A recently-retired senior civil servant emailed me recently, saying “I have a smallish but not insignificant sum to invest and you’ve sold me the social enterprise vision. What investment opportunities exist within the sector – do you know of any?” at moments like this the realities of connecting demand and supply – both exciting and depressing – come crashing in.
Access to more mainstream capital is critical if we are going to realise our ambitions for social enterprise. While many incredible social enterprises don’t have an appetite or ambition for turbo-charged growth, many, many do. While it’s true that the Co operative Group has grown its business only through reinvesting its own profits, plenty in our movement don’t want to wait decades to realise the growth they could achieve if capital were more accessible.
Of course the Big Society Bank is a welcome addition but let’s be realistic. It’s not and will never be the whole answer to our needs.
The much-discussed Social Stock Exchange perhaps provides a bigger opportunity for us. We know there are people out there who live ethical lives; consumer trends suggest that this market is resilient and growing. But while it’s easier and easier to buy with a conscience how easy is it to invest with the same level of diligence? Although ethical savings and pension funds are now more common I question just how ethical these are. I have a small green pension fund but I suspect it’s a very pale shade of green.
A social stock exchange could be a game changer – it could bring together successful socially beneficial enterprises and connect them to sources of investment that are hungry for a blended return.
We have nearly a million people working within the sector who could be potential investors, we have any army of supporters across other sectors, we have charities with large reserves in traditional and often dirty investment portfolios and billions of pounds in local authority investments. This money could be working for our communities, stimulating growth and innovation rather than simply looking for the highest and often risky financial return (remember local authority Icelandic investments anyone?). A social stock exchange could realise the level of investment in our sector that we need to fuel growth and exploit opportunity – and most social investors would be happy with bonds rather than simple equity – so ownership and values need not be compromised in the process. I’m supporting Pradeep and Mark in the creation of the Social Stock Exchange – I’m hoping you do too.
On a slightly different note I thought Monday’s FT article on future outsourcing was very revealing. The big companies that churn billions of pounds of tax payers money simply don’t see the wider sector as a threat:
“there is no way on the planet that these contracts are going to be let to a charity…the (charitable) sector will not be a massive player in the delivery of public services as they “simply don’t have the scale and can’t bear the risk of things going wrong.”
They could be right but, as any smart cookie knows, you should never underestimate your competitors. This sort of lazy complacency may well be their future Achilles heel. Of course we recognise that scale and capitalization remain major challenges for us but we are developing fast – new ideas around Social Enterprise LLP’s, new bonds, growing public awareness, lord Hodgson’s red tape task force for charities and social enterprises , ever growing evidence of our sector’s resilience, economic success and social value are putting us in an increasingly better place SO, despite the dreadful economic circumstance the future could still be ours. Our soon-to-be launched State of Social Enterprise survey will reveal some reasons to be cheerful and some reasons to feel very proud. More to follow on that one!
Finally I was in Edinburgh last week to meet peers from Scotland, Wales and Northern Ireland. Exciting stuff is happening in Scotland where a net increase in resources for the sector has been announced. It appears rhetoric is turning into reality in Scotland. New opportunities are emerging in Wales although the cuts are hitting poorer communities incredibly hard and the Northern Ireland Assembly are slowly but surely waking up to the role of social enterprise in developing a robust and resilient mixed economy. Across the UK nations we have agreed to work more closely than ever, syndicate content, develop closer policy alignment and do much more co-production than ever before.
We finished the meeting with a visit to St Jude’s laundry which Forth Sector has recently acquired. An amazing place providing the cleanest, freshest laundry to corporate and private customers – it even has a royal warrant.
It was a great way, once again, to reconnect with the values, innovation, impact and diversity of the sector. It currently employs around 40 staff. A thriving, competitive, viable business that is working with some of the most marginalised people in our society. It has ambition, it has soul, it has happy customers and I’m in no doubt it has a great future.