have a framework to understand social enterprise – certainly what are the principles or values behind it. This benefits advocacy and wider dissemination.

But any rigid definition is counter-productive.

The nature of social enterprise blurs traditional boundaries. One size clearly doesn’t fit all. There are many legal structures available to social enterprise – we’ve counted nine in the UK! – and this indicates a broad and diverse church. The diversity multiplies if you consider types of social enterprise across the globe.

Definitions also tend to channel attention and energy to who’s in the club and who’s not and so can limit the potential of the movement. Liam Black and Stephen Sears being asked to stand down as Social Enterprise Ambassadors is one example of this.

On the ground it is also confusing. Social entrepreneurs should be encouraged to dwell less on whether they are in the club and more to how they will achieve their mission and serve their beneficiaries.

Do we have a definition for social enterprise? Yes - it's here if you are interested. You'll see it's inclusive in scope. Our belief is that social enterprise is best thought of as a model or architecture. And it's the outcomes that really matter.

More about defining social enterprise at: UK government definition:
http://www.sel.org.uk/docs/WhatIsSE.pdf

Paper in support of more precise definitions:
http://www.skollfoundation.org/media/skoll_docs/2007SP_feature_martinosberg.pdf

Cadbury: Mainstreaming social enterprise

Last week Cadbury announced that it will source fair-trade ingredients for all its dairy milk chocolate. Great news for cocoa farmers in Ghana.

This is also a great example of how private sector firms can support the mainstreaming of social enterprise - fair trade being one of the many different faces of the social enterprise movement.

I like this deal because at is heart is a win-win for both sides. This is not actually about corporate social responsibility (even if this was developed out of Cadbury’s CSR team). This is a business deal and a way for Cadburys to retain and build market share through ethical branding.

Some of the comments this week have questioned whether there will be negative effects on pure fair trade producers such as Divine. Apparently, Café Direct’s sales dropped 5% as supermarkets started retailing their own fair trade brands.

However, this misses the point. We need the large retailers to adopt fair trade sourcing to enable the positive benefits of fair trade to be spread most widely.

Divine still has a part to play. I suggest it’s not because they are a ‘true’ social enterprise and reinvest profits, as a Divine spokesperson commented this week. Divine can be proud of the work that it has done for 10 years now and recognise the competitive advantage that this head-start gives them. I would encourage Divine to talk - and keep talking - about the quality of its chocolate products. This is one of the key ways for Divine to be successful in increasingly competitive fair trade marketplace and to continue to create social impact in the long-term.

Other comments on this at:
http://www.divinechocolate.com/news/04032009073247.aspx
http://www.guardian.co.uk/lifeandstyle/wordofmouth/2009/mar/04/fair-trade-cocoa-cadbury?commentpage=1&commentposted=1
http://www.independent.co.uk/news/world/africa/cadbury-adopts-fairtrade-source-1636575.html http://www.cadburydairymilk.typepad.com/?campaign_id=ukhcm