The rumbling debate about ECT and its takeover and its CIC status (or lack of, now its recycling arm is privately-owned) has continued over on the Society Guardian’s Joe Public blog, with Patrick Butler asking "Does it matter if a social enterprise is bought up by a big corporate?". It’s a fair question, and a pretty decent summary of what the ECT Recycling takeover looks like from an ‘outsider’ point of view.

What’s been interesting has been the comments that have followed from ‘insiders’ such as Craig Deardern-Phillips, Jim Brown and others (I’m SocEnt on there, btw). Beyond the calls for clarity on the detail of the situation, which I echo, it’s been interesting to see how have been categorised (in some cases by themselves) as on the left or right of social enterprise. In summary, this seems to mean those who are concerned with community governance / ownership / democratic accountability are on the "left", while those who are (more) comfortable with influencing, partnering and being absorbed by the mainstream are on the "right". In the case of ECT, as this illuminating post by Rod Schwartz highlights, this means it could be viewed either as a cause for jubilation or concern

As Rod (somewhat provocatively!) writes: "Readers of our blog will know that we normally applaud when successful social entrepreneurs sell out"….before going on to state that ECT maybe didn’t get as good a price as it could have: "Price is not everything but we cannot help but feel (and did ourselves
believe) that ECTR would have been worth more. I do not know if this
went to auction or not." Well, it would be nice to think that ECT was looking for a strategic partner to scale up, and that that is how this all came about. But the reality, which Rod hints at in his talk of ECT’s bankers "not being very supportive" is that this was more of a short-term solution to an imminent problem. ECT already had a relationship with May Gurney, so to that degree the partnerships were being thought about. But this wasn’t a planned auction.

This shareholder vs. stakeholder terrain is too simplistic to divide into left and right, though. Neither stance is easily applied to a political party currently….and social enterprise has always been viewed as being on that centre ground (third way territory) where economic progress meets social justice. What it might instead demonstrate are the different segments along a spectrum from voluntary and charitable through to for-profit. As we go along the spectrum (and as legal structures and investment streams / returns change), different people get more uncomfortable and draw a (personal) line. And people start on that spectrum at different ends (oh, hold on, maybe it is left and right ;0). This is why people like Rod and Nigel Kershaw have berated the CIC for not allowing large enough investment to scale up social enterprise-type organisations, whilst the ‘other camp’ have pointed to the CIC’s lack of rigour around democratic and transparent ownership, and accountability to the community. Or, as one commenter puts it on the Joe Public post:

"I see the immersion of any not-for-private-profit social enterprise into
the ‘for profit’ sector as a surrender to the very set of practices and
values which cause ingrained poverty and exclusion in the first place"

Where do we stand? Well, SSE has never backed a "legal structure" as the solution, and believe that all sorts of different organisations (charities, social enterprises, for-profits) can have positive social impact. Our belief is that it is up to the social entrepreneur to choose the ‘right’ structure for them given their proposed activities, mission, financing, governance and so on. The vast majority choose a non-profit structure (regd. charity / co. ltd by guarantee / CIC etc), but some that have had the greatest social impact have had a for-profit structure. What is definitely needed is a push for all organisations in this field to measure their social impact and communicate and report transparently to their consumers / customers / beneficiaries / community / stakeholders / funders………regardless of their structure.

A final point is that the ECT story should raise the debate about the fetishisation of scale, and the best (most sustainable and most consistent) routes to achieving that. If it’s wanted / right / needed. Because there will be more organisations coming along the ECT route over the coming years.

Been quite a week here at SSE. Both London programmes are sharing a joint study session today: John Bird‘s voice is echoing through the courtyard into our office as I write. And this morning Colin Crooks of Green-Works was the expert witness. Colin’s a great guy: he’s built such an impressive organisation over the last eight years, and he had some interesting things to say over lunch about franchising (a topic we share!), about diversification, about boards and board management, and about growing office recycling in the years to come. And that was just lunch, so I’m assuming the session with the students was enlightening and informative.

Another thing Colin mentioned over lunch was their new(er) work overseas. In particular, they’re doing some extraordinary work in Sierra Leone, where they are basically kitting out a whole town through re-using furniture from the UK: a library, a hospital and 37 schools. Humbling stuff.

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Yesterday we helped facilitate a day for the Social Enterprise Ambassadors which also had some big players in attendance: not only the ambassadors themselves, but also 25 high-ranking civil servants from across different government departments, two ministers (Ed Milband and Phil Hope) and Gus O’Donnell, head of the civil service (as someone said to me, he’s taking time out from running the country). So quite a powerful and intimidating group to work with….but it went well. The programme has taken a while to bed down and to get going (though announced last June, the appointments/launch took place in October-time), and everyone’s committed to making the most of the next two years.

In some ways, the ambassadors programme reminds me a bit of SSE, in that a group of entrepreneurs are, by their nature, not always the easiest group to lead and facilitate….and the group dynamics can take a while to settle (the old forming-storming-norming-performing stuff), particularly when the group doesn’t meet very often, and it’s difficult for all to attend each time. So still a bit of forming and storming yesterday (from some) and more norming (from others). And hopefully performing over the coming months. :0)

Ended the day at the Edge Upstarts Awards. Congratulations to all the winners (who will no doubt appear on the website soon) who included Lily Lapenna of MyBnk, Carmel McConnell of Magic Breakfast, and Forth Sector. And now we’re off to address our sleep deprivation………….