SBI proposals

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Some proposals for what should be in the Social Business Initiative

A personal note by Toby Johnson

Contents

Main building blocks

An enabling environment

  • adequate legal frameworks – an EU 'Community Interest Company'?
  • welfare bridge to allow people to experiment with new social enterprise ideas
  • policy co-ordination - a dedicated department to bridge silos, or a strong co-ordination mechanism
  • contribution from the various EU funds, e.g. ERDF as well as ESF

A culture

  • recognise vital role of federal bodies in raising awareness among general public, nurturing future activists and supporters. Socially concerned business don’t just materialise from nowhere and nor are they created just by inspiring leaders or “social entrepreneurs”. They require a whole back-up infrastructure to create the culture and skills.
  • give public authorities a ‘reference model’ or ‘route map’ to an appropriate range of services (cf. MES)
  • coherent link with work on social innovation, in which social enterprises play a key role. SIE is an obvious route

Business support services

  • collective entrepreneurship: a break with the individualist-only model of entrepreneurship & recognition of the role of team-led businesses and the motivational and quality benefits of participative management – especially in public service provision (see Italian social co-operatives, Sunderland Home Care Associates etc.)
  • braided – i.e. comprehensive coverage by every start-up agency, backed up by regional/national/transnational specialist. These address issues too complex for general walk-in advice, e.g. sector-specific and to do with specific issues: mixed sources of finance, ethical conundrums etc.
  • incubators and ‘hubs
  • a European knowledge base - a wiki building on Wikipreneurship

Finance

  • enable – but don’t rely exclusively on – private philanthropy. There are also public funds and citizen investment – as well as earnings – to consider:
  • clarity/transparency about ethical investment. Incentives depend on SROI-like measures of social impact
  • innovative financial instruments such as social impact bonds
  • tax breaks for charitable donations - is there enough clarity on social vs. private beneficiaries of different foundations?
  • reverse Basel-dictated banking monopoly so that mutual community-based finance institutions (credit unions) can build a sustainable system for financing local social enterprises
  • mobilise citizens’ savings: promote investment in social enterprises by local people through enabling ethical share issues, as is possible in UK using Industrial & Provident Societies. See Community Shares project http://www.communityshares.org.uk in the UK and in France the Cigales http:www.cigales.asso.fr/spip.php?rubrique6.
  • microfinance isn’t really the point, but could there be an EPMF-style social enterprise investment fund? I.e. EU shows the way and brings in corporate & private investors. Or would EPMF invest in social business investment funds?
  • can pension funds consider not just the future money income but also the future living conditions of their beneficiaries as a legitimate investment goal? If so, they could invest directly in e.g. improving care

Routes to consolidation & growth

  • specialist pilot operations in key sectors e.g. care
  • recognition of social impact in public procurement – e.g. the norm should become not the cheapest offer nor even the “most economically advantageous offer”, but the most socio-economically attractive offer (see Intergroup_110412#Abolishing the cheapest offer)
  • it should be ensured that restrictions on state aid to private enterprises do not prevent public services becoming more user-oriented

Possible role of ESF

Fund design

  • easier access to Structural Funds by social enterprises: smaller projects, larger advance payments, global grants, allow in-kind matching
  • some good practice from Sweden is:
    • a strong focus on local/regional problems through a contextual analysis, balancing national and local political forces, and using synergy between the Funds
    • integrating stakeholders in programme procedures through membership of the 8 regional eight Structural Fund Partnerships (SFPs)
    • animation during implementation – five national thematic groups including on Social Enterprise (also on youth, integration, workplace learning & equality).
    • monitoring and evaluating the partnership dimension
  • enable social, risk-taking through a results-oriented and portfolio-based approach – i.e. it would be accepted that in view of the results achieved overall, some parts of a portfolio might fail. This requires lifting an absolute insistence on measuring inputs, and a shift to measuring outputs/impacts – but not intensifying control by measuring both, which would be worse!

Tools

Support Europeanisation of the necessary tools:

  • SROI. Sweden has run a scheme to train 300 people to use SROI. An online tool already exists http://www.socialevaluator.eu which can ease dissemination
  • Social added value assessment tool developed by Lombardy within BFSE

Implementation

Help Member States to implement learning of what was actually shown during EQUAL to be doable in an ESF framework:

  • government recognition & strategy
  • legal & financial framework
  • local co-planning partnerships
  • braided business support
  • growth sector strategies
  • access to markets – public procurement
  • social impact measurement

Gear up Managing authorities

MAs need both a vision and subject expertise. The forthcoming results of the BFSE network ca be promoted. They addressing 5 key issues:

  • Community law and social services of general interest (SSGIs) - state aid & public procurement
  • Measuring social added value and quality standards - including SROI & social accounting
  • Socially responsible public procurement (SRPP) and public-social partnership (PSPP)
  • Social franchising
  • Financial instruments and mechanisms of fund allocation to social economy

Promote social enterprise projects

  • encourage strong transnational partnerships (e.g. possibility of thematic partner forum on the social economy theme in late 2012).
  • raise visibility by organising events (cf. EQUAL chain of events)
  • promote good practice by commissioning a set of case studies of social business-related projects
  • establish a ‘brains trust’ of social entrepreneurs to advise ESF machinery – a bit like ‘ambassadors