Social enterprise needs definition to go mainstream

The Social Enterprise Mark is the certification authority for social enterprises. The certification process does not attempt to prescribe business, organisation, or any legal structures that they may adopt, such as charities, community interest companies, limited by share or by guarantee.

The Mark was originally developed with the sector, for the sector. It took the widely recognised and accepted definition of social enterprise and conducted extensive consultation and research, which led to the development of the certification criteria. These are rigorously applied and overseen by an independent certification panel to assure credibility and consistency.

If you agree that social enterprises, with any legal structure from CLG, CIC to charities, can develop along a spectrum from start-up, emerging, to established and mature, there will always be a debate around which point on the spectrum any criteria or assessment can be applied. This will inevitably lead to extensive debate around definitions and application of any criteria.

As Malcolm Sutton, a Mark-certified Tender Management Community Services CIC, explains “I would argue that all social enterprises have an element of ‘charity’ in them – how different is the ‘social purpose’ from the ‘charitable objective’? And equally that the majority of charities have to have an element of ‘business’ to what they do.”

The criteria are not set in stone and continue to respond to the needs of social enterprises. We are independent of any public funding and just 18 months old, but with rigorous assessment process, the number of Mark holders is progressing steadily.

Social enterprises are looking for accreditation to prove they operate as genuine social enterprises, and we give them the tools to differentiate themselves. In the light of the increasing demand for shareholder transparency, the Mark provides the only credible indicator that shareholder profit is not the motivation for operation.

Internationally, negotiations are being held with many countries, including Finland and South Africa, where the Mark is of great interest as an aspirational goal for the social enterprise movement.

Social purpose contributions or corporate social responsibility are good in their own way, but do not address the core principle that social enterprises exist to benefit people and planet. If there is any question on why social enterprises should differentiate themselves from private enterprise, read ‘Academic publishers make Murdoch look like a socialist’. With corporations able to generate private profit margins of up to 36% from work that has been publicly funded, there has never been a better time for social enterprises to demonstrate their better way of doing business.

What Mark holders have to say

Daniel Rous, Furniture Plus

“Yet again, we find ourselves in a discussion over labelling. As long as (in no particular order) OSCR, Companies House, Inland Revenue and the general public are happy with what is being done then let’s just get on with reaping social benefit for as many as possible.”

Chris Bailey, Westway Development Trust

“What matters in social enterprise is that we do not have people setting up things and calling them social enterprises when they are not, or when those organisations work in a way which is at odds with what the general public expects of a social enterprise.”

Lucy Findlay is Managing Director of the Social Enterprise Mark Company, which aims to increase mainstream understanding of social enterprises as a better way of doing business in the UK and beyond.