Thursday round-up: Sunlight, shares, scale, SROI

Quick round-up, as there seems to be lots coming in and lots of interest:

– Peter Holbrook has written a blog post about David Cameron launching the Tory green paper at Sunlight Development Trust, and has some interesting initial thoughts from a practitioner’s point of view on its recommendations; more reaction on Bubb’s blog (who’s on rare form of late), here, and here.

– Paul Miller of School of Everything has written an interesting post about why their organisation is a company limited by shares and how they balance the need for start-up investment (in a silicon valley web2.0 type way) with a social mission at their heart….

– Fall-out from the ECT news continues; apparently the recycling arm is keeping its CIC structure, despite (or as well as?) being taken over by a private sector operator….will be interesting to see how that turns out. In the meantime, here’s a piece in New Start about it all; as I mentioned previously, this can be seen as a positive as much as a negative, but I do think that the issue of scale is at the heart of it all

– On which subject (scale), some food for thought: The Fetishization of Scaling Up (Small is beautiful versus Big is essential….and local+local+local = global…) and a magazine/event called De-Growth

– The SROI-UK conference has spawned a network: SROI-UK is chaired by the evaluation legend Jeremy Nicholls, who we’ll be doing some work with in mid-June

DEFRA announced a big £4.6 million deal for the various third sector waste and recycling networks who have come together to form a new organisation, REconomy. Huge kudos to (former SSE Director of Learning) Matthew Thomson for masterminding the deal: word on the street is that the celebrations were substantial…..but well-deserved.

– Interesting article by Matthew Taylor of the RSA on the (independence of the) third sector and the need for accountability and transparency

How to set up a refugee community organisation; consult this guide?

– And a brief final thought: Word of mouth is not created, it is co-created

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Two big stories: ECT takeover + Tory Green paper

BREAKING NEWS. Oh yes. Two big stories, both with a ‘green’ slant.

The first is that the Tories have just released their green paper on what they would do to/with/for the third sector if they were in government.Launched at Sunlight Development Trust, It’s the first salvo in what is intended to be a constructive and consultative dialogue between the party and the sector. I’ve only just downloaded it and am yet to digest (95 pages over lunch was beyond me), but our friends at Third Sector online have helpfully done so and come up with the 20 headline pledges.

Of particular relevance to this world:

"•    Creating a network of social enterprise zones to provide incentives for social investment in deprived communities

•    Setting up a Social Investment Bank as a wholesaler of ‘patient capital’ to a wide range of social investment institutions

•    Creating a powerful ‘Office for Civil Society’ at the heart of government to fight for the interests of charities, social enterprises, co-operatives and community groups"

Looks interesting, pretty well-thought through and pretty sector-friendly, even if a fair bit of it has been announced one way or another in the past. The OCS replacing the OTS would seem to indicate that NCVO’s advocacy of ‘civil society’ as a concept has fallen on receptive ears. More soon after several tube commute reads.

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Second big story is that ECT Group, widely viewed and lauded as one of the leading social enterprises in the movement (and certainly one of the largest) has had the recycling part of its business taken over by May Gurney, a private firm. Their press release includes the following:

"ECT Recycling – part of the ECT Group with 1,100 employees – has been
acquired by May Gurney, one of the UK’s most successful maintenance and
support services companies and listed on the London stock market (AIM).


First and foremost, it’s ‘business as usual’ at ECT Recycling – the
current strong management team will remain in place, led by Stephen
Sears, and the focus will remain on delivering service quality for its
customers and its customers’ customers – members of the public.

For some time, ECT Recycling had been exploring ways to secure its
future and to build upon its successful business formula in delivering
municipal waste services to local authorities.

Stephen Sears, who has led the development of ECT since 1980 said: “ECT
has been looking for a partner for our recycling and waste management
business with a good reputation in the local authority market place and
with the commercial muscle to help us to secure bigger contracts. This
will allow us to deliver our social and environmental objectives as
well as the financial results that are essential to continued success."
 

Which leaves the ECT Group back to its original core business: the CT of community transport, having sold its various other businesses (railways, health care etc.). A few questions fall out of this, of course. Not least that ECT Recycling was a CIC, so is this the first CIC to be taken over? (and how does that work re. asset lock etc.?) Is this a strategic move separating out the two businesses, or in response to more fundamental problems? And if ECT generally needed to find a bigger partner (with "more commercial muscle") to secure bigger contracts, what does that mean for procurement/commissioning for all the other third sector / social enterprises out there? (many of whom are significantly smaller).

New Start magazine rang me this morning to comment, and I kept it largely generic (because I don’t know enough about ECT’s business / governance etc; see q’s above) but did say that we shouldn’t overreact as a sector or movement. More of this will happen over the coming years, hopefully in both directions, as mainstream business is influenced as well as threatened by ethical and mission-led competitors.

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Philanthrocapitalism and new clothes

One of the frustrations of recent events I’ve attended has been the common assumption that what comes from business into the social sector must be "better": venture philanthropy will revolutionise philanthropy, coherent investment-style metrics will revolutionise social impact, risk investment, social stock exchanges and loan funds will provide liquidity for the sector, and social enterprises will scale up in order to meet the challenges they face. Etc.

As regular readers of this blog will know, SSE‘s view of social entrepreneurship is an inclusive, broad-based one, not one that insists that social entrepreneurs must "have large-scale impact" to warrant the label, nor one that insists that social entrepreneurs must "earn income and trade", nor one that thinks impact is only delivered by an organisation’s services, and not also through its operations in the round. For us, at its simplest level, social entrepreneurship is about entrepreneurial individuals applying themselves for social / public benefit rather than solely personal gain.

Further to this, the sector an organisation comes from, its legal structure, or its financing is not a guarantee of efficiency, quality, greater impact, excellence or even, in some cases, competence. Measurement in this sector is more difficult, intangible, and (at times) nebulous than the financial bottom line. Venture philanthropists have a more sensitive, complex role than venture capitalists….and so on. In reality, there should be knowledge transfer and learning between sectors (and always has been); indeed, the action learning process that underpins the SSE programme was originally pioneered in large companies for senior management. And, when ‘business-like’ is equated with more professional or making best use of its money (and people), then no-one has an issue with that either…

But, currently, it has felt rather one way (though I wouldn’t wish to generalise: there are those who have a much more nuanced understanding all along the spectrum): and focusing more on business practice in the social sector, rather than achieving greater social equity and transformation. Hence my welcome for Paul Farmer’s remarks at the Skoll event recently. And hence also my interest in this new book by Michael Edwards: Just Another Emperor? The myths and realities of philanthropcapitalism. It looks at the application of business practices to the social sector / philanthropy in great detail and, as far as I’ve read, speaks much sense, as well as provoking debate. I won’t go on too much more, but would recommend starting with the transcript from the launch downloadable here, and I’ll end this rather long post with a short quote from that which gives you a flavour of the argument:

"[Another] area where philanthrocapitalism claims to make an impact is in
improving the financial and the management capacities of civil society organisations.
However, I’ve always been confused by the way venture philanthropists and social
entrepreneurs differentiate themselves from the rest of civil society on the grounds
that they are “results based” or “high performance”, implying that everyone else is
uninterested in outcomes. Now sure, there are mediocre citizens groups, that’s true,
just as there are mediocre businesses, mediocre venture philanthropists, mediocre
social entrepreneurs and mediocre government departments. So why import the
practices of mediocrity into the social sectors, is Jim Collin’s conclusion, of Good to
Great fame.

What separates good and bad performance has very little to do with
business thinking or involvement in the market. What separates them is whether
they have a clear focus to their work, strong learning and accountability mechanisms
that keep them heading in the right direction and the ability to motivate their staff, or
volunteers, to reach the highest collective levels of performance. There’s no evidence
I know of which proves that business thinking, or business experience, can generate
those advances more effectively than experience in other sectors."

   

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Wednesday round-up: OTS, Olympics, Obama

In a radical break with tradition, here’s a Wednesday round-up for you of relevant news, views and opinion.

– First up, I’ve tried to capture a fair bit of Skoll, and post-Skoll coverage: that would be a links page on its own, though, so best viewed and checked out via our Del.icio.us bookmarks link at http://del.icio.us/SSE/Skoll which encompasses a pretty decent cross-section….

– A social enterprise business park as an Olympic legacy: sounds good. And most interestingly, put forward by someone who is a practitioner, not an umbrella org looking for funds; and we used Calverts for our last big printing job (highly recommended)

When Muhammad met Liam (Yunus and Black): interesting conversation transcript

– A compare and contrast on social franchising (US- based) from Social Enterprise Reporter

CSR as a business strategy

– Decent piece on (social) entrepreneurship / government policy in HBR; incidentally, there is a piece in the current Stanford Social Innovation Review which suggests what the new US president (come on Obama!) should do in this field. More on this soon…

– Also in SSIR is a piece about the relationship between producitivity and impact in the non-profit sector; it’s called "More Bang for the Buck" which gives you an indication of where it’s coming from. I think I took more from this case study

– Big welcome to the first 4 UK Ashoka Fellows, and congrats to Ben Metz for pulling off a good event the other evening. The Fellows are Camila Batmanghelidjh, Al Harris, Bob Paterson, and Faisel Rahman.

– OTS has released a piece of research from Rocket Science on Social Enterprise Networks. I found this useful and informative, but I’m not sure if that’s only because I’m approaching sector-geek status. What the report does do, alongside give a good overview of regional and sub-regional networks, is emphasise the need for more peer-to-peer learning / networks….and wisely pulls out SSE as a case study. :0)

More soon, when the frenzy of the last few weeks calms itself…..do buy some extra reading in the meantime :0)

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Blair to be Third Sector envoy

Third Sector have reported that Tony Blair is to take on a more troublesome and problematic conflict than the Middle East: that between ACEVO, NCVO and DSC. Acting primarily as an intermediary between disputing factions, Blair will use his substantial experience…

…oh, ok, April Fool etc. Good effort from Third Sector, though. Up till "I feel the hand of Stuart Etherington on my shoulder", they almost had me… :0)

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