Keeping the ‘social economy’ on the right track

I believe that the proportion of our UK economy intended to make a profit for people other than investors or owners is growing.

The concept of a ‘social economy’ is also gaining traction in public policy – the West Midlands Combined Authority proposes a ‘model of economic growth that impacts positively on all our residents and communities’[1]. The Greater Manchester Local Industrial Strategy sets out an objective to ‘create the conditions in which co-operatives and social enterprises can thrive’[2].

This social economy is made up of a rich diversity of enterprises and organisations, including – co-operatives, mutuals, associations, foundations, social enterprises and charities, sharing many common values and features, such as, for example: trading which prioritises the social objective over financial; voluntary and open membership; democratic forms of governance; and reinvestment of most of the profits to carry out social purpose objectives.

However, at the heart of the social economy, there’s a difficult balance to be achieved for social enterprises – too much focus on the ‘social value’ can have a negative effect on the ‘enterprise’ which keeps the business financially sustainable.

Too much focus on the money and the ‘social’ benefit gets lost. The economy isn’t ‘social’ at all.

It’s as if you have to follow a train track – one side gets stuck and the train derails.

Keeping financial accounts is mandatory – so looking after the money is easy.

‘Social’ Accounting and Audit can be the way that social economy organisations revolutionise the way that they work and manage their business[3]. Quite a claim from the Social Audit Network (SAN) but what does it really mean?

Social Accounting and Audit is a process that creates a flexible framework for an organisation to:

Prove – report on its performance

Improve – provide the information essential for planning future action and improving performance.

Account – fully for its social, environmental and economic impact

It enables us to understand the impact an organisation has on its community, and on those people and other organisations who are directly involved with the organisation or who access its services.  At the same time, accountability is promoted and weaved into the process by engaging with the organisation’s key stakeholders.

The main benefit to an organisation is the ability to prove its value and to improve its performance! Proving and Improving has become a popular mantra for social enterprises since the phrase was neatly coined by the Quality and Impact Project of the Social Enterprise Partnership.    However, the ‘Prove and Improve’ mantra can overlook that other essential dimension of the process of social accounting: accountability – being accountable to stakeholders.

I could write more about how valuable the social accounting process is for organisations in the social economy to keep on track; but to find out more, meet organisations who truly do ‘prove, improve and account’, and hear from experts in the sector, join us at the SAN Annual Gathering.

Hosted this year on Wednesday 16^th October at the aptly named Impact Hub Birmingham, the SAN Gathering will bring together a huge range of people with a shared interest in social impact, social accounting or social enterprise.

Starting at 10am, the event will provide an opportunity for connection, reflection, planning and shared learning. It will include:

• Facilitated networking
• Keynote ‘state of the sector’ speakers
• World Café discussion
• Practical workshops and masterclasses facilitated by SAN Directors.

Please book your place at https://www.eventbrite.co.uk/e/gathering-of-the-social-audit-network-2019-tickets-64196148408

SAN will be joined by Liz Tapner of SELNET[4] in Lancashire – the 2018 Most Influential Woman in Social Enterprise, who will be sharing her experiences and tips for running a successful business in the social economy.

Liz knows how to keep social enterprises on the right track!

Anne Lythgoe
SAN Vice Chair

[1] https://www.wmca.org.uk/what-we-do/public-service-reform/

[2] https://www.greatermanchester-ca.gov.uk/what-we-do/economy/greater-manchesters-local-industrial-strategy/

[3] www.socialauditnetwork.org.uk

[4] https://selnet-uk.com/who-we-are/the-team/

 

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Social investment and the eradication of poverty

The Social Metrics Commission recently issued the report on their work to measure poverty in a more meaningful way. They estimate that 14.2 million people in the UK live in poverty, including 4.5 million children. These stats are shocking and underline the vital role of so much of the charity sector and social economy, working in many ways to address the root causes or the effects of poverty.

Big Society Capital (BSC) believe that social investment (i.e. repayable finance used to create impact) can be (a small) part of the solution alongside the social economy sector’s other funding sources. Money provided upfront by social investors is used by social enterprises and charities to finance income-generating models so that they are able to make a greater difference in addressing poverty.

Emancipation from the need to prove…. how social accounting can break the shackles of burdensome reporting

A couple of weeks ago I attended the first ever National Social Prescribing Network Research Conference at the University of Salford. Currently engaged in attempting to understand the nature of social prescribing across Greater Manchester, I found the conference both informative and inspirational.

I didn’t expect to be struck with a need to speak out about the obvious link (well it’s obvious to me…) between social prescribing and another of my ‘social’ interests – social accounting.

Social prescribing is a means of enabling GPs, nurses and other healthcare professionals to refer people to a range of local, non-clinical services. This approach is gaining momentum as an alternative to clinical care and prescribed medicines.

Social Impact and Inequality

“As long as poverty, injustice and gross inequality persist in our
world, none of us can truly rest.” Nelson Mandela

Inequality is a difficult topic to understand and tackle but it seems to be increasing in a relative sense and surely has to be addressed by all those working for a fairer society – that includes those pushing for a wider and more effective social economy.

According to the OECD, the average income of the richest 10% of the population is about nine times that of the poorest 10% across the OECD, up from seven times 25 years ago. (OECD).

There has always been income inequality but as the world becomes more and more interconnected, the divisions between those that ‘have’ and those that ‘have-not’ is increasingly widening.  And this has a knock-on effect where the disparities in income translate into disparities in wealth – raising the question, who owns our world?