Tag Archives: community enterprises

Resurrecting a positive role for the much-maligned notion of ‘social capital’

‘Social capital describes the networks together with shared norms, values and understandings that facilitate cooperation within or among groups’ (OECD, 2001)

I want to put out a call for the rehabilitation of what we understand by ‘social capital’.

Recent criticism of the essential concept of social capital has caused people to cast it aside – considering it a redundant approach.  Several influential academics on the left of the political spectrum have written books and articles criticising social capital. Their criticism became particularly virulent at a time when the World Bank formed a social capital strategy in their assistance to developing countries.

In short, the main thrust of the criticism was that the notion of social capital was being used as a substitute for not materially helping populations.  Communities were being told that…we know you are poor, downtrodden and disadvantaged but you have ‘social capital’ and you should be using that more.

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Social impact and the argument against unqualified ‘growth’

In connection with business and the economy, we hear a lot about ‘growth’.

Economists argue that the economy has to grow year on year.  Investors claim that businesses have to continually grow as the alternative is for them to stagnate and get overtaken in an increasingly competitive market.  Even social enterprises are being pressed into ‘growing their business’ – usually in business terms such as increasing turnover, improving profits, increasing staff and, generally, expanding market share.  It would appear that the winners in the pervading and traditional economy are the enterprises that are growing and, if you are not growing, you join the losers.

I want to challenge that idea when it is applied to ‘social and community enterprises’.  I shall argue that social economy organisations are different from mainstream businesses as their core ‘business’ is achieving an essentially social or community goal.  Therefore, they should operate differently – making different decisions for different reasons – and ultimately judging their success or failure, not in terms of growth, but in terms of positive, qualitative social change.

I suppose what I want to say about ‘growth’ is not particularly new.  Barack Obama has said…

Trade has been a cornerstone of our growth and global development. But we will not be able to sustain this growth if it favors the few and not the many.
[Speech in Berlin, 24 July 2008.]

He was talking fundamentally about sustainability.  Interestingly, this contrasts significantly with Benjamin Franklin one of the Founders of the USA, who several centuries previously, stated…

Without continual growth and progress, such words as improvement, achievement, and success have no meaning.

Indeed, the context was quite different in Franklin’s time and the world was not hurtling towards climate change and potential environmental Armageddon.  Thus, the historical context matters in how we consider concepts such as ‘growth’.

In 2009 Tim Jackson wrote Prosperity Without Growth: the transition to a sustainable economy. The second edition, Prosperity Without Growth: foundations for the economy of tomorrow was published last year (2017).  In it, Jackson sees enterprise as a ‘form of social organisation’ with work representing participation in society where money should be used for the ‘social good’ – reducing inequality and supporting ecological stability.

This appears to me to be very close to what the pioneers in the social enterprise movement talked about.   There has to be an alternative way of looking at the economy which is inextricably linked to notions around creating zero waste through recycling and working towards a more ‘circular economy’.

I know of a number of social and community enterprises that responded to the urge to grow.  They have tended to assess their success in increased turnover, improved surplus or profit, and in recruiting more staff.  These are ways in which a traditional business measures their success and quantifies their achievements.   But what of improving the quality of the social change that happens as a result of what they do?  Is that to be sidelined in the drive for business success?

With community enterprises, in particular, growth can be difficult.  They are community-based, often operating within a particular locality, and with no intention of growing through domination or expanding into other areas.  They are often owned by the community to create community benefit on behalf of that very same community.  They want to get better at what they do and make a difference to local people by working closely with local residents.

The Scottish Government published its Social Enterprise Strategy earlier this year.  I was interested to see that it recognises the wide community-based nature of social enterprise in Scotland – often operating in financially perilous waters.  To its credit, it does not bang on about ‘growth’ and in terms of ‘scaling up’ social enterprises.  It states…

In increasingly competitive and uncertain markets, scale can be a weakness as well as a strength. For social enterprises, it may become increasingly preferable to scale capacity and impact through partnership rather than pursuing an organisational growth strategy. Collaboration, franchising, and replication will all come into sharper focus.

The last sentence of this quote is crucial.  It highlights the need for collaboration – implicitly in place of competition; and the role of looking to replicate practices in another place.

However, there lies a danger in both of these: collaboration is difficult to foster when funding and investment are usually distributed through highly competitive structures.  Similarly, replication is problematic due to varying contexts – what works in one place will not necessarily work in another, or certainly not in the same way.

Within the social economy, I believe, we should be doing enterprise differently and one example of this is that collaboration should be encouraged to replace overt competition.  Admittedly, this is a controversial notion and difficult to achieve but it is central to working together for the common good.

Another area where we should be doing things differently in the disputed arena of ‘social impact’.

Social and community enterprises trade in exchanging goods and services.  They do this to achieve a central aim of improving people’s lives; not adversely harming the environment; in changing behaviours or influencing cultural norms for the betterment and well-being of all.

So how do they know whether or not they are successful?

The Social Audit Network (SAN) has been working in this area of impact and subsequent accountability for a long time.  It believes that social enterprises should report on their social and community achievements on a regular basis.  At the same time, social enterprises should check on their internal aspects or social enterprise credentials.

In summary, these credentials are: being good to their staff and volunteers; being accountable through appropriate governance; not making individuals wealthy at the expense of the wider society; ‘washing their face’ financially; being environmentally responsible, and helping the local economy along…

SAN also believes that social reports should not be used primarily for marketing and that they should be subjected to some form of audit that checks facts and interpretations made in these reports.

Some form of social accounting and audit (SAA) is required urgently by the social enterprise movement.  SAA is an alternative way of doing things – recognising that working towards social change is a different aim, and cannot be measured in financial terms or in terms of business growth.

Social accounting is not about money.  It is, crucially, about how a social or community enterprise can be accountable – and importantly – held to account for what it is trying to do and what it is trying to be, in social, environmental and cultural terms.

In conclusion, I have always believed that in the end, the future of social and community enterprise will come down to how accurately they gauge their success and how they report this differently, but not entirely different, from traditional business.

We have to not only create a new way of seeing the world’s economy (as referenced in Prosperity Without Growth), by getting in place more appropriate mechanisms that suit an alternative way of doing business.  That includes social funding, social management, social accounting, social capital, social enterprise planning and so on…

So, ditch unqualified growth and get busy at doing things differently.  A possible New Year’s resolution?

Alan Kay
Social Audit Network (SAN)
www.socialauditnetwork.org.uk

Social impact and our peculiar understanding of ‘community’…

Many social enterprises, and perhaps more accurately, community enterprises, say that they are having an impact on The Community.  But do we really understand what we mean when we talk about ‘community’?

I have been involved with a number of EU funded projects over the years and conversations with European partners turns to semantics and discussion on whether or not there is a shared understanding of some of the major concepts that we in the UK bandy about with abandon.

One of those, and one that often forms a bit of a stumbling block, is the word ‘community’.  The Germans say it is untranslatable; the French use it in other ways; the British say it all the time in the hope that the others get their meaning.

Turning to definitions, the Oxford Living Dictionaries states that it is, ‘a group of people living in the same place or having a particular characteristic in common’, which implies a ‘geographical community’.  But it also goes on to say that community can be, ‘the condition of sharing or having certain attitudes and interests in common’.  This suggests more of a ‘community of interest’.

These discussions remind me of when I worked with community businesses in Scotland in the late 1980s.  Talking about a geographical community made sense as local people in hard pressed areas got together, formed an enterprise that created benefits for the locality by providing employment for long term unemployed and much needed services to benefit residents in the area.

But then ‘community of interest’ emerged.   This broadened the definition and at one meeting we realised that a golf club could be a community business serving the ‘community of golfers’.  Was this right?  And so the argument continued within, in those days, a smoke-filled room of activists…

Added to this are two critical dilemmas worthy of consideration.

The first is that ‘community’ is not a homogenous unit.  Within a geographical area there are a range of different people with differing values, outlooks, social and economic status, faiths and ethnic groupings.  How do we, as community-based organisations, whose central purpose is to work for community benefit, serve the whole community?

What are the priorities; how are they decided; and so on?   Local people on a Board of a community enterprise would be expected to understand the local community better than an outsider – but they may have their own interests and views that may not address the problem of all people living and working in the community.

The second is how the geographical community is defined.  Where are the boundaries outlining the community?   For some communities this is relatively straightforward as they may be islands, or particularly remote and self-defining, or they may be a housing estate squeezed into an area bounded by a major road or railway line.  But for many community based organisations this is an issue and one that has to be tackled and re-addressed.

Many community enterprises over the years have tried to report on the impact that they have on their community.  If they keep social accounts they are expected to draw out a local stakeholder map that charts the nature of the relationship they have with different stakeholder groups.

This is an exercise that many find particularly useful as it exposes many in their organisation to the dilemmas mentioned above.  Often there is not total agreement, but the discussion over stakeholder relationships can create a better understanding of differing positions within and around the organisation.

Also, as part of social accounting, there would be a need to consult or engage with the ‘community’ – some refer it to as the ‘wider community’.  This presents a problem as the community may be made up of thousands of households.  Through my involvement with social accounting and audit, I have tried to do and suggest a number of things.

One time we worked with a community enterprise in carrying out a survey that involved a questionnaire going to each household distributed in a community newsletter.  The returns were few.

Another time we worked on visiting a random selection of households in an area and conducted interviews.  This was more successful but fraught with difficulties over people being out, not wanting callers, not to mention fatigue and a wearing down of shoe leather…

However, something that did seem to work well, was the creation of a kind of ‘community jury’.  The community enterprise identified a local councillor for the area; a head of school, a local social worker, a prominent business person, a faith leader, a local MP.  These were people who were not close stakeholders but who would know about the community enterprise and a little about its work and impact.

Ideally this group would be brought together and issues about the performance and impact of the community enterprise would be discussed.  In practice this was very hard to achieve and the fall-back position was to interview these people with the same questions.

The consultation and engagement with a ‘community of interest’ may be clearer in some ways, as the community enterprise may only be consulting those people that have expressed an interest in what the enterprise is trying to do.  But that leaves out all the people that could be in the community of interest but do not know about or have never used the services provided.  Difficult or what?

I think defining and understanding ‘community’ is crucially important.  At a meeting several years ago a prominent member of the social enterprise sector in Scotland was asked what he thought was the future of social enterprise.  He said he thought it would be ‘community based enterprise’.  This harks back to the burgeoning community business movement in Scotland in the 1980s – plus ça change, plus c’est la même chose

I also think that community enterprises are going to be more and more important.They tend to be tenacious organisations due to their close connections within communities.  This is evidenced by the number of community co-operatives in the Highlands and Islands that are still around in one form or another.

Community enterprises are also like ‘anchor organisations’ – a conduit for local development.  They usually have a clearer purpose compared to the plethora of recent social enterprises that are currently emerging – which are not community-based and struggle to show their distinction from being traditional businesses with a philanthropic arm.

Finally, we all live in ‘communities’ in one form or another.  We are not only individuals but part of something that underlines the connections and relationships between us that make life worthwhile.  I leave you with a quote from Cesar Chavez (1927 – 1993), an American labour leader and civil rights activist…

We cannot seek achievement for ourselves and forget about progress and prosperity for our community… Our ambitions must be broad enough to include the aspirations and needs of others, for their sakes and for our own.

Alan Kay, Social Audit Network (SANwww.socialauditnetwork.org.uk