Such a definitions mess that NOBODY can now clear it up?

A few years ago I was asked a question by a lady who had worked for years at a high level in social enterprise - actually for one of the employee ownership apex bodies - and who was also then researching her Masters in Ethical & Responsible Tourism. Quite an expert in social enterprise in fact. She wrote:

I'm going to the Social Enterprise Conference in Cardiff next week.  On their registration form they have Charities and Social Enterprises listed in different delegate fee categories.  I thought that Charities (or more specifically their trading arms) are SEs?  Am I easily confused?

Of course I was already aware that the social enterprise movement had got itself into the most awful definitions mess – but it was this question that really convinced me of the bigger tragedy we were creating.  We had actually succeeded in taking our wonderfully clear and simple and popular message - that you can do business to do good - and muddying it up so thoroughly that hardly anybody could understand it.

This week I find myself once again mulling over the tragedy that is our movement's failure to communicate what 'social enterprise' really means.

A Guardian Online piece this morning worries that 'social enterprise' can mean more than one thing'. 

There's a big Linked-In discussion going on, set up by the question -

A charity structure doesn't seem appropriate, but neither does a LtdCo seem to reflect the positive social impact - has anyone got any thoughts on other structures (eg social enterprise) that might be suitable?

- which perpetuates the misperception that 'a social enterprise' is a type of organisational structure like a company or 'charity structure' – a misperception that has become so prevalent I've seen it set out in a detailed comparison of structure options by a very large organisation actually operating in the social enterprise field.

But perhaps the clearest indication of the depth of this confusion this week comes in this question to the CIC Association - by good people who are perfectly clear about setting up a CIC, but complain that

...we have been confused by the social enterprise angle. We went on a Business Link course on whether social enterprise was for us and were told that we had to be very careful what we wrote in our articles of memorandum [sic] so that we would be seen as a social enterprise when going for local authority funding, yet other specialists like lawyers and other business advisers say that by definition a CIC is a Social Enterprise. Can you help us clear up this confusion please?

Oh If only the social enterprise movement hadn't got itself into such a definitions mess that NOBODY can now clear it up!

While everyone agrees that social enterprise (verb) means using business models and methods to achieve a social benefit - doing business to do good - nobody agrees on what 'a social enterprise' (noun) is.

Some say charities can't be social enterprises.    Some say social enterprises are not-for-profit. Some say social enterprises are for profit – but 'with a purpose'.   Some say more co-ops should be regarded as social enterprises. Some prefer the term 'social business'.   Some say all CICs are social enterprises – since the CIC was actually created specifically for social enterprise and promoted as the 'brand' for social enterprise.   Others say that some CICs are not social enterprises because they do not trade, or at any rate do not earn enough of their income from trading.

There is serious discussion in the CIC Association - which is incidentally now the biggest national social enterprise umbrella body by membership - about abandoning the term 'social enterprise' altogether because it's just too slippery.

At a recent national conference a young woman spoke passonately about her CIC and the good work it was doing.   My neighbour whispered to me that another well known social enterprise umbrella body had not allowed her CIC to join because it was owned by her and her husband – and this didn't fit their particular theology.

I know its because I'm a social enterprise structures specialist that I have to grapple with this confusion every day – and that this also forces on me the knowledge that the optimal structure for doing social enterprise successfully can be based on any organisational model - and that this in turn has led me to try to get across the message that talking and thinking about social enterprise as a kind of organisation, rather than something that individuals and organisations can DO, just causes confusion.

But there's a bit of a marketing man somewhere inside me too – and it's him that despairs of the social enterprise movement's continuing failure to communicate the wonderfully clear and simple and popular message we could have.

Social Enterprise is a mindset not a legal structure

After delivering a number of workshops on behalf of Business Link entitled "Introducing Social Enterprise", my conclusion was this:

Private companies can be driven by greed or focused on customer value... but so can charities

Charities can multiply public funds with donations and voluntary labour, or they can spend too much of their donations on soliciting more donations...

Public sector workers can be driven by social impact, or wrapped up in bureaucracy and turf wars... but so can anyone else.


Work out what you want to change in the world and how you're going to fund it, but whatever structure you choose, don't kid yourself that you're immune to any of the above.

If earning a wage whilst sitting on the board is important for you, don't be a charity

If raising funds from shareholders is important, don't be limited by guarantee!

If securing grants is part of your business model, think carefully before creating shareholders.


"Social Entrepreneurs" are innovators who achieve social benefits in financially sustainable ways, but writing "Social Enterprise" above your front door doesn't make you one any more than walking into McDonalds makes you a Big Mac.

To misquote Maggie Thatcher: "Being a social enterprise is like being a lady" [rather than a woman], "if you have to tell people you are, then you aren't"


Successful social enterprise

Successful social enterprise leaders need to overcome a series of skills challenges.  Learning is the key for leaders of social enterprises.  People need support and learning plans to help them develop the skills required to make a step up to a larger organization. - Jeffrey Nimer

Social or Welfare Enterprise

I think that part of the problem is because the langage itself has become poisoned. Whilst we may all protest, like Humpty-Dumpty, that words mean precisely what I want them to mean, words themselves can take on values and meaning fromt he context in which they are used. Just look at the way the word "gay" has been twisted this way and that over the last few decades. Similarly the word "naughty" by being used solely with children, has diminished from its much harsher original meaning. 

Some time ago I was completing the registration documents for a co-operative of Park Home owners. As I finsiehd I said "congratulations: you are now a social enterprise:" uproar! It turned out that they equated the term social enterprise with the term social housing, i.e. housing for the feckless and undeserving. (Their depiction not mine!) "We are a co-operative", they said, "we own our homes." As I had only just started using the term social enterprise myself at the time, this was an interesting piece of feedback.

I think that the term "social" has now come to carry the meaning of "welfare" to a degree which makes it difficult to rescue the definition. While this does not cause too many problems for charities, who often operate a fundamentally welfare operation in any case, it does cause issues for other forms. In particular I have had great problems sometimes in trying to explain co-operation to people of a "welfarist" disposition. Somehow a group of people practising enlightened self-interest in the common good is seen as no different to bankers ripping us all off! Quite how something which is both called, and operates as. a "society" can not be seen as "social" shows the extent to which the word has lost its meaning.  

Before Social Enterprise we had the "Third Sector."  Perhaps it is time to return to that formulation. Interestingly I see that one of the first organisations to take up the social enterprise brand, SES in Sunderland, has now rebranded again, to sustainable Enterprise Solutions. If in doubt follow the big man...


Norman - your comment about words not meaning just what we want them to mean reminded me of a comment of my own on another website which I think you might find interesting (it was in a discussion of the disunity caused by the so-called Social Enterprie Mark) ...

Craig Dearden-Phillips

February 17, 2012 | 5:37 pm

Is this all going to be remembered in five years time – even by the protagonists? Probably not. So let’s let sleeping dogs lie. Life is too short….


Geof Cox

February 20, 2012 | 9:16 pm

I agree with Craig that the best thing we can all do now is just forget the Mark, and work to heal the regretable divisions it has created (though I do understand this must be hard for those in the South West).

One of the ways we can move on though is by understanding that the Mark came out of a fundamental misunderstanding – between a fractured, oppositional social enterprise movement and a New Labour dream of consensus, in which social divisions and dislocations were less real than some idealised notion of ‘community’.

Some strands of social enterprise, notably worker co-ops, always knew that sometimes oppressed and exploited groups have to stand up for themselves – against the ‘community’ or ‘society’ – and that for these groups the really ethical stand might be to keep your profits.

It is no accident that key protagonists in the Mark conflict come out of organisations spawned politically by New Labour on the one hand – and still hanging on to the fringes of the public sector – and worker co-ops with their independent and oppositional roots on the other.

Any attempt to retrospectively impose coherence on the social enterprise movement is wrong-headed – precisely because what social enterprise means – what we all really understand by it – is a broad and diverse and conflicted movement, not a ‘sector’ with a formal set unifying technical characteristics.

The best analogy is with the environmental movement: you can do your bit by insulating your loft and getting a bike – or you can go completely off-grid and grapple with composting toilets – the movement embraces you all. Within this, there are many ‘marks’ – like the Soil Association organic standard – that for sure have their specific criteria and usefulness – but nobody claims they are THE Environmental Mark.

For me, this is the lesson we need to learn: accept that there isn’t a sharp line between social enterprise and not-social-enterprise, but a fuzzy shading into ethical and sustainable businesses on the one hand and not-for-profit organisations on the other.  And this is a good thing, beacuse hopefully by not drawing that sharp line around ourselves, we make it easier for others to merge in and travel with us.