Background and hints for implementation - visibility
Five aspects of identity and visibility
Identity and visibility is a complex theme, which is much debated among social enterprises, and contains a number of stumbling blocks for the carrying through of policy initiatives. Because social enterprises thrive through the commitment of their members, it is important that government initiatives should draw up policies in full consultation with social enterprises, so as to ensure that they ‘own’ the results.
From the point of view of social enterprises, a strong identity is a powerful motivating force for members, and is the basis for building visibility. Identity needs to be strongly felt and clear. At European level, the identity of social enterprises is converging around the definition adopted by the Social Business Initiative (SBI), which is based on three dimensions:
- a primary social objective
- limited profit distribution
- participative governance involving workers and users
This definition does clearly distinguish social enterprise from corporate social responsibility, but it is much more permissive than the social economy principles which are the norm in most parts of Europe. Notably, the SBI definition does not insist on democratic ownership, and is deliberately relatively investor-friendly, allowing up to half of profits to be distributed to capital providers. It does however recognise that non-profits can operate effectively as social enterprises. Various national legal structures incorporate all or some of these criteria. There is thus a diverse sector and a lively debate on what the best forms are to allow growth and sustainability without risking loss of social mission.
The theme can be divided into six aspects:
1. Ensuring adequate legal forms are available
There are two main paths of development of social enterprise legal forms, the first deriving from the social economy statutes of co-operatives, mutuals, associations and foundations, and the second from commercial companies which trade in a social beneficial way.
The trade associations representing the social economy are concerned to promote the benefits of their particular legal form and the principles it embodies, and to the general public and institutional stakeholders this is not the most important message. People who trade with social enterprises are in the main more interested in the quality of the goods and services they deliver, and public authorities are more interested in the social impacts they achieve.
This has led to the growth of brands and marks which are focused on the consumer, not the producer. They put forward the benefits that social enterprises provide by virtue of the principles they adopt. This approach offers the advantage of sidestepping some of the historical ‘baggage’ which attaches to some forms of social enterprises in some parts of Europe. For instance in some ex-Communist countries co-operatives are still suspected of being state-controlled, and in other countries the subsidies which work integration social enterprises receive are criticised as leading to unfair competition.
The provision of appropriate legal forms is a fundamental and important state role, and their absence is a significant barrier to the growth of a social enterprise sector – for instance where non-profits are barred from commercial activity and co-operatives are restricted to mutual self-help, enterprises which combine these aspects have no identify or visibility. In such cases, a brand may help to create visibility, even though the creation of an adequate legal framework is still advisable.
2. Developing quality brands and marks to build identity
Marks and brands thus have to be tailored to the circumstances of a particular country – for instance environmental responsibility or fair trading practices will have a stronger place in some countries than in others. Quite often different brands for different types of social enterprise are appropriate. In Finland, for example, the broad Social Enterprise Mark, which is based on principle close to those of the EU’s Social business Initiative, coexists with the Butterfly mark for work integration enterprises. The Butterfly mark bears a relatively simple message – that the enterprise is legally registered as a work integration enterprise with 30% of its employees being disadvantaged. In contrast the recently-introduced Social Enterprise Mark is based on three major and three minor criteria. They are depicted visually in a diamond symbol which is a very clear and effective way of putting over to the public what social enterprise is about.
Thus designing an effective brand requires market research, and decisions on what the brand values are. These might include employment creation, good working conditions, social inclusion, democracy, reinvestment in the community benefit and fair trade. They might go so far as to point to the underlying fact that social enterprises represent a different economic model in which financial profit serves social profit. Initiatives like the Scottish Social Enterprise Code of Practice, which may be adopted voluntarily, clarify the principles involved.
If well designed, a brand can have a snowball effect, as has been the case with the UK’s Community Interest Company (CIC), which in its nine years of existence has attracted 10,000 registrations.
Factors that need to be taken into account include not only coherence with the identity of social enterprises, but also the benefits and cost of adoption and the onerousness of the obligations it imposes. Such a brand can be managed by a dedicated social enterprise (as is the case with the UK’s Social Enterprise Mark, or by an independent institution, as is the case in Finland.
3. Strengthening the evidence base through research
One of the great strengths of social enterprises is that, notwithstanding the debates about their identity, they perform well in practice. However good policy is based on evidence and evidence requires research. Unfortunately most national statistical databases have not yet caught up with the development of the social enterprise sector, and so official statistics are often difficult to compare internationally. New trends are particularly hard to identify. National governments and the EU sponsor various research projects, and the EMES European research network has a long record of publications in this field. The ESF could play a more active role in research, and in regions such as Flanders it is already used to gather data on the effects of the projects it supports.
4. Adopting social impact measurement techniques
One of the measures of the growing credibility of social enterprises is the rising expectations that policy-makers have of them. However the corollary of this is that there is an increasing demand for evidence of the social impact they have. Impact investors also need to be assured that their investments are being out to good use, but the tools so far developed are in their infancy compared with those used to assess financial results. A sizeable number of tools have been developed to measure social impact, among them the co-operative key performance indicators, social return on investment (SROI), and the tool for evaluating the socio-economic value of social enterprises developed by Lombardy tool as part of the BFSE network. GECES, the Commission’s Expert Group on Social Entrepreneurship, has developed a set of seven guidelines for good impact measurement practice.
There is some suspicion among social enterprises that impact measurement is a bureaucratic burden which is imposed unfairly, because it is not applied to all businesses. But if well designed, impact measurement can be a good way for a social enterprise to promote itself to funders and customers, as well as strengthening its identity by giving its members feedback about what they are achieving.
If they are to be accepted and effective, impact measurement tools must by flexible enough to cope with the wide variety of organisational types and goals which social enterprises embody. One tool which can be tailored to reflect the issues that are important within a given region is the Territorial Social Responsibility (TSR) methodology developed by REVES (Réseau Européen des Villes et Regions de l’Economie Sociale). Social enterprises and their support bodies should be closely involved in the process of defining these measurement techniques and in adapting them through practice.
5. Promoting and communicating achievements
It is important to develop a good national strategy to build awareness and visibility – connecting both with the public and with key actors, particularly those in the public sector. This can be considered part of the marketing strategy, with segmented targeting e.g. by business or age group; trade fairs/meet the buyer events, etc. One very relevant segment is young people, from those at primary school to those at university.
Identity needs to be translated into visibility through effective communication. This needs to combine the quantitative (robust evidence and relevant indicators of social impact) with the qualitative (case studies and emotionally involving stories). It needs to embrace a variety of channels which might include ambassadors, social media such as Twitter and YouTube, newsletters and local events. It is almost essential to develop comprehensive and dynamic websites accessible from mobile devices. A number of social enterprises (such as Jamie Oliver’s Fifteen restaurants) benefit from celebrity leadership or endorsement.
It is important to have a national coordinating function to ensure continuity. An online presence is in general best organised at national level (a good example is FISE’s ekonomiaspoleczna.pl site in Poland) however there can be advantages to regional sites, as the French socialement-responsable.org site has found. Given the need for continual updating, the long-term sustainability of websites is best achieved if they are hosted by a social economy federal body, rather than being specific to a short-term project. Electronic newsletters can be linked to them to keep stakeholders in touch with developments.
6. Building dialogue and collaborative relationships
Social enterprises should develop appropriate engagement strategies for different categories of stakeholders. The more powerful stakeholders such as public authorities (which are often major customers) might be involved as members or co-opted onto the board. Operational partners might have special liaison arrangements. Use can also be made of ‘nudge’ strategies, which attempt to persuade through subtle behavioural cues such as celebrity endorsement or providing evidence from supportive peers.
Hints on implementation in 2014-20
Building identity is a multi-level process, operating at local, regional, national and international levels. It is a process shaped by various actors including social movements, policy-makers, institutions representing the sector, researchers, and international foundations.
The Structural Funds also play a central role in this process, as do other arms of European policy such as Horizon 2020. It is important that social enterprise and social entrepreneurship are specifically specified as ways of meeting the Europe 2020 priorities, and they are seen as central to outcomes associated with the social economy.
Closely linked to identity, the issue of visibility is a priority in many countries, where social enterprises struggle to gain a profile among key stakeholders. Only with the recognition and support of government and policy-makers will they be able to fulfil their potential as effective models for socially oriented entrepreneurs and communities wanting to address serious social problems, and for customers and service users who want greater choice and social value.
The Structural Funds can play a crucial role, namely:
- supporting the continuing development of impact measurement techniques, so that more recognised social accounting standards and metrics can be used to reveal the added value of social enterprise, in comparison with conventional business;
- helping to establish European recognition of the added value of social enterprise through marks/brands and quality standards;
- investing in research at the European level to support the development of consistent methodologies for use at the national/regional levels to provide comparable databases of the scale and characteristics of social enterprise;
- recognising the need for, and investing appropriately to ensure equal access to, procurement and business markets for social enterprises;
- supporting the recognition by procurement commissioners of the importance of social value in procurement contracts, and supporting measures to ensure the visibility of social enterprise as contributors to that goal;
- recognising the importance of vertical and horizontal networks for establishing the identity of social enterprise across Europe, and ensuring its visibility in European and national policies, and in European/national policy-making fora.