A lively discussion about the definition of a social enterprise was seen on Co-opNet - the UK-based e-mail list - over the past few weeks.

While there was no agreement among participants that led to an explicit definition of a social enterprise, the debate generated lots of interesting interpretations of the term. Jim Brown, who asked whether the definition of social enterprises as addressed by the Social Enterprise Unit (SEU) at the UK Dept of Trade and Industry (DTI) is adequate, sparked the debate.

The SEU had organised a seminar in October 2001 on social enterprises and the following statement was made by the Unit:

"Definition of Social Enterprise
We see advantages in keeping the definition fairly broad. Most would agree that a social enterprise is a business with social objectives. It combines entrepreneurial skills with strong social purpose. Profits are re-invested in the business or in the community, offering the possibility of effective, sustainable self-help leading to wider benefits.
That definition, though, could be applied to many organisations, from struggling businesses run by a couple of people and almost wholly reliant on grants, donations or help in kind, through to large, successful trading companies in employee ownership.
While we can learn from both ends of the spectrum, our focus for action should be the middle ground. We should not rule out a business because it has part shareholders, providing its primary purpose is not simply to deliver shareholder value, nor include a business just because it is run as a co-operative. Nor should we exclude those that have been established through grants or donations and use some unpaid help, and continue to rely in part on such funding and assistance, providing that they aim to generate a surplus through trading and to become increasingly self-sufficient while retaining their social purpose."

More details on the seminar is available at DTI's social enterprise website: http://www.dti.gov.uk/socialenterprise/index.htm.

In the debate, Bob Cannell suggested that a social enterprise is undefinable other than through a broad brush approach. He wrote that the "... problem is that different people want social enterprise to mean quite different things. ... shows how confused this Social Enterprise fad has become. We are speaking different languages all at once. ... Our game is the politics of co-operation, not accommodating re-branded voluntary sector ideas."

Andy Hansford agreed saying that "... There is almost no point at this stage in trying to get the social enterprise train to work out what it should be carrying." Len Burch made the point that "... however you might like to define Social Enterprise, co-operation has got nothing to do with those public relations activities that give money to charities, or support outside good causes, or sponsor undefined social goals - or any such ends or objectives (called values) whether engaged in (as normally) for quite ulterior motives, disingenuous sponsorship purposes and self-interest, or whether (hardly ever) altruistically otherwise." Nic Bliss suggested that what terms like social enterprise or social economy means does not matter as long as the Government and others adopt supportive policies with regard to organisations within the social economy.

Nic Bliss also referred to a recent definition of social enterprise: "social enterprise means an organisation that achieves a variety of social aims predominantly but not necessarily exclusively, by trading in good and services". He was of the view that this definition is so broad that it would include any business with social aims. He encouraged other members of the list to campaign for support co-operative values and principles. He wrote that "... am not particularly precious about the co-operative legal form - its the values and principles that count".

Commenting on the wider social enterprise/co-operative discussion, Phil Gaskin expressed the view that the co-operative movement needs to develop and protect it's own unique identity. He added that "... for reasons best known to the government, they don't want to talk about co-ops, but are quite relaxed about social enterprise."

Australian discussions on social enterprise have been similarly inconclusive. In an article, What is Social Entrepreneurship? - by Pamela Hartigan, Managing Director, Schwab Foundation for Social Entrepreneurship (http://www.schwabfound.org), Geneva, refers to their quest for the definition of social entrepreneurship. (article available from http://www.social-e.org.au/). She wrote that "... We found ourselves in the strange situation of having to define social entrepreneurship by what it is not". Ms Hartigan suggests that social entrepreneurs can be found in the business sector and in the charity sector and describes social entrepreneurship as a term that captures a unique approach to social problems, an approach that cuts across sectors and disciplines. She adds that "... It is an approach that is grounded in certain values and processes that are common to each social entrepreneur, independent of whether his or her area of focus has been education, health, welfare reform, human rights, workers' rights, environment, economic development, agriculture ... and so on. It is those values and processes that set the social entrepreneur apart from the rest of the crowd of well-meaning people and organizations who dedicate their lives to social improvement."

In identifying the underlying core values that drive social entrepreneurs Ms Hartigan cites:

• an unwavering belief in the innate capacity of all people to contribute meaningfully to economic and social development,
• a driving passion to make that happen, be it through a new invention, a different approach, a more rigorous application of known technologies or strategies, or a combination of all three.
• a practical but innovative stance to a social problem, coupled with dogged determination, that allows them to break away from constraints imposed by ideology or field of discipline, and pushes them to take risks that others wouldn't dare.
• a healthy impatience. They don't do well in bureaucracies because they don't wait for things to happen. They are social change agents that make things happen.

Ms Hartigan suspects that "... Australian social entrepreneurs face the social entrepreneur-as-charity misrepresentation continuously. The false dichotomy between those who work in the social arena and those who work in the financial arena will continue as long as the legal structures and mentality exist dividing what is "profitable" and "what is not"... what type of work gets a tax break and what does not."

Comment

The debate about social enterprises raises some interesting questions. There has been unanimous acknowledgment that the co-operative structure needs to be modified from its traditional image to an organisational form that suits the needs of the 21st century. Some have suggested that the underlying values, such as co-operation, are more important that the form itself. In effect, the approach was to revive the co-operative movement through a reiteration of the core values of the traditional co-operatives - positioning them within the broader set of similar organisations.

Clearly this approach has benefits although values would not mean anything unless they are practiced. It can be argued that a formal organisation structure, such as a co-operative formed on the basis of widely accepted set of principles, would elicit a strong commitment to the values through the organisational rules and practices. The evolution of co-operatives over the years, through an identified common set of values and practices, has made them the 'most organised' sector within the social economy. Obviously, there would be many lessons that can be drawn from that journey to be used in shaping the future of the co-operatives sector as well the wider social economy.

The other approach has been the creation of social enterprises; totally recreating 'co-operative structures' using currently accepted values as the foundation. Thus, the current emphasis on entrepreneurship is given prominence, albeit modified with social objectives. As the definition of social enterprises submitted by the Social Enterprise Unit (SEU) at the UK Dept of Trade and Industry (DTI) states "... a social enterprise is a business with social objectives. It combines entrepreneurial skills with strong social purpose." Clearly, such a combination would work only under circumstances where the social objectives line up with the personal aspirations of the entrepreneurs.