St Andrew’s Healthcare, one of the largest charities in the UK, has been told by commissioners that calling itself a social enterprise will help it win contracts.
And some charities simply call themselves a ‘social enterprise’ as it is a condition for winning funding.
The strength of the social enterprise brand within commissioning was highlighted at yesterday’s Charity Law Conference during a panel debate on social enterprise.
The debate, which asked whether social enterprise enhanced, confused or devalued the charity brand, included speeches from Caroline Mason, chief operating officer at Big Society Capital; Stephen Lloyd, partner and senior counsel at Bates Wells and Braithwaite (BWB); Luke Fletcher, a partner at BWB and Debra Allcock Tyler, chief executive of the Directory of Social Change.
A delegate at the conference, who worked for St Andrew’s Healthcare, said that social enterprise was devaluing the charity brand: “It causes confusion in the marketplace,” she said. “We’ve been told by commissioners that if we call ourselves a social enterprise we will win contracts. But we are a professional organisation and provide a good quality service. We shouldn’t need the social enterprise rebrand.
“Social enterprise also opens the door for rogues who want to pretend to be doing good and take advantage," she added.
A delegate at the conference also said she knew of a charity that called itself a social enterprise simply as it was a condition for applying for grant funding.
Debra Allcock Tyler, said her organisation, the Directory of Social Change, would not call itself a social enterprise, although it had a high proportion of earned income.
She also warned about the sub-text around social enterprise: that it was "innovative, fresh, new, efficient and successful", while charity was "fuddy-duddy, bad, dependent and money-grabbing".
"I have no issue with businesses that do good. My issue is when social enterprise uses the charity brand to make themselves look better.
"There are some awesome social enteprises, like there are awesome charities. But there must also be some awful social enterprises too," she said
Social enterprise enhances charities
On the concerns that the social enterprise brand was open to exploitation from rogue organisations, Mason of Big Society Capital argued that there was evidence of distortion of structures in the charity sector: “I don’t think Eton is a very good example of a charity,” she said.
She went on to say that social enterprise enhanced the charity sector: “I believe there is huge value in the combined for the social sector,” she said. “Social enterprise is another weapon in a charity’s armoury to become sustainable.”
Stephen Lloyd of BWB added that there were enough social problems for both the charity sector and social enterprise sector to tackle: “It’s not a zero-sum game,” he said. “Social enterprise enhances the charity brand.”
Lloyd also warned that some in the charity sector were worried about the tax reliefs for social investment announced in this year’s Budget: “There is a view that charities don’t want social enterprise to hollow out charity gifts. But it’s not a competition. I hope the charity sector does not oppose the tax reliefs for social enterprise.”
During the debate, the issue of confusion around what a social enterprise is was also brought up, with one delegate saying some were getting social enterprise confused with corporate social responsibility.
Luke Fletcher, a partner at BWB, said it was hard to think that in five years time there would be no legal definition for social enterprise: “There have been lots of attempts for a definition, but there is currently no single one agreed. There have been a few warning shots with A4e’s recent attempt to call itself a social business and Salesforce’s trademark application. A legal definition will come eventually. There is interest in Parliament around it.”
Lloyd added that a definition could come from Europe as part of its Social Business Initiative.