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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

Can information drive behaviour change?

8 Sep

Been wondering what to blog about after another hectic month or two. Then I was talking to someone this week about retrofitting social housing, and the need for this to be accompanied by behaviour change….and it occurred to me that the area where technology meets behaviour change was pretty pertinent at the moment. It was interesting to learn about the work going on in preparation for the Green Deal (which is what our conversation was about), and how the technical changes (eg. photovoltaic cells on roof, new boilers, new insulation, better glazed windows) need to be matched by behaviour change. Not much point changing all the windows if the resident opens a window rather than turn the heating down…which led to a further chat about whether some of the nudge-type techniques (including how much money neighbours have saved on utility bills, smart meters etc) would really work.

I love reading behavioural economics books like Nudge and they are very persuasive, but I have found myself questioning whether it isn’t just a way, from a policymaker’s point of view, of ducking difficult decisions. This post by Will Wilkinson, which I was alerted to on Twitter, takes that thought and expands upon it at length: Behavioural Economics: Ammo for Bullshitters. Well worth a read, especially because it deals exactly with the electricity bill example I mention above (“showing someone their neighbor’s bill is not the best way to get them to cut their own bill. The best way is to charge an amount that reflects the true cost of the electricity”).

That leads me on to SoCap 2011 which is a conference about the intersection between money and meaning, or more prosaically about all things social investment and impact investing in the US and beyond. I’ve watched a few of the sessions livestreamed, and the opening plenary had an interesting discussion which included Mathieu Senard of Alter Eco and Kevin Starr of the Mulago Foundation. They had an interesting conversation about whether they wanted their products to be judged purely on their place in the market (i.e. a bag bought because it’s a great bag, not because of any other reason…) or whether they wanted to utilise the stories behind the product to sell it (potentially at a premium). Is it enough to sell the products and have the associated social impact or does that waste the opportunity to utilise the products to create awareness and behaviour change (and potentially more impact)? That can be a chicken and egg type of conversation, as SoCap founder Kevin Jones pointed out: “Once you’ve changed the world, you’ll be able to sell way more bags…”.

Stories that hold the meaning proved crucial when doing my work in Beijing recently (running a learning programme with university students to enable them to run their community projects and potentially become social entrepreneurs). Case studies that had resonance to them brought them and the subject alive, so I was drawing on all the examples I knew of over the three days of the programme. And used videos liberally (of Catch 22, MyBnk, We Make A Change and many more)…. Inevitably with a cohort of 75 (!), some were more engaged than others, but I’m hopeful that some of the information and inspiration in those stories does lead to behaviour change in some small ways.

Finally, to tie all of that together (he says hopefully), I found a whole series of links from Beth Kanter on infographics and their use for charities and social enterprises (found because she sent them to me!). See Infographics for Non-Profits: the New Storytelling, this post on infographics and this post on video infographics. All worth a look for anyone who’s interested in this whole area of stories, information, meaning and changing behaviour. I’ll leave you with the best video I’ve seen of late (I think this may even be an infographic), which is an animated colour representation of Kiva’s loans over the last five years. I tried to spot my half a dozen loans, but no luck. Enjoy:

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.