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.

Now is the time for social enterprise.

If we’re going to see more of social enterprises, and more of them growing, we need to go right to the heart of strategy and understand the business models that make them work.

We researched best practice on social enterprise business model design, and produced the social enterprise business model toolkit. It’s based on a review of 92 international journal articles and interviews with leaders of social enterprise peak bodies in the UK that support over ten thousand social enterprises. 

Social enterprise business model toolkit – three part blog series

“I have been in the social enterprise sector for 20 years and have never read such a good introduction to the issues faced by social enterprises and those that start them!” – UK social entrepreneur 

“In all the research I have done, the best guide to set up a social enterprise has been your publication.” – Australian social entrepreneur

Blog #1: the why and what

Part one sets out the core components of any successful social enterprise, and picks apart the trade-offs you’ll need to manage when it comes to governance, operations, management, stakeholder management or strategic decision making.

Blog #2: the 16 social enterprise business model types

Part two explored the four social enterprise business model categories and the 16 social enterprise model types. There is no magic formula (sorry!), but the types are designed to spark ideas for how you might refresh or build your own social enterprise business model.

Blog #3: the seven steps to social enterprise business model design 

Part three explores seven steps to consider when pivoting or building a social enterprise business model. There are plenty of tools and tips along the way.

Featured in

Download the complete social enterprise business model toolkit

The post Social enterprise business models appeared first on The Dragonfly Collective.

A three part blog series covering our NEW social enterprise business model toolkit

After the shakeup of Covid-19, many of us will be in crisis and survival mode. But now is also the time to be thinking about the future and recovery phase. There will be new market opportunities as services and products are reimagined, new needs from our communities, and a more open space for business models with purpose as we question an economic system that valued GDP above all else.

We researched best practice on social enterprise business model design, but other than the social business model canvas, there wasn’t much out there. So we did our own research and produced the social enterprise business model toolkit. It’s based on a review of 92 international journal articles and interviews with leaders of social enterprise peak bodies in the UK that support over ten thousand social enterprises. 

In part one, I shared the components of a social enterprise business model and the trade-offs that have to be managed.

Part two of the series explores the four components of a social enterprise business model and the 16 social enterprise model types. There is no magic formula (sorry!), but the types are designed to spark ideas for how you might refresh or build your own social enterprise business model.

The four social enterprise model categories

There are four basic business model types that explain the different ways that value is created and captured in corporate organisations. These are described in the Business Model Zoo developed by Cass Business School. In the social enterprise business model toolkit, each of these business model types has been adapted to apply to social enterprises.

Product social enterprise models

Product social enterprise models involve a standardised product sold to customers, who are also beneficiaries (generally at a more affordable price). In this model the value proposition for customers and beneficiaries is integrated – social impact and profit are delivered simultaneously.

Solutions social enterprise models

Solutions social enterprise models involve a customised solution developed with a customer. In this model the beneficiary is also the customer (paying a standard or reduced rate). It differs from the product model because the social enterprise engages with the customer/beneficiary about their needs and then provides an integrated solution – it tends to be service delivery. In this model the value proposition for customers and beneficiaries is integrated – social impact and profit are delivered simultaneously.

Matchmaker social enterprise models

Matchmaker social enterprise models use brokerage to connect customers and beneficiaries. Income is usually created through a fee based on ‘trades’ between the two groups. The model relies on generating trust. Value is created by reducing the search effort for customers and offering a marketplace to beneficiaries or subsidised access to support services from the brokering social enterprise. In this model the value proposition for customers and beneficiaries is parallel – social impact and profit are delivered separately through different customer/beneficiary markets.

Multisided social enterprise models

Multisided models involve brokerage between three parties. The social enterprise establishes a set of relationships between previously disconnected but complementary customers and beneficiaries. In this model the value proposition for customers and beneficiaries is parallel – social impact and profit are delivered separately through different customer/beneficiary markets.

The beneficiaries receive products or services at below cost, paid for by customers who gain from the ‘consumption’ of the beneficiary group (for example, delivery of social impact or enhanced CSR credentials). The model generally relies on ‘conscious’ customers paying a premium for services that include delivery of social impact.

The 16 social enterprise model types

Across each of these four business model types, a review of 92 international journal articles identified 16 types of social enterprise business models. These types can be adapted and combined, so are designed to spark ideas about how your business model might shift in response to Covid-19.

Summary

While there is no magic formula for social enterprise business model design, these 16 social enterprise model types offer ‘ready to wear’ models as a starting point for combining profit and social impact. Business model design in practice however, will always require strong contextual understanding, along with creativity and imagination.

Part three in this series will cover seven steps to consider in social enterprise model design.

The post Reimagining your social enterprise business model post Covid-19 (part two): the 16 social enterprise model types appeared first on The Dragonfly Collective.

A three part blog series covering our NEW social enterprise business model toolkit

After the shakeup of Covid-19, many of us will be in crisis and survival mode. But now is also the time to be thinking about the future and recovery phase. There will be new market opportunities as services and products are reimagined, new needs from our communities, and a more open space for business models with purpose as we question an economic system that valued GDP above all else.

We researched best practice on social enterprise business model design, but other than the social business model canvas, there wasn’t much out there. So we did our own research and produced the social enterprise business model toolkit. It’s based on a review of 92 international journal articles and interviews with leaders of social enterprise peak bodies in the UK that support over ten thousand social enterprises. 

In this first of a three-part series, we set out the core components of any successful social enterprise, and pick apart the trade-offs you’ll need to manage when it comes to governance, operations, management, stakeholder management or strategic decision making.

A moment of opportunity: why now is the time for social enterprise

One thing Covid-19 has made abundantly clear (if it wasn’t already) is that our economy is not working. Small governments, diminished welfare systems and free markets left to dictate our way of life have left us vulnerable.

There has been lots of commentary about how after such a seismic black swan moment, we will not and cannot return to the way things were.

We knew this already. In 2019 the likes of the Economist and the Financial Times started running stories advocating for a rethink of capitalism. At the same time 180 of the world’s biggest companies overturned three decades of orthodoxy to pledge that their firms’ purpose was no longer to serve their owners alone, but customers, suppliers and communities too.

From the other side of the economy, there is growing interest from charities in generating income beyond traditional fundraising and grants. More are now looking to social enterprise models as a way to create trading revenue.

As we rebuild our economic system, we need social enterprises more than ever.

There are already thousands of social enterprises around the world. If we’re going to see more of them, and more of them growing, we need to go right to the heart of strategy and understand the business models that make them work.

Quick recap: what is a social enterprise?

Traditionally society was organised into three parts: the private sector, the government sector and the charity sector. But there is a grey space in between: the social enterprise sector.

Social enterprises are hybrids. They blend the commercial logic of the corporate sector with the social impact logic of the third sector and create a mash-up. They are the practical vehicle for building an organisation that can deliver both profit and purpose.

Social enterprises run like normal businesses that make a profit, but also have a social or environmental mission. The social mission is embedded right across the businesses into production processes, products, culture, and relationships with employees, suppliers and customers.

It’s their position in the grey space between the corporate and charity sector that gives social enterprises so much potential.

We need more of them. And we need the existing ones to scale and grow. For that to happen, we need to understand the business models that make them sustainable.

Social enterprise business model design: combining profit and purpose in practice

A social enterprise business model is a lot like a traditional corporate business model, but with one main difference. A corporate business model has three elements: the product/service offered to customers (value proposition), the way the company is organised to deliver this product and service to its customers (operational model), and the revenue model to generate a profit (value capture mechanism).

Social enterprise models have a fundamentally different starting point to their corporate business model cousins. Rather than a focus on the customer to generate profit and maximise value for the business owners, they have a clear intentionality around a social purpose for a beneficiary.

Rather than the purpose of strategy being to create and sustain competitive advantage (in order to make higher profits), the primary purpose of strategy for a social enterprise is to deliver social impact. That means social enterprises have a fourth component in their business model: the ‘social impact model’ that describes how social impact is generated and drives all business decisions.

For social enterprise, profitability is an enabler for social impact. For corporate businesses social impact (if any) is an enabler of profit. Rather than making profit the mission, social enterprises aim to make their mission profitable. This fundamentally impacts the way strategic choices are made, and business models are designed.

The trade-offs that need to be balanced

Running a social enterprise with the dual goals of profit and purpose is arguably far more complicated than traditional business. Social enterprises need to create unfamiliar combinations of activities not found in traditional business strategy.

There are greater complexities in social enterprise governance, operations, management, stakeholder management and strategic decision making.

These challenges make it even more crucial to have a sound business model at the heart of your social enterprise. Part two and three of this series explain the business model types and the tools to help design them.

Summary

Our economy needs social enterprises more than ever, to create a new economy post Covid-19 that delivers value beyond GDP.

But it’s hard to find ‘ready-to-wear’ business models that enable the dual purpose of profit and social impact to be achieved.

The good news is that there are a number of social enterprise models that have been shown to work. In part two of this series we’ll explore them in detail and share examples – hopefully sparking ideas for how you might refresh or start-up your own social enterprise business model.

The post Reimagining your social enterprise business model (part one): the why and what appeared first on The Dragonfly Collective.

Thinking about the economy and why it’s broken

‘Economies’ are made up of a lot of elements, and involve all of us. The owners of business. The shareholders of business. The workers in the business. The customers who buy products from businesses.

For some the economy is never talked about, just lived with while mindlessly accumulating goods. For some it is political. For others it is a thing made by ‘them’ that affects ‘me’. Who the ‘them’ is remains a mystery, but ‘they’ are the reason it’s not working and I won’t vote for ‘them’.

For those who like Adam Smith it’s about the ‘invisible hand’ and for those who have never heard of Adam Smith it’s about what’s on the television tonight.

For some it’s about free markets. As long as it all leads to profit then the market should be left to its own devices. Everyone benefits. Nobody bludges. Hard work leads to hard profits. For the 1% it is all ‘mine’ to spend.

And for some it’s about living with the effects of austerity. Because the current economic system prevalent in the western world is broken. In-work poverty, child poverty and massive global inequality, and the marketization of education, health care, public transport and housing are leading to reduced opportunities. It’s the outcome of the last 30 years of market fundamentalism in the UK, USA and Australia.

There is an alternative – the social economy

The social economy has been growing now for some years.

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 communist)?

Despite this, and its limitation at the outset to social enterprises (a business trading for a social purpose), 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 my way of thinking).

This social economy has – like all economic systems – a set of beliefs in the broadest sense.

At its heart is 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 gained goes toward meeting social objectives, not primarily toward generating individual wealth. It’s that last bit which makes this type of economy different. 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.

The social economyincludes social enterprises, cooperatives, owner employed businesses with a social purpose, as well as self-employed women and men. It combines everything from the supply chain through to the end customer into one complete mosaic – a social economy.

We can all help the social economy to grow

Supporting the social economy 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 that cost is 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.

The Dragonfly Collective has been working with Caritas Westminster, and with its European partners, to help build the social economy and develop a range of new social enterprises in London., that provide social purchase choices for people looking for everything from training, to co-working space to painting and decorating.

While Adam Smith may give this a vague if not slight nod, Friedrich Hayek would choke on his Viennese roll. But that’s another story and the exact opposite of the social economy!

There are plenty of opportunities to engage with the social economy. Who you buy from as well as what you buy can make a huge difference.

There are social economy businesses everywhere. See what you can find in your community!

The post Why we all need to pay attention to the social economy appeared first on The Dragonfly Collective.

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.

The post Profit and people: is that possible? appeared first on The Dragonfly Collective.

Some food for thought to get the year started – here’s an interview with Collaborate where we talk about the messy process of collaborating for change. It’s only by aligning our passions, ideas and resources that we’ll ever achieve the scale of change needed to really tackle inequality in all its forms.

We’d love to hear about your experiences with collaboration.

Interview with Collaborate.

The post An interview with Collaborate sharing our experience with collaboration appeared first on The Dragonfly Collective.

I recently read a short article on why kids should learn philosophy and immediately thought the same about economics – but not for kids – but for all the grown ups currently working feverishly to do good and change the world through socially innovative entrepreneurial enterprises.

In fact it occurred to me that there was a business opportunity or gap in the market as they say, to have a whole semester or two added on economics to all MBA and equivalent courses that now exist for social entrepreneurs.

By now you’re yawning because as Richard Denis recalls in his article in The Monthly “I remember my first lesson in economics like it was yesterday. I’d never heard a bigger bunch of crap in my life. It made no sense. The assumptions were flawed. The examples were ridiculous and the conclusions worse.”

And that’s about where we leave economics – back in high school.

Not that we don’t hear a lot about ‘the economy’. But economics – no thanks!

Let’s just get on and do it! Economics has nothing to do with changing the world. The solution lies with new business models to challenge and solve social problems. Poverty and inequality – all solved with scaling up, volumes, price point, marketing, distribution points, strategic planning, supply chains, market segmentation and financial modeling, and more financial modeling.

In the meantime while we all learn about ‘good’ business (or is it ‘business for good’?) the economy runs on, adjusted from time to time by the invisible hand of the ‘market’.

And we know as much as we need to know about ‘the economy’ because everyday we are educated about ‘the economy’ by politicians and media to such an extent that we know all we need to about economics. Right?

Richard Denis calls this constant everyday education “econospeak” noting that “the primary purpose of the econospeak that fills our airwaves, most of which is complete nonsense, is to keep ordinary people out of the big debates about tax, fairness, climate change and the provision of essential services. Econospeak is a great way to limit the options on our democratic menu. Would you like a small tax cut and a small cut in services or a big tax cut and a big cut in services? What? You want to spend more money in health and education? You must be mad. Just imagine how “the markets” would react to such a suggestion.”

What’s really startling is that while we have all been learning about ‘good’ business to solve social challenges, we’ve taken our daily dose of econospeak and swallowed it hook, line and balanced budget. As Denis notes “the whole strategy has worked a treat for the past few decades”.

Swallowing econospeak allows us to live with myths like, it is the lifestyle of the poor that threaten the economy, or, that tax concessions to the super rich will create more jobs, or, that the great financial crisis was caused by governments spending recklessly on public services, and that business above all else is how all our problems will be solved. Ignorance produced by econospeak is a powerful tool – after all, how can you criticize economic policy when you don’t understand economics?

Perhaps that’s where education is needed.

What if all of us who want to change the world for the better took some time to educate ourselves beyond econospeak so we had some tools to use when we critically consider the economy we are part of? What if every aspiring social entrepreneur had to complete a year of study in economics before studying business tools? What if this education allowed us all to understand why even the best intentions to change the world informed by econospeak, actually just perpetuate the very challenges we want to solve?

So where to begin? Here’s a sample of some really good economic thinking – and if you don’t want to read the whole book, look for articles that discuss the thoughts of the authors – even Wikipedia is better than gulping down headfuls of econospeak. So have a look at:

John Maynard Keynes, The General Theory of Employment Interest and Money

Ha-Joon Chang, Economics: The User’s Guide

Joseph Stiglitz, The Great Divide

Thomas Picketty, Capital in the Twenty-First Century

Anthony Atkinson, Inequality: What can be done?

And after some reading, consider afresh Richard Denis’ final words: “you don’t need to be an economist to call out crap when you hear it. But unless people start calling it out and stop worrying about “what the markets think”, then one of the richest countries in the world, living at the richest point in world history, might continue to believe that we “can’t afford” to invest in a better health or education system . . . Economics doesn’t tell us that we need to cut taxes for the rich or cause climate change if we really want to help the poor. And “the markets” don’t tell us that either. Those are the sentiments of some wealthy people, and some politicians who represent them. But they say it in econospeak because it sounds so ridiculous in plain English.”

The post ‘Just do it’ and forget economics! appeared first on The Dragonfly Collective.