Anyone who has been around the social sector for the past 30 years should be aware of the idea of systems change – it’s not new. But there seems to be a renewed interest in it at the moment, partly through Catalyst 2030 starting up in Australia.

Changing ‘systems’ is not a quick fix. The global systems we live with have been in the making for many years through the interplay over time of political philosophy, economic theory, ideology, theology and financial practices. These are all ingredients in the world’s current major systems –neoliberalism, capitalism, fascism, communism, or socialism.

It is not possible to understand what is happening in any of these systems by looking at their individual parts. To understand what is happening we need to understand how the different parts of the system interact and affect each other, which actors are affecting the system and what motivates them.

But how do you do that?

We propose two practical ways to get to to grips with systems change: combining ‘Critical Theory’ with the ‘power and systems approach’. Through that combination we can engage with global systems at a local level. The process must involve self-reflection as much as reflection of the external system we seek to change.

Top take-aways

• Activists need to become better ‘reflectivists’, taking the time to understand the system before (and while) engaging with it.
• We need to be clear what system we want to change and if we are part of or benefit from that system.
• The legitimate starting point for systems change is emancipation – to liberate people from the circumstances that enslave them.
• Global systems are changed by action at a local level.
• What climate change, gross inequality, or poverty are for us, slavery was once to the anti-slavery movement. Systems can be changed when small cogs in a large machine start to function differently.

Position paper: what is systems change and why should we bother?

The post Position paper: what is systems change and how do we do it? appeared first on The Dragonfly Collective.

So, after seven years in the Europe (based in London, when the UK was still part of Europe) and a year back in Australia, what have we learnt that can point to opportunities for the for-purpose sector in Australia (and the rest of the world)? (Note by ‘for-purpose’ we mean to collect the numerous labels used to define social enterprise, not-for-profits, cooperatives and purpose-driven organisations across the charity and business sector – phew).

With our passion to grow the for-purpose sector framing our view of the world, we see four opportunities:

1. End (or expose) hubris and ego
2. Replace noise with substance
3. Be realistic about impact investment as a source of new money
4. Balance the for-purpose challenge: mission and money

Opportunity #1 – end (or expose) hubris and ego

Donald Trump (remember him?) gave the world a fabulous lesson in hubris and ego. The outcome is he is no longer the President of the United States.

Boris Johnson is another clown of hubris and ego. Under his leadership the English have self-sabotaged their future through Brexit, for a world vastly less diverse and creative than they will enjoy on their own.

It should be no surprise if hubris and ego can be so potently on display by political ‘leaders’ that we find it in the for-purpose sector.

Jim Collins in his widely read analysis of the corporate world, How the Mighty Fall, identifies the first stage of decline as hubris born of success (although it appears we can also have hubris even without any authentic success). He writes “stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. When the rhetoric of success replaces penetrating understanding and insight, decline will very likely follow. Those who overestimate their own merit and capabilities — have succumbed to hubris”.

Both in the UK and back here in Australia there is plenty of opportunity for individuals and the sector to end hubris and ego as drivers in establishing either their own career or that of the sector.

As UK social entrepreneur David Floyd writes in his fabulous blog, Beanbags and Bullshit: “there are some problems with the current state of social enterprise. One is that in the necessary battle to get social enterprise noticed at all, advocates of social enterprise have too easily slipped into suggesting that it offers the solution to all the problems in the world ever. Whether or not this is potentially true, it’s definitely not true yet. Not least because the sector is currently very small.”

And he is writing that about the UK where, compared to Australia, the for-purpose sector is enormous.

A possible wakeup call to us all might best be summed up in a statement by an Australian government official responding to a market survey on the sector in 2020: “many so called social entrepreneurs appear to be more interested in social media than social impact”. Even more painful to read is the observation by Tim Smit, the well-known social entrepreneur and co-founder of UK eco-attraction the Eden Project: “I have met more incompetents in the world of social enterprise than I have met anywhere else”.

Learning #1: individually and collectively, we need to pause and ask what’s driving our actions. Is it making a name for ourselves or our sector, or is it an ambition to build a fairer world? A little humility goes a long way.

Opportunity #2 – replace noise with substance

In 2015 Social Enterprise UK (SEUK) announced its global positioning in its annual report: “leading the world in social enterprise”. This bold assertion certainly generated a lot of noise.

When we were in Tanzania in 2013 we visited a fabulous social enterprise that combined recycling and catering to offer decent work for local people in Arusha. By bringing together able-bodied people with less able-bodied people, they created jobs, amazing glass work, great food and a profit. They had never heard of SEUK.

Today SEUK proclaim on their website: “we are the leading global authority on social enterprise”. Not at all unlike the English in general, many of whom continue to consider they lead the world through the British empire.

But this noise lacks substance.

In 2015, we were working with a very small charity in the north of London that wanted to be accredited as a social enterprise. This was on the basis that people with learning disabilities made candles that were sold at Christmas. We paid $75 on their behalf and applied for SEUK accreditation. We were intrigued to see if the organisation ‘leading the world in social enterprise’ would conduct any due diligence to accredit this small charity. Within less than a week we received a sticker – ‘accredited social enterprise’ – and found ourselves part of that leading social enterprise global authority. However clearly the organisation that had been accredited was not a social enterprise. But it did want to join the noise.

It is unfortunate in life, that along with hubris, comes a lot of noise.

The great opportunity for social enterprise is to recognise that substance can overcome noise. Australia’s social enterprise certification framework developed by Social Traders is a good example. And there are many fabulous examples of social enterprises with real substance all around the world. Caritas Europa for example. They don’t make a lot of noise. But their work on the social economy, their European wide impact and the focus they have on the integrity of their work more than makes up for the lack of noise.

Learning #2: we have the opportunity to ensure our work has substance. Any ‘noise’ we are hoping to generate will follow. It is rare however, for substance to follow noise.

Opportunity #3 – be realistic about impact investment as a source of new money

A lot of effort is currently going into the emerging social investment sector. And it’s no surprise that the UK’s Big Society Capital – established during the reign of David Cameron as PM in 2011 – is regularly referenced in Australia as an outstanding example to follow.

Since 2011, impact investing has grown by leaps and bounds in the UK to the point where at a ‘debate’ we attended on the ups and downs of the impact investment market, one gentleman from a social impact fund made an impassioned attack on what he called ‘free money’. It apparently was a blight on society perpetrated by out-of-date and left-wing ideology. Free money, or philanthropy as some might call it, was the enemy of debt finance for the social sector. ‘Debt finance’ was rebranded as ‘impact investment’.

Whatever you may think of that debate, the reality is that impact investment opportunities will be largely irrelevant to the majority of social enterprises and for-purpose organisations in this country.

According to the November 2020 survey of the for-purpose sector from the Centre for Social Impact, 47% of social enterprises have between 1-4 employees, 29% have between 5-19 employees, 19% have 20-199 employees. Only 5% have over 200 employees. Out of these four categories, who do you reckon impact investing will target? Who do you think will most likely be ‘investment ready’?

Unless you can handle an investment loan between $500k and $1 million and be able to repay it at a rate very similar to that of your local bank, then impact investing will be very, very elusive.

There are real lessons to be learnt from the UK that suggest impact investment may not be the golden nugget that solves social challenges in the way it often promotes itself.

In a paper from the World Economic Forum focused on the 6 things holding back the social enterprise sector across the world, we find this: “in the social sector, investors come to a social entrepreneur and say: ‘we love what you have built, but here are our priorities that must be included in your business execution’. Social entrepreneurs are then tasked with bending their models to serve the needs of the funding community over the needs of those it is their mission to serve. This misalignment is distracting to the scaling efforts of social enterprise and does not allow the entrepreneur to direct growth in the most efficient and effective manner to meet social needs . . . In addition, there are persistent doubts about whether an enterprise that must deliver significant returns can be free to pursue and prioritise social change.”

Learning #3: let’s be realistic about impact investing. Let’s work tirelessly to ensure that investment, ‘free money’, and the good old ‘a hand up not hand out’ approach ensures that small and emerging for-purpose organisations, especially those start-ups being run by minority social entrepreneurs, get a fair go when it comes to accessing sources of ‘new money’. 

#4 – balance the for-purpose challenge: mission and money

Ever get a sense that there is a fearful focus on money across the for-purpose sector? Ever get a sense that the more the for-purpose sector grows, the more it appears to attract people from other sectors – like the big consultancies, corporates and banks, especially at the Board level – who are focused on finance with little or no exposure to for-purpose mission?

We all know that a Finance & Audit Committee has the responsibility of assisting the Board to fulfil their corporate governance and oversight responsibilities in relation to financial reporting, internal control structures, risk management and external audit functions. Finance and Audit Committees are a crucial function in organisations large and small across all sectors to assist in guaranteeing financial health.

But in the for-purpose sector, there’s a whole other (arguably more fundamental) driver of organisational success: social impact. So, what about a committee in for-purpose organisations with at least equal standing to a Finance & Audit Committee called a Mission Audit Committee?

The global corporation Danone provides a good example of how crucial this can be.

Danone become the first listed company to adopt the ‘Entreprise à Mission’ model created by French law in 2019. This embedded the legal ‘entreprise à mission’ (in English – ‘company in mission’) framework within its articles of association. It included a new governance arrangement to oversee the progress of its environmental, social and societal goals. The significance of the ‘mission audit committee’ at Danone is that it constitutionally enshrined its mission. This safeguarded the company from recent shareholder activism (focused on the money and advocating for a change in the company’s approach to ‘doing business for good’) that attacked and removed the CEO, Emmanuel Faber. But this activism has not been able to derail the company’s environmental and social mission because it was enshrined as a legal constitutional requirement.

What can we learn from this European experience?

As more and more of the for-purpose sector is influenced by sectors outside its experience and focus, it can and should robustly scrutinise and hold to account its mission performance as well as its financial performance. This is more than just an endless set of statistics rolled out to prove numerical ‘impact’, like another spreadsheet.

A Mission Audit Committee with a strong representation of ‘practitioners’ (those with real life experience of delivering services that address the real challenges of inequality and environmental decline), will ensure mission and social impact is measured and achieved. A complementary Finance and Audit Committee will ensure that the organisation remains financially viable. Both are fundamental, but for some reason, parts of the for-purpose sector have adopted the for-profit mantra of: money first, mission when we can afford it.

Learning #4: a Mission Audit Committee that includes social impact practitioners, can provide a great balance to a Finance & Audit Committee and avoid mission drift.

Four opportunities no more?

There are many other opportunities that we can explore including what good governance is in the for-purpose sector, how we can combine individual outcomes with systemic change to achieve collective impact, and how networks can be used to integrate not disintegrate. And many more.

The moment we figure we have no more to learn is the moment we need to go back to the first opportunity – end hubris and ego and try some humility and lifelong learning.

The post Seven years in Europe, four opportunities for the for-purpose sector appeared first on The Dragonfly Collective.

In December 2019, Ms Rose Blossom was awarded the Pride of Brent Award for its Fly Girls project, a social enterprise providing services for black women and girls in Wembley, London. Amanda Epe, a black woman, is the founder of Ms Rose Blossom. How did she do it?

Amanda was the first member of the Social Enterprise Ideas Development (SEIDs) Hub – a social enterprise incubator in London, but not as we know it. SEIDs is designed for people from disadvantaged backgrounds who have a social enterprise idea, but who the traditional social enterprise ecosystem isn’t set up to support.

The social enterprise system favours the white middle class

Social enterprises often focus on creating job opportunities for people who are living with disadvantage because they do not have sustainable income from work. The general approach is to develop opportunities that create jobs for people who are out of work. The work is provided by those with the resources – especially finance – to do so.

In the social enterprise sector access to resources – financial and otherwise – are more readily available to white middle class “heroic” entrepreneurs, who create new social businesses as a result of their access to these finances and resources.

But where are the opportunities for people with scant financial resources, no savings to invest, living day-to-day on totally inadequate welfare income, who have a business idea? With no available cash or any other resource to access the support they need to commence their own social enterprise or ethical small business as a pathway out of poverty and unemployment, where do they go?

Is it even feasible in a “business” or “impact investing” sense to consider that people living with day-to-day disadvantage and poverty could have a business idea? And that given the right support and opportunity this business idea could provide them, and others, with sustainable income from work and a secure future?

There’s a different approach – feasibility indicator one: a government inquiry

Released in August this year, the Inquiry into sustainable employment for disadvantaged jobseekers (Parliament of Victoria, Legislative Assembly, Economy and Infrastructure Committee) paints a grim picture: “… types of employment barriers experienced by jobseekers facing disadvantage will persist and are likely to intensify following the COVID-19 pandemic. Increased competition for fewer job vacancies will also make it harder for these jobseekers to gain employment”. Add to this the analysis by Deloitte Access Economics that 150,000 fulltime job losses are predicted when the coronavirus supplement ends and the grimness is confirmed.

So how to respond? The Inquiry into sustainable employment for disadvantaged jobseekers makes two relevant findings:

• Finding 52 – Social enterprises that employ jobseekers facing disadvantage provide an important stepping stone for these jobseekers to move into mainstream employment.
• Finding 54 – Assisting jobseekers from disadvantaged backgrounds to start a small business helps them gain financial independence and can lead to creating jobs and employing jobseekers from similar backgrounds.

Both these findings suggest that assisting job seekers from disadvantaged backgrounds to start a social enterprise or ethical small business will assist them to gain financial independence and can lead to them creating jobs and employing jobseekers from similar backgrounds.

There’s a different approach – feasibility indicator two: SEIDs Hub Wembley

In 2015, I visited a disused building in Empire Way, Wembley, London with the director of Caritas Westminster.

The building – previously an Irish Catholic Social Club – was dilapidated and run-down. “What would you do with that?” I was asked. I suggested that with a bit of work the premises would be a great space to host a social enterprise incubator – but not one of the traditional types already on offer around London.

What followed was several papers focused on options and strategy, a feasibility analysis, a business plan, several grant applications, numerous conversations and discussions with staff and board members, and key internal and external stakeholders, especially the local Wembley community.

The result was SEIDs – Social Enterprise Ideas Development – a new social enterprise hub, open for business on 1 October 2018.

SEIDs is different… and it works

The differentiator for SEIDs amongst other social enterprise “hubs” is its offer of financial support packages to people who would otherwise be excluded from access to business development and support to commence their own small business /social enterprise as a pathway out of poverty.

Since 2017 SEIDs has attracted capital funds of £600,000 to refurbish the premises in Empire Way, £230,290 from the Brent local government Neighbourhood Community Infrastructure Fund for specific programmes, £224,000 from trust and foundations to provide financial support packages, and £280,000 to underwrite operational costs from the project sponsor Caritas Westminster – in total £1.4 million, the equivalent of approximately A$2.6 million.

SEIDs Hub has 65 members after 22 months of being open for business (the last six-months impacted significantly by COVID-19). The majority of members are those who have qualified for a financial package (valued between £3,750 ? $6,700 AUD) and who are from a Black, Asian and Minority Ethnic (BAME) background – in Australia the equivalent cohort is identified as CALD – with around one-third of members self-financing their engagement with the hub. This mix of self-financing members and those on a financial support package is another “differentiator” at the hub.

What’s on offer at SEIDs?

All members have access to a physical space with individual and collective work desks, break-out space, private and group meeting rooms and a separate fully equipped training facility. Additionally, two tailored programmes are offered for those who are eligible for a financial support package: The SEIDs Pre-Start Up 12 Week Program for 15 participants delivered in partnership with the School for Social Entrepreneurs (SSE). The program offers seven free practical weekday evening learning sessions over 13 weeks, a £500 grant, and a community of other people starting up projects in Brent to meet regularly, gain peer support and work through challenges together.

The SEIDs 12-month Start Up Business Program offers up to 25 participants the tools, resources, networks and confidence to set up and develop their own business. This program is for anyone who is unemployed, on benefits or who has been struggling to find enough work and who can access a financial support package. The program offers 12 workshops, a £500 grant on completion of a viable business plan, access to specialist mentors, access to a business coach and open access to the SEIDs co-working space. The first program that commenced in September 2019, and the current program commencing this month, are fully subscribed with a waiting list for the next cohort to commence.

Both the 10-week and 12-month programs have been designed with and delivered by people from the Brent community and others who are outside that community, to ensure accessibility and appropriateness of language and content.

The learning approach and style is focused and tailored to the needs of all its members, particularly BAME (CALD), migrant and refugee communities as well as the long-term unemployed. The focus is on peer-to-peer learning in communities of trust, support and collaboration – an ecosystem or ethos different to the “traditional” social enterprise incubators/accelerators.

With few exceptions, support for social enterprise start-ups and scale-ups follows a particular pattern – a series of workshops followed by refinement of the enterprise idea and then a pitch to a panel of potential “impact” investors. This approach is entirely unsuited to people from disadvantaged communities.

The competitive pitch approach to potential investors after a series of business grooming workshops favours a particular “style” and personality profile that is more likely apparent amongst young middle-class “changemakers” than other particular cohorts of people, and difficult to negotiate for BAME (CALD), migrant and refugee communities as well as the long-term unemployed. Ashoka some years ago ditched the pitch in favour of what it now calls “informed conversations” where everyone is around a table – not one person out front competing via a pitch performance.

What we have learnt

We have discovered many women and men are excluded because of their financial circumstances from access to social start-up support. We have also discovered that given the opportunity, they can be the authors of their own change, their own story and successfully deliver a social enterprise or ethical small business that rivals any other.

Given the impact of COVID-19 on the current and future levels of unemployment and disadvantage in Australia a SEIDs project would appear to fill a significant gap in the “social”, “for-purpose”, “impactful”, “changemaking” sector. It would generate more and more opportunities for the Ms Rose Blossoms of the world to take charge of their own futures.

We would love to hear from anyone interested in getting involved in exploring Australian opportunities.

The post Why we need a different type of social enterprise hub in Australia appeared first on The Dragonfly Collective.

Not-for-profit sector, for-purpose sector, impact economy, social enterprise sector, social businesses, ethical enterprises, conscious capitalism, social progress sector, difference-makers, changemakers, the social economy – these are all terms used to deliberately position a particular type of organisational, economic and social activity and differentiate it from the broader political-economic context of “market-driven for-profit capitalism”.

But does this proliferation of terms, words and language for the sector, in order to define itself as not “market-driven for-profit capitalism”, matter? Does it strengthen the sector(s) and provide a clear identity, or does it confuse and disintegrate?

One clear fact is that when it comes to “market-driven for-profit capitalism” there is no confusion about what it is or isn’t.

Whether it is Friedrich August von Hayek, Milton Friedman, Margaret Thatcher, Tony Abbott or any of the captains of capitalism, the language is clear. Free markets, small government, deregulation, privatisation and individual responsibility sum up the neoliberal ideology – the only responsibility of business is to increase its profits. As Milton Friedmanproclaims: “the only responsibility business has is to its shareholders… businessmen that take seriously their responsibilities for providing employment, eliminating discrimination, avoiding pollution… are preaching pure and unadulterated socialism”.

There is no confusion in the language describing the for-profit sector. Therefore it has no difficulty identifying its purpose or intended impact. It has a clear identity.

Identity in its simplest form is widely framed by the two common questions used when we’re asked to describe ourselves – what is your name and what do you do? The reply creates an instant “identity”. Language not only expresses identities but also constructs them, argues David Evans in his work Language and Identity.

“My name is David” and “I am a bus-driver” generates an almost immediate identity for David the bus-driver.

Imagine if in response to these two most commonly used questions to frame a person’s identity the answer given was: “My name is Mary, and Francis, and Mia and Zara, and I am a tractor-driver, nurse, sailor, window-cleaner and dentist”. Politeness would usually inhibit the observation that there may be a confusion of identity here.

It is hard to argue against the premise that a broad connection exists between language and identification. Language defines the group that we belong to, our status in the social stratification, and also determines the power we hold in our society. Our social identity is created by our language and also our future possibilities are framed by language. Language plays a major role in determining who we are and what we do.

Recently I was contacted by a person who wanted advice about how to set up a social enterprise as a “for-purpose, for-profit charity”. When I explained that perhaps the ACNC might have some issues with this description, the response was, “Well I’m new to this and I am very confused by the language used to describe what it is I think I want to do”.

This prompts the question: do the multitude of terms used to differentiate the not “market driven for-profit capitalism” sector strengthen the identification of that activity, or do they confuse, disintegrate and weaken its impact?

One could argue that the proliferation of terms to describe the sector allows for diversity, and each of these descriptions are pieces of a bigger picture.

One might also argue that there is no problem with the terms currently in use.

While we don’t want to argue over semantics (let’s just get on with it and do the job), language and its power of identification shouldn’t be ignored. When language divides and disintegrates, when it creates confusion of identity and purpose it is worth asking the question: what language might identify the not “market driven for-profit capitalism” sector in order to consolidate its identity, both for those embedded within it, and for those who look at it with scepticism?

Let’s consider some of the terms in use.

Take not for profit. No matter what anyone does under this identity, if they never make a profit (or more politely, a “surplus”) they don’t exist anymore. Perhaps “not-for-shareholders” might be a better but more clumsy identification?

Take for-purpose organisations. Name any for-profit company, charity, social club, farmers’ market or week-end lemonade stand that doesn’t have a purpose?

Take the impact economy. Even McDonalds has an impact – indeed a global impact.

Take conscious capitalism, championed by John Mackey, the co-CEO of Whole Foods Market, in a book published in 2014 with the sub-title Liberating the Heroic Spirit of Business. Conscious capitalism acknowledges that while free-market capitalism is the most powerful system for social cooperation and human progress, people can aspire to achieve more – like community social responsibility and adding stakeholders to shareholders. The problem is that Pepsi & Co is identified as a company combining “performance with purpose” and an example of conscious capitalism because they are investing in drinks that are healthier for customers. Is that conscious capitalism, or a pivot to meet changing consumer demands in order to continue to maximise profits and shareholder value?

Take social enterprise/business. Now here is arguably a point of difference that clarifies identity. A social enterprise (or social business) in simple terms is a business that trades for a social purpose. Social enterprises are businesses that trade to intentionally tackle social problems, improve communities, provide people access to employment and training, or help the environment. Yet even within this bubble of clarity there are repetitive and ongoing attempts – led mostly by the peak social enterprise body in England – to water down the definition, generating further confusion of identity. The move by Social Traders in Australia to certify social enterprises and Social Enterprise Scotland to be clear on what a social enterprise is not, is to be welcomed both by those in the sector and those outside it.

Given all this individual language to identify the sector as “not market-driven for-profit capitalism”, is there a collective integrated option that can be applied at the macro level and include all the various descriptions at the micro level? Is there a term that reduces confusion and provides a clear frame for articulating an alternative social-political-economy?

A collective term used widely in Europe, but that appears to be used in a limited way in Australia is the social economy.

The social economy is used by practitioners (and academics) to describe all the activities that collectively put people before profits. It collectively identifies those activities that invest in people, in their capacities and creativity, and empowers them, creating quality jobs and providing training as well as prioritising social objectives.

As in the free market economy where enterprises are meant to generate a profit, this is also true for the social economy. But the point of differentiation in a social economy is that profit gained goes toward meeting social objectives, not primarily toward generating individual wealth. Wealth is more evenly distributed with direct benefit for the many, not just the few. By prioritising social objectives, the social economy contributes in an innovative way to tackling social, economic and environmental needs in society that have been overlooked or inadequately addressed by the private or public sectors.

Most importantly the social economy includes all those actors and activities that work for an alternative economic reality to that of free market neoliberal capitalism, including all those activities that could be called “for purpose”, “impact sector” and “ethical enterprises”, along with social enterprises, cooperatives, owner-employed businesses with a social purpose, as well as self-employed women and men who use their entrepreneurial skills to lift themselves and others out of poverty.

Importantly it is more than a description of a single activity within an economy. It seeks to collectively combine all elements of a social economy from the supply chain through to the end customer into one complete mosaic – a social economy. This is a consumer-led movement where people intentionally embrace across their business models a joined up “movement” from supply to end product.

Engaging and participating within the social economy means purchasing with a purpose as well as selling for a purpose. A simple example is choosing to purchase from a social enterprise even though that cost might be greater than in the general market. The purchasing provides the economic stimulus to drive the social economy with its social objectives generating greater benefit for more and more people, not just the few.

More importantly the social economy provides an integrated marketplace that combines an alternative socio-economic reality with a joined up social movement and a shared language as well as rich content for all its stakeholders – creating new opportunities for dialogue, negotiation, and ideas that can improve outcomes for the social economy itself.

An integrated use of language with a single collective identity allows a range of actors across the sector to identify as one, in order to maximise the potential of their activities generating a significant impact with a purpose – a viable, collective, alternative marketplace to neoliberal capitalism and one that achieves mission and redistributes profits that benefit people and planet.

Identity is realising who we are at a personal level and also at a community level. To make such identification, language has been a salient feature of group membership and social identity.

Rather than confusing those of us embedded within the “social economy”, and even as a mechanism to generate collaboration rather than silos that compete, integrating identity will make the sector stronger. It will reduce confusion for those whose scepticism is facilitated by a disintegrated use of language. Clarity will also provide a powerful identity to describe a viable alternative to market-driven capitalism.

First featured in Pro Bono Australia

The post Why we need to think about the language and identity of the ‘social’ sector appeared first on The Dragonfly Collective.

It was an innocent question with good intent. The context however, was a Board meeting. The agenda item was the launch of a new facility. The Chair kindly suggested that perhaps staff might deal with this operational matter.

When the corporate world suffers from bad governance, the consequences are significant. Enron, Seimens, Thomas Cook, Carillion – just to name a few of the bigger failures.

But what about the third sector? How do we know what good or bad governance looks like?

The situation: the profile of boards in Australia and the UK

A review of the third sector in the UK – Taken on Trust: the awareness and effectiveness of charity trustees in England and Wales– provided the following snapshot:

• The average age of trustees is 62, with 8,000 aged over 75.
• 64% of trustees were men.
• 99% of trustees are white.
• 73% of trustees are recruited informally – generally by a word of mouth invitation.
• 55% of charities do not use a skills audit when recruiting.
• 30% do not run an induction for trustees.
• Only 40% of trustees have a fixed term – 60% can stay on forever.

In Australia, the recent ICDA Not-for-profit Governance Survey gave the following profile:

• 66% of board members are women.
• 43% of boards have at least one member who is from a culturally and linguistically diverse background.
• 68% of board members are aged over 50 and 27% are aged over 65.
• One in three boards do not have any system in place for reviewing their own performance.
• More than a third of board members say they did not receive a good induction.
• 50% of board members say they would benefit from governance training.
• One in ten boards do not measure success in any way and one in four do not collect any sort of performance data.
• 40% believe their board had insufficient understanding of the organisation’s finances.

The governance challenges in the third sector

While there are a few differences between boards in Australia and the UK (for example representation of women and people from diverse backgrounds), the data points to quite a few big concerns.

As one headline sums it up, governance in the third sector is ‘pale and stale’.

There is a large underrepresentation of young talent and a corresponding different worldview.

There appears to be huge opportunity to expand board representation in both countries to include CALD and BAME communities.

Organisations need to recruit, train and induct new board members on the basis of skills required – not willingness to be involved or existing contacts.

Boards need a good turnover that retains members for a term to ensure continuity, but moves members on to allow for fresh insights and dare it be said – innovation.

How we can improve: the 10 principles of good governance

Recent work completed in Australia by the Australian Institute of Company Directors and in the UK through a collaboration including Cass Business School, NCVO and the Charity Commission provide a set of principles that all Boards would do well to put in place.

These ten principles are a great place to start:

• Purpose and strategy: the organisation has a clear purpose and a strategy which aligns its activities to its purpose.
• Roles and responsibilities: there is clarity about the roles, responsibilities and relationships of the board.
• Board composition: the board’s structure and composition enable it to fulfil its role effectively.
• Board effectiveness: the board is run effectively and its performance is periodically evaluated.
• Risk management: board decision making is informed by an understanding of risk and how it is managed.
• Performance: the organisation uses its resources appropriately and evaluates its performance.
• Accountability and transparency: the board demonstrates accountability by providing information to stakeholders about the organisation and its performance.
• Stakeholder engagement: there is meaningful engagement of stakeholders and their interests are understood and considered by the board.
• Conduct and compliance: the expectations of behaviour for the people involved in the organisation are clear and understood.
• Culture: the board models and works to instil a culture that supports the organisation’s purpose and strategy.

Good governance is not only the very best option for the organisation being governed. In the sectors that care for people and planet, it is a crucial factor in making the world a better place for everyone.

The post What is good governance in the third sector? How we can do better appeared first on The Dragonfly Collective.

1. Resilience

In January 2017, we posted a blog with this introduction: given the political, economic and cultural earthquakes of 2016, the year ahead could look pretty terrifying and uncertain. We may feel anxious. We may have visions of moving to a remote island where we could block out the worry and anger about the increasingly unattractive western world. But there is another option. Resilience. With a big dose of hope.

It can feel like not a lot has changed – except it has! Climate change activism is alive and well. Real poverty in the two-thirds world has been reduced significantly. While democracy is under attack, those committed to its survival are active across the world.

Raymond Williams said that “to be truly radical is to make hope possible, rather than despair convincing”. Resilience is our best antidote to fear, anxiety and withdrawal.

There are four types of resilience (psychological, political, economic and spiritual). Let’s draw on them all in the year to come!

2. Collaboration for collective impact

Working alone, in isolation, as rivals, in silos or as competitors has reduced impact in the social sector where it is most needed. Over the past year we published a series of blogs and articles focused on collective action as a solution that successfully addresses key challenges both locally and globally.

We must work together, not against each other. Poverty for example is one real challenge, but so is distrust, polarisation, competition and personal ego amongst those wanting to end poverty. We could all do with a dose collective impact. Not for our own health, but the health of an economy that works for both people and planet.

3. Leadership

We will have all seen quotes on LinkedIn or Facebook about the attributes of leadership. And we can always look to others to lead. We can also look at our own lives and figure out where we can authentically lead and be part of a solution.

At the risk of being negative (in an effort to be solutions-focused), we’ve all experienced a lack of leadership whether at an organisational level, a national level or a global level. We know what bad leadership is. Ego, hubris, greed, power, control as well as the out-of-fashion attributes of envy, jealousy, malice and pride all figure highly in bad leadership.

A simple act of leadership can change the world, whether it is local or global. Speak the truth even if your voice shakes – is a simple beginning for all of us.

We don’t have to be courageous, charismatic or a white man to be a leader. We can all lead in finding solutions and be inspired by the ‘not what you’d expect’ examples of leadership – thanks Greta!

4. The social economy

For many in our neoliberal world it is abhorrent when the word ‘social’ is associated in any way with the word ‘economy’. There is plenty of opposition and misunderstanding – it all sounds too ‘political’, and isn’t ‘social’ part of that word ‘social’-ism (short-hand for communism)? Despite this, the ‘social economy’ is maturing and becoming much more than yet another ‘bloody coffee cart social enterprise’ (although we can’t get enough good coffee is our way of thinking).

At its heart, the social economy works for people and profit. Or people before profit – not profit before people. Just like in the market focussed economy, businesses in the social economy seek to make a profit. The difference being that in a social economy, the profit is used to meet social objectives, not generate individual wealth. It’s that last bit which makes this type of economy different. Wealth is more evenly distributed.

By prioritising social objectives, the social economy is an innovative way to tackle social, economic and environmental needs in society that have been overlooked or inadequately addressed by the private or public sectors.

Supporting the social economy in 2020 means purchasing with a purpose and well as selling for a purpose. A simple example is choosing to purchase from a social enterprise even though it might cost more than in the general market. The purchasing provides the economic stimulus to drive the social economy with its social objectives to create greater benefit for more and more people, not just the few.

There are plenty of opportunities to engage with the social economy. Who you buy from as well as what you buy can make a difference. There are social economy businesses everywhere. See what you can find in 2020. Spend your money wisely and make an impact!

5. Discipline and focus

Being a ‘change agent’, wanting to ‘do good’ and have ‘purpose’ is all well and very good and way better than the alternative. But we need to be clear about what we want to do and what impact we want to make. We need to be disciplined and focused in measuring and achieving those outcomes.

Whether it is a social business/enterprise, an ethical business for a social purpose, a cooperative, an employee owned business or an attempt at ‘conscious capitalism’, we need the disciplines of strategic planning, social business modelling, theory of change analysis, impact measurement, good governance and generating profit. Generating profit, as we have argued before, is crucial for the survival of all the above – it is how profit is distributed and who benefits from the profit that’s the central justice issue.

In 2020 we will be working in all these areas. We will be resilient, we will lead where we can, we will collaborate with others fighting for the same cause, and in doing that we hope we will help the social economy to thrive.

Join in! We can all be part of the solutions for 2020.

The post Solutions for 2020 appeared first on The Dragonfly Collective.

The charity in London and its local duplicates were all competing for participants in their programmes and all competing for the same ever-dwindling pot of money. My suggestion that this charity should collaborate with other charities doing the same thing was met with disbelief and hostility. And yet collaboration is exactly what’s needed.

You only have to look as far as the UK charity register for the proof. The UK has 166,854 registered charities. 82% of these are categorised as either micro or small – 47% with an annual income of less than £10,000. All of them, large or small, compete for the same charity pound.

Meanwhile, poverty in the UK is trending downwards. More than 14 million people, including 4.5 million children, live below the poverty line in the UK. The war on poverty continues, while charities compete with each other to end it.

Despite lots of activity by lots of charities, poverty remains stable. It has not gone away and does not even appear to be in retreat.

Meanwhile, others in other parts of the world are Winning the war on poverty, not through a disintegrated, fragmented competitive strategy, but with a multisector comprehensive approach called ‘collective impact’.

In September, we published two articles in Pro Bono Australia under the broad heading of What can Collective Impact Offerbased on our research in the UK. Collective impact is a framework for ‘collective practice’ that moves beyond traditional collaboration. And it works.

As David Brooks writes in the New York Times, according to recently released data, between 2015 and 2017, Canada reduced its official poverty rate by at least 20%. Roughly 825,000 Canadians were lifted out of poverty in those years, giving the country its lowest poverty rate in history.

How did Canada do it?

Brooks notes that while the Canadian economy has been decent over recent years, it has not been robust enough to explain these outcomes. Instead, one major factor is that Canadians have organised their communities differently. They used the collective impact methodology to fight poverty.

The collective impact approach stands in stark contrast to how Brooks describes the usual route to poverty alleviation in America: everything is fragmented, with a bevy of public and private programs doing their own thing. In one town there may be four food pantries, which don’t really know one another well. The people working in these programs have their heads down, because it’s exhausting enough just to do their own work.

This is compounded by the common model of one-donor-funding-one-program. Different programs compete for funds. They justify their existence using randomised controlled experiments, in which researchers try to pinpoint one input that led to one positive output. The foundation heads, city officials and social entrepreneurs go to a bunch of conferences, but these conferences don’t have much to do with one another.

Every day, they give away the power they could have used if they did mutually reinforcing work together to change the whole system. What Brooks describes is detailed in the recent Economist essay Poverty In America. Sound familiar, whether you are in the US, the UK or Australia?

Brooks notes that ‘in Canada it’s not like that’. Why? As Brooks writes:

‘About 15 years ago, a disparate group of Canadians realised that a problem as complex as poverty could be addressed only through a multisector comprehensive approach. They realised that poverty was not going to be reduced by some innovation — some cool, new program nobody thought of before. It was going to be addressed through better systems that were mutually supporting and able to enact change on a population level.’

So they began building city-wide and community-wide structures. They started 15 years ago with just six cities, but now they have 72 regional networks covering 344 towns. They begin by gathering, say, 100 people from a single community. A quarter have lived with poverty; the rest are from business, non-profits and government.

They spend a year learning about poverty in their area, talking with the community. They launch a different kind of conversation. First, they don’t want better poor; they want fewer poor. That is to say, their focus is not on how do we give poor people food so they don’t starve. It is how do we move people out of poverty. Second, they up their ambitions. How do we eradicate poverty altogether? Third, they broaden their vision. What does a vibrant community look like in which everybody’s basic needs are met?

After a year they come up with a town plan. Each town’s poverty is different. Each town’s assets are different. So each town’s plan is different.

The town plans feature a lot of collaborative activity. A food pantry might turn itself into a job training centre by allowing the people who are fed do the actual work. The pantry might connect with local businesses that change their hiring practices so that high school degrees are not required. Businesses might pledge to raise their minimum wage.

The plans involve a lot of policy changes on the town and provincial levels — improved day care, redesigned transit systems, better workforce development systems. The process of learning and planning and adapting never ends.

A leader in the approach, The Tamarack Institute pioneered a lot of this work. They emphasise that the crucial thing these community-wide collective impact structures need is attitude change.

‘In the beginning, it’s as if everybody is swimming in polluted water. People are sluggish, fearful, isolated, looking out only for themselves. But when people start working together across sectors around a common agenda, it’s like cleaning the water. Communities realise they can do more for the poor. The poor realise they can do more for themselves. New power has been created, a new sense of agency’.

Collective impact in Canada is a real-life experience of where theory or thought leadership meets practice and brings transformational change.  The challenge is to get people and organisations to work together, not against each other. Poverty is the real challenge, but so is distrust, polarisation, competition and personal ego amongst those wanting to end poverty.

There has to be learning from the Canadian experience. We could all do with a dose of collective impact. Not for our own health, but the health of those whose daily existence is entrenched systemic poverty.

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Thoughts can be like mosquitos. They can be small and noisy and buzz around endlessly in your head, sucking the lifeblood out of you. We all have mosquito thoughts. They are the thoughts that suppress and oppress us. I bet we also all know workplaces and organisations and social norms and political parties that, like mosquitos, generate thoughts that suck the life out of us. Thoughts and thinking that generate fear and annoyance, anxiety and stress.

Mosquitos endlessly buzz around looking to suck the life out of anything they can. At their worst, they poison systems, places, spaces and people, becoming a malaria that ends life and hope. At their most worst, systems and institutions can live with the malaria, slowly sapping the life out of all around them.

But thoughts can also be like dragonflies:

• Dragonflies transform – starting off as an ugly nymph living underwater, they become beautiful, dazzling flying creatures.
• Dragonflies do it differently – dragonflies can do things that no other insects can do with body structures no other insects have. They can fly backwards, loop the loop, hover and fly faster than any other insect.
• Dragonflies persevere – dragonflies pre-date the dinosaurs and can stay in the air all day without landing.
• Dragonflies can see multiple perspectives simultaneously – they have about 30,000 lenses in their eyes with 360 degree vision.
• Dragonflies embrace diversity – there are about 5,000 different species of dragonflies all over the world.

Thought leadership is more about the possibilities of the dragonfly than the endless monotonous buzzing of the mosquito.

There is always a battle for ‘thoughts’. An endless ongoing battle between mosquito thoughts and dragonfly thoughts.

And there is the related battle between mosquito actions, based on mosquito thoughts, and dragonfly actions, based on dragonfly thoughts.

This reflects the relationship between theory (thoughts) and practice (actions).

There are many destructive theories (buzzing around like mosquitos) that get embedded in destructive practice. Too often they lack critical reflection and provide a breeding ground for systemic malaria within people and institutions, countries and political parties, workplace cultures and home lives.

There is an urgent need for dragonfly theories that can be embedded in life-affirming practice that offers a renewed alternative to the poison of systemic malaria.

Our busyness over the past 12 months (no excuse) has slowed down our thinking, advocacy and actions for dragonfly-like practice.

We’re now back in the public domain to ‘challenge, imagine, transform’ thinking and practice wherever we can as part of the grander mosaic of people committed to replacing malaria systems with hope, justice and a safe future for people and planet.

Watch this space!

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In 2016 after doing some work with the team at Caritas Westminster, they took us to visit a building. An old, run-down, disused school then social club in Wembly. Surrounded by a massive development project, the question was – sell it to developers or do something with it?

When we first looked, we saw a dilapidated old building. But on second glance we saw a space that could be used to run a social enterprise. In fact, lots of social enterprises.

Now, after a renegotiated lease, £500k of building work, lots of community consultation and two years working with Caritas Westminster, we have planted some SEIDs.

Huh? What on earth is SEIDs?

We know that decent and dignified work is hard to find.

In London, the majority of people living in poverty – 58% – are living in a working family.

That’s 1.3 million people living in poverty while working in London alone. It’s obviously shocking and unacceptable.

21% of people employed in London are paid below the London Living Wage – £10.20 an hour. Even on that hourly rate it is almost impossible to get by.

SEIDs – Social Enterprise Ideas Development – exists to change the lives and opportunities of people who are in poverty, both in work and without work.

The best way to move someone out of poverty – whether ‘in work’ or ‘out of work’ – is to give them a decent and dignified job – one that pays a sustainable London wage and one that provides a working environment where people and profit co-exist together without one at the expense of the other. Social enterprises – businesses that trade for a social purpose – are one way to do it.

SEIDs is a family of social enterprises that create decent and dignified work.

One of the SEIDs family is a social innovation and enterprise hub at Wembley to assist business start-ups to become viable opportunities for decent work. But it’s not like a traditional hub. We have raised over £75k to provide bursaries for people with an enterprise idea that don’t have the financial resources to access all the services provided by the hub, to make sure the opportunity to develop a new business idea is available to everyone.

Another member of the family is a property services enterprise working across north London – to provide training and employment on the job as a pathway into decent work.

And there are more enterprises in the pipeline. It’s a happily growing family!

The goal is for all the enterprises to move people out of poverty and into a job – a decent job that provides financial sustainability and security and the dignity to fully engage with the community.

That’s what we’ll be busy doing at SEIDs. Challenging existing thinking, imagining new solutions, and transforming the way we do business and hopefully also people’s lives along the way.

We hope the SEIDs family of enterprises will be one more piece of the mosaic of people and projects everywhere working to fight inequality, in all its forms.

Here’s to all those people – the ones who don’t despair when something isn’t fair, but get straight to work on changing it.

You guys inspire us every day. Let’s carry on challenging, imagining and transforming! And maybe we’ll see you at the SEIDs hub. Come and join us!

The post SAIDs SEEDs SEIDs? It’s the last one! appeared first on The Dragonfly Collective.

Jose Maria Arizmendiarrieta, a young Catholic priest, arrived in Mondragón in 1941, a town with a population of 7,000 that had not yet recovered from the poverty, hunger, exile, and tension of the Spanish Civil War. One year later he set up a technical college that became a training ground for local companies. Arizmendiarrieta included in the curriculum teaching on solidarity, participation and the value and agency of human beings, individually and collectively.

In 1955, he selected five young people to set up the first company of the co-operative now known as the Mondragon Corporation. Today the Mondragon Corporation is the tenth-largest Spanish company in terms of turnover and the leading business group in the Basque Country. It employs over 74,000 people in 257 companies and organisations in four areas of activity: finance, industry, retail and knowledge.

Every member of staff is an owner of the company.

Their labour does not provide capital for distant and external shareholders.

It is no accident that the Mondragon Corporation website starts with Mondragon People!

This ‘employee owned business’ has four corporate values: co-operation between staff as owners and protagonists; participation, which takes shape as a commitment to management; social responsibility by means of the distribution of wealth based on solidarity; and, innovation, focusing on constant renewal in all areas.

Let’s now shift to Scotland, where the founders of a company called Novograf were considering selling the business after a combined sixty years of personal investment. From small beginnings in 1986 Novograf had developed their original signage business into a major brand realisation company with some of the UK’s biggest companies as their customers.

An American company offered to buy them out for a significant sum. Just prior to signing off on the deal, a conversation with the potential buyers revealed that Novograf would more than likely be swallowed up into a new entity and moved out of Glasgow. That would end the employment of over sixty people who the founders had worked with for many years.

Then out of the blue a postcard from Scottish Enterprise dropped into their mailbox and drew their attention to an alternative – employee owned businesses. They discovered there was a different option to selling their company to anyone with a big enough chequebook: to sell the company to their employees. Of course the employees could not come up with the cash to collectively purchase the company and no major bank was interested in funding this ‘radical’ scheme. So the founders turned themselves into a bank, handing over the company shares while allowing employees to pay them back over several years with one condition – a limitation that excluded the relocation of the business.

At the end of is first year as an employee owned business Novograf’s sales increased by 20% and the company employed an extra 22 staff.

It sounds almost commonsense when you consider the benefits of employee owned businesses. The benefits have been proven through the experience of over 300 employee owned businesses from Arup to John Lewis. They include a competitive price and guaranteed exit for the owner to safeguard the future of the business, ownership and leadership transfer at low risk, enhanced employee engagement, increased productivity and innovation and attracting and retaining high-quality talent.

However as Aditya Chakrabortty makes clear, the model of employee owned businesses sits at odds with current market economics in the West to such a degree that little can be found to promote the concept and precious few can be found to provide advice on how to move a company into this space (Coops UK is one good example). When it comes to selling a company the overwhelming doctrine surrounding options is the almost fanatical adherence to the concept of the free and open market where the staff, suppliers and the public count for little.

Social enterprise has been promoted for many years as the new way to both trade as a business and ‘do good’. But perilously few adopt any alternative business model to that of the standard owner-employee hierarchy that has been developed to reflect the Lord and serf, labour and capital, rich and poor reality of the current dominate form of neoliberal capitalism across the West. It may be no coincidence that by the mid 1990’s western governments – especially in the UK – were promoting social enterprises and demoting cooperatives.

Employee owned businesses challenge the very heart of the open market’s reason for being – the generation of profit for external shareholders who benefit from the labour of others.

Employee owned businesses generate profit for the owners of the business – the employees.

As we suggested in our last blog, profit is not evil in and of itself – it is how it is made and how it is distributed that matters above all else.

Employee owned businesses are a tangible example of how profit and people can be combined in a manner that benefits those whose labour generates the profit.

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