Social Enterprise: Social business, community and capitalism for good

I had the pleasure of spending some time with education hacker Jonathan Soma of the Brooklyn Brainery in New York City a few weeks ago. I was there to talk about what makes a successful community-led social enterprise. The Brainery is run on a DIY, “if you can teach it, we can host it” model which acts as a networking service to connect makers, teachers and super hobbyists to people who want to learn new skills. Taking the non-traditional route, the business is run from their wonderful shop front space, half classroom and half social salon, far removed from the formal learning centres of the local college. This is a familiar trend. As DIY creative, community-led and hackspace models become more popular we see evolving iterations of the concept, each one taking a unique approach to servicing their local marketplace and particular field of interest. But for me the most interesting thing to come out of our conversations was uncovering the different nuances in the language that describes the social sector, both here and in the US. Social entrepreneurship in the UK is still broadly associated with charity, philanthropy and 'giving', whether it’s financial contribution or voluntary time. Talking to my Brooklyn counterpart there seems to be a much more developed culture of accepting social business in profit-making terms in NYC. This reinforced my belief that we need a much more open and adaptive framework to talk about social enterprise and social impact if we are to capture the true essence of the great work that is happening across the UK on a small business and community level. The traditional model of aid donation and compassionate giving, while still entirely valid and needed for NGOs and charities, doesn’t really capture the realities of the new co-operative social business landscape. Where socially focused service and product development projects may have once been commissioned by the public sector and funded organisations, new models see creative and enterprising people expanding the sector to encompass a much broader definition of social and community enterprise. These new social entrepreneurs are developing innovative combinations of ecologically sound, problem solving, high impact products and services for a market of environmentally, socially and community aware consumers, most of whom see charity giving as separate from the positive choice they are making every time they spend some of their pay cheque. Much like the founders of the Brooklyn Brainery, who spotted a need for a marketable and affordable space for adult hobbyist education, they have successfully exploited gaps in the market by approaching their ideas like a traditional business. For Jonathan Soma, this has enabled him to create value for both the customer and the business, feeding into a robust model which sees the Brainery continue to provide a valuable service to their community. It is important to recognise the need for every business to make money, regardless of their social ambition or problem solving vision. If it cannot do that, it’s not a business; it is more akin to a charity. When said like that it sounds simple, but this is where social business ideas fall down, in thinking that social and community aims mean a piecemeal existence of grants and funding subsidies, that things like profit are the concern of ‘real’ businesses that generate money but not social impact. That’s not to say that a little support along the way isn’t helpful. Small businesses need all the help they can get, especially if they are carving out new markets like many social entrepreneurs. But the true mark of a successful social enterprise is that through delivering its social objective it can sustain itself, and when it does make additional profit it’s put back into the business to fuel even more social impact. Thankfully the new savvy social entrepreneur feels comfortable partnering their social aims with the needs of running a business, like paying the staff, allocating marketing budgets and factoring in sales costs. More interesting, though, is the new savvy consumer who understands this concept and wants to be part of the movement, as evidenced by the lightning quick uptake of social enterprise crowdfunding campaigns and the rise of member owned co-operatives. Websites like Sponsume.com have proven there is an appetite for community-customer investment in businesses that mirror the values of those individuals as well as providing products and services to them directly. For me the most exciting thing of all is the degree of choice this now offers us – this natural broadening of the term ‘social enterprise’ to mean exactly what it needs to mean for the community it’s serving. We are entering a very proactive and interactive phase for social business. Online communities have become galvanised to make real world ideas happen and hyper local businesses can build successful organisations in their own community and share that knowledge with a neighbourhood 3,000 miles away. To return to my opening assertion, it seems there is a mismatch between many people’s perceptions of social enterprise and what’s actually happening. People I encounter every day who are from outside the sector see social enterprise as a second-rate business platform, a freeloading model for donations and grants, delivering services and products that are for the few and not for them. It’s clear there needs to be a shift in thinking about this burgeoning and pioneering sector. The really positive thing is that through community engagement, savvy shopping and micro investment into social enterprise, we are already making it happen. In doing so we can be a positive force to define and shape social impact, and ultimately be confident of the value we add and receive in return from a sustainable social enterprise. For more information about ROCO, the creative business co-op, visit theroco.org or email andrea@theroco.org )