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Investment readiness for social enterprise

5 Jun

[I’m now writing an article every couple of months in Third Sector magazine on social investment; here’s the one from last time….]

Much of my time of late has been taken up with planning for the Social Enterprise Exchange, last month’s trade fair and conference in Glasgow. A key element of any event is the programme and, with our partners Social Enterprise Scotland and CEiS, we deliberated long and hard about what areas to cover, which structure to use and whom to invite.

One area that everyone agreed had to be included was social investment, because it remains not only a hot topic of debate but also a key area of practical interest for social enterprises on the ground. We know from our research that access to appropriate finance is the leading challenge for social enterprises across the UK.

And it does feel like we’re entering a time of more action, rather than more debate.Big Society Capital has now been launched, seven years after the original Commission on Unclaimed Assets was established. For context, Westlife were number one with You Raise Me Up at the time; and, if you’ll excuse the shoehorned reference, much of the sector hopes the influx of new capital will indeed help “raise them up to walk on stormy seas”.

But BSC requires the intermediaries to be ready to take the capital and the enterprises themselves to be ‘investment-ready’ – a term that has now fully entered the lexicon of social enterprise jargon, and means, of course, different things to different people.

At Social Enterprise UK, our experience is that investment readiness comes after business readiness and finance readiness, which means getting the organisation’s operations and financial management ship-shape, even before you look at investment. Alongside this internal work, many of our members are learning about the external social investment world, which can appear fragmented and feel difficult to access and navigate.

Click here to find out more!Even as more complex and advanced financial instruments are developed at one end of the social investment world, there is much still to be done to make it accessible for social enterprises on the ground. The session at Glasgow focused on these practical realities, risks and rewards of social investment, because it’s not a panacea by any means.

So there is much work still to do, but there are also more promising signs in many different areas than just Big Society Capital: the new £10m investment and contract-readiness fund to be run by the Social Investment Business; the continuing growth of community shares (FC United recently raised £1.6m); the development of crowdfunding platforms (including an organisation successfully raising £112,000 on Buzzbnk); ClearlySo‘s new Social Business Angels Network; and the new investment coming into the Big Venture Challenge 25.

Best of all is that there is so much good partnership work in these initiatives; if we’re going to use social investment effectively to achieve substantially more social impact, then real partnership work and the hard yards of delivery will be essential.

>>Read the original article, and more on social investment, on Third Sector’s website here

Start pedalling while Rome turns…

5 Jun

This post Stop fiddling while Rome burns! by Liam Black has prompted a fair amount of attention over the last few days: many supportive (it seems from the re-tweets on Twitter + the comments on the piece) with a significant minority agreeing with the bulk of the analysis but asking what the actions or solutions are.

I think I find myself in the latter camp. Anyone who’s been working with social enterprises or entrepreneurs over the last 12 months knows the reality at the coalface: the Big Society rhetoric is far removed from the reality of what cuts mean for civil society at the frontline. Funding, investment, capital, income: whatever we call it, there is less money around, and accessing it (or competing for it) is more difficult than ever. And where new opportunities are meant to be arising with initiatives like the Localism Bill, Big Society Bank, Apprenticeships and more, they are either coming too late, are too small, or not relevant for the majority. And existing opportunities are either disappearing completely or, due to scale or cost, disappearing out of reach.

But, as Jonathan Jenkins said in an article recently, “Spelling out the problems which are currently being faced locally is the easy bit”. We all know, to use Liam’s metaphor, that Rome is burning. The question is what to do about it. Liam’s solution is clear:

“And where the bloody hell are the leaders of the so-called ‘social enterprise movement’ whilst all the hard won gains made over many years are being wiped out on the ground?…Dare they publicly take on a government which still pays most of their bills? Seriously, they need to before they have no-one to lead.”

There is definitely a need to be clear with government about the realities on the ground, and the realities that are flowing from some of their policies. But, as David Floyd points out in his response to Liam, leaders like Peter Holbrook and Allison Ogden-Newton have been speaking out on such issues. A quick glance at SEC’s recent press releases and published letters shows that they’ve strongly critiqued the white paper, the NHS reforms, the approach to the Regional Growth fund, the Big Society Bank, and the government’s approach to welfare. A press release on the latter topic says that unless government changes things on the frontline: “…Big Society risks going down in history as nothing more than hollow words.” Surely not a million miles from Liam’s words?

So then it becomes about the way you do policy work, the way you advocate and where you place your emphasis. Some have less confidence than others in the behind-the-scenes policy conversations and realpolitik that continue alongside the public pronouncements; but hectoring can lose you a seat at the table. And leadership isn’t about who shouts loudest.

And, if Rome is burning, social enterprise should not just be standing there shouting ‘Please don’t burn! Stop lighting fires!’, but also trying to put the fires out, supporting those who are suffering from the effect of the fires, building fire exits and sprinkler systems, keeping their own organisation from going up in flames, and, as Sarah Dunwell puts it pragmatically in her blog, pitching for the rebuilding work. The challenge for social enterprise leaders is to try and meet all of these needs, not just the important one of fighting social enterprise’s corner by taking on the government: to protect work, prevent damage, and prepare for the future as best as they possibly can.

Where I do strongly agree with Liam is about the cult of the ‘digital’ social entrepreneur; I’m no Luddite, and am fully aware of the potential for new technology to change things for the better in new ways: to connect, to mobilise, to communicate and so on. Indeed, I have promoted and advocated for the use of new technology in every organisation I’ve worked in. But in the social and political spheres there is a current fetishisation of new technology that gives it undue prominence over the frontline, face-to-face work. People seem to continually forget that Kiva works because of the microfinance organisations on the ground; that a volunteering app only works because it links to real volunteering opportunities created by real organisations; and that crowdfunding needs something to fund. When Rome’s burning down, the digirati and slacktivists aren’t going to save it from behind a computer screen; though at least we’ll be able to crowdfund the rebuild, and visualise the new city layout on our iPad 2. :0)

Finally, a very unsexy point, but we can’t base policy work on anecdote and personal experience either. As an evidence geek, it will be interesting to see the effect of the last couple of years on social enterprises on the ground, and how this shows up: in UnLtd and SSE’s evaluations, in Delta Economics’ research and in SEC’s State of the Social Enterprise survey. Are things as bad as it feels (or about to be that bad), and it does feel bad to me, or will the research say something different? That research won’t make a difference to those losing jobs, cutting back work, and feeling the pain in reality right now. But it does matter to those leading the movement, and for those seeking to judge whether they’ve been effective in their work.

A powerful man has big ears

27 Mar

It’s been a little while since the last blog post: apparently freelancing can prove to be quite busy…Amongst helping out on things like this, I have however been doing some writing, it just hasn’t been here…so do check out a couple of posts over on the School for Social Entrepreneurs blog (People not Pizza (reflections on social franchising); and Collaboration, partnership and network mindset) if you’re interested.

But the reason for the post title (an old Japanese proverb that is a useful reminder of the importance of listening) and the red button is that I’ve also been writing about power. An interest that has been rekindled by hearing reference to it in many government (and opposition) pronouncements, and by the new People Powered Change programme from the Big Lottery Fund. What, I’ve been wondering, do people mean by power and empowerment in this context? So I wrote an article for ResPublica which, aside from putting a photo of Eric Pickles next to the byline on their homepage (no, I haven’t let myself go that much), I was happy to share with their networks. Here’s an excerpt:

The risk with the timing of the government’s current work is that the opportunities to achieve empowerment in one sense (the giving – or taking – of power) are being created at the same time as the opportunities to achieve it in the other sense (the equipping with an ability) are in many instances being removed. Constraints on central and local government budgets mean that infrastructure and support agencies, largely regardless of their track record, are fast disappearing. It remains to be seen whether one-off initiatives like the government’s Community Organisers programme, or sector-led ones like People Powered Change can adequately fill the gap. Or whether the available powers can ultimately only be taken-up and used by bigger organisations with the resources and capacity to do so.”

You can read the whole piece here: Power down: why true empowerment is double-sided

Hopefully, some of those in power are listening…..

5 steps to (really) relaunching Big Society

15 Feb

Does my society look big in thisThe great irony of the current Big Society debate is that it has brought the third sector / social enterprise / civil society organisations and issues to the front of mainstream media. While the relaunch yesterday was surprising only in that it genuinely involved nothing new (all the initiatives had been previously announced or, in the shape of the Transition Fund, already over…), it was pleasantly surprising to hear a good half a dozen people I knew plastered across TV and radio. It is a slightly strange situation to listen to Radio 4 / 5 (depending on how broadsheet / tabloid I was feeling at that point in the day) and hearing them introduce Toby Blume or Rod Schwartz or Geoff Burnand or the ubiquitous Stephen Bubb, or to spot Nigel Kershaw sitting behind David Cameron during his speech.

Then I got to thinking about it from a strategic and communications perspective. If they are committed to sticking with it in the long-term, what would I recommend if I was in their position? NCVO have had an interesting stab at this, called  “How to rescue the Big Society”, which includes some good, concrete suggestions: doubling the Transition Fund to £200m (and loosening the criteria); addressing the issue of irrecoverable VAT; and (an old favourite) simplifying and modernising Gift Aid. The irrepressible Allison Ogden-Newton has added her on the money (and about the money) suggestions in this post, and expert social enterprise blogger David Floyd has added his thoughts here. Both well worth a read.

My five steps would be as follows; I’m not particularly focusing on motivations here, just what I would do:

1) Walk the walk: If the government is encouraging everyone to do their bit and say that we are all in it together, they have to be seen to be doing that themselves. Secondments, mentoring, volunteering and social action from ministers and civil servants at the centre won’t change the problems, but it will start to address that key issue of “we’re not really in it together, are we?”. Creating a ‘civic service’ was part of the Coalition’s manifesto, and I know there are initiatives and plans under way, but these should be strengthened, given prominence and pushed on. It’s not just about the presentational aspect (though that’s important), but also about them being seen by charities and social enterprises to get a genuine understanding of the challenges (and successes) on the front line. Questions like this (Eddie Mair asking Francis Maude about his own volunteering) would then not be so problematic, and they would not be open to articles like this.

2) Be consistent: The Big Society concept is undermined by inconsistency, between departments, ministers, initiatives and so on. One example is the consistent (and I would argue not misplaced) talk from Office of Civil Society ministers about the need to get money to the frontline, and to not just fund umbrella groups, but those organisations who can help with delivery. OK, that works for me, even if ‘umbrella group’ sometimes gets mistaken for ‘infrastructure’ which is not the same thing at all (and important). But then the new strategic partners funding stuff comes out and states (though it’s unclear how flexible this is) that it will only fund “membership”-based groups….which would tend to mean NOT those delivering at the front line, and include a fair few umbrellas…..That’s a small example, but there are more from across different policies and initiatives and, increasingly, between departments (though the latter is nothing new, of course). Where, for example, is the enterprise and entrepreneurship in Michael Gove’s move back to a more traditional rote learning curriculum?

3) Be honest (and radical) about the finance: I would back NCVO’s call to double the Transition Fund (apparently it was £70m oversubscribed), and broaden the criteria. Because government will pay much more in the long-term in costs than for giving short-term support now. And it will help with the big problem at the moment, which is that all the new opportunities and initiatives (Big Society Bank, opening up local commissioning, etc) are coming after the majority of cuts will have happened. Whether we place this at (central) government’s door for frontloading the cuts, meaning local authorities have to cut, or the fact that other things have taken too long to get started, it’s a huge problem. And it is disingenuous for ministers to ask councils to cut bureaucracy and middle management (though I’ve no doubt that exists) rather than the voluntary sector: most councils aren’t announcing some minor tweaks, but thousands of job losses. So the (unringfenced) sector will inevitably not be a priority. So they’ll need some money now to survive (if you think they should), which you can either distribute via local authorities or directly. Loans and equity aren’t going to solve the sector’s finances via the Big Society Bank, and even its new chair has acknowledged as much. But they have at least got it started, which Labour failed to do over many years, and they could help it work by providing support (investment-readiness, HR, growth strategies) alongside, and by ensuring a proportion has to go to organisations with turnover under a £1m.

4) Change the narrative: Cameron had a start at this yesterday, but the reducing of the idea to just volunteering has become prevalent. They need to expand their range of tangible, practical examples of what it means and how it can change or affect people’s lives. This will be easier once they start giving out money and have some case studies (the Transition Fund helped x to survive and now they’ve gone on and done y and earned enough income to…etc), but is needed now. Giving people power is only an idea until they have utilised that power to do something or change something. In the same way that the previous government often used to talk about empowerment, but meant ‘consultation’ or ‘engagement with’ rather than really giving power to. There is some radical shifting going on (in the Localism Bill for example), but it’s not being communicated positively at all, and that should change. The Big Society Awards look like an attempt to do this, but they are unrelated to government policies, so can come across as just more credit-taking for work that was already being done.

5) Think long and be persistent: It seems set that the government will persist with the idea, and I think that’s right: how much of a kicking would they get to their principles if they ditched it less than a year in? And most change happens through dogged commitment and persistence as much as anything else. This is also part of thinking long-term, but that also needs to be evidenced by their actions and decisions. All ministers talk about the importance of measuring social impact and social value, but this as been pretty summarily ignored in the decisions made at national and local levels. This has to change if progress is to be made; whether this means really getting behind the Social Value Bill (as NCVO suggest), ensuring each government initiative has it built in in some way, reducing the scale of contracts (so they are accessible), or incorporating SROI into decision-making processes, I don’t know. But it’s currently not being done at all, and that is doubly damaging: one, because it disincentivises social sector organisations to properly measure their impact, and two, because it means that decisions take immediate financial savings into account, rather than long-term social benefits and associated cost-savings.

I share much of what the sector at large has said, particularly about the impact of the cuts at local level right now. But, as David Floyd points out, in the right context, Big Society is a good idea, and could hold out much opportunity to charities and social enterprises. Whether the current context allows that to happen remains to be seen; certainly, radical action needs to be taken, in communication, strategy and implementation.

And a (Big Society) network newsflash: people are very nice

8 Feb

It’s not been the easiest of weeks Chez Temple, but sometimes that’s when  you start to realise what and who is important. Having beavered away for nigh on 6 years in the world of social enterprise (by the way, it has always been ‘zeitgeisty’ or ‘the next big thing’, every year…), I’ve worked with lots of people and with lots of different organisations. And, by and large, had a thoroughly enjoyable and rewarding time. For all the knocks and criticism the sector takes, it is also populated with genuine, committed and authentic people who are powered by a sense of purpose and social mission that is inspiring and impressive.

What particularly impresses me at times like this is that the people I assume are the busiest, whose life can be counted by the red flashes on their Blackberry, who if you cut in half like a tree trunk you would find rings of to-do lists, these are the people who make time to make the call, send the e-mail, point out the opportunity, or buy the beer. I’m particularly grateful for the beer.

I don’t know whether this is evidence of what Big Society is aiming for, of (bridging or bonding) social capital, of weak ties, of associative network, of trust relationships, or of a community of interest. Or, more plainly, of good old fashioned friendships. I do know that I’m pleased that you seem to get out what you put in, that generosity is prevalent, and that, well, people are very nice.