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’. The Greater Manchester Local Industrial Strategy sets out an objective to ‘create the conditions in which co-operatives and social enterprises can thrive’.
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. 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 16th 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 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!
SAN Vice Chair