Is Social Enterprise the Answer?Posted: July 22, 2010
There is a flurry of calls and offers of dinner coming my way from fellow CEO’s of charities keen to know more about how Cyrenians go about developing successful social enterprises. It’s always good to hear from colleagues and to find time to share our leadership experiences and it’s flattering that people see our enterprises as successful. Please do call, but can I say up front that the answer to the question set above depends on what you want it to be the answer to!
Inevitably the fresh wave of interest is stoked by the huge fear of loss of public sector funding stalking the sector just now. It is understandable. Although the unprecedented scale of cuts recently revealed is truly shocking, we’ve been anticipating the scenario for several years now: particularly those of us who work with unpopular causes always hit in the first wave of cuts. Is social enterprise a quick escape route for charities losing public sector funding? Unlikely.
Cyrenians started on its social enterprise strategy nearly 6 years ago: with a lot of thinking and discussion in advance of that. We were already doing things that had the potential to make money, like Cyrenians Farm and Good Food but which needed to be done quite differently to generate profit alongside the social and environmental benefit that is our raison d’être. Culturally the charity was not averse to ‘doing business’ – with successful business people on the Board and a long history of interactivity with the business sector. We also had investment from Futurebuilders and a year long secondment from Standard Life, providing two excellent people to design and spearhead an organisation change programme over 2005/07. We had a lot going in our favour for making the transition from being a traditional charity to one that can operate on a commercial basis, when we want to.
It is no quick fix to losing your funding. There are some inspiring examples of charities using enterprise to turn back from the brink of oblivion – Kibble comes to mind. Nor should government, of whatever form, expect charities to suddenly become good at realizing commercial potential in their activities, where it exists.
Commercial income, although growing, still only made up around 15% of Cyrenians income in 2009/10, (we don’t include public sector contracts in that). Our new business, CORE, is facing all the same pressures of a young business while trying to provide social and environmental benefit in addition to commercial success. It’s tough going, even with a great business proposition.
The big win is that seventy people last year benefited hugely from being trainees in the three enterprises with this being the stepping stone into a better future.
The question for Cyrenians is this: How do we bring effective help to as many people as possible? To this question, social enterprise is an important part of the answer.