How could (should?) Government support businesses engaged in 'Profit with Purpose'?

Replies to This Discussion

Permalink Reply by Pascale Scheurer on November 22, 2011 at 22:40

ps. If I could just spice it up a little with a sense of urgency, I need to submit the paper by the end of Nov so 'quick and dirty' responses are absolutely fine, if possible by Thursday this week. Thanks again, Pascale

Permalink Reply by Janette Beetham on November 23, 2011 at 10:05

 

Hello Pascale,

I believe Profit with Purpose businesses should get some recognition.  Examplars and full 'case studies' to help lead others in that direction would be useful.  There is still so much confusion around organisations that trade to achieve a social purpose and those that use the majority of their profits for social gain - 'social enterprise', not least because the Social Enterprise Mark appears to only relate to those organisations that have an asset lock.  As those who are involved in supporting organisations with a social ethos know only too well.... 'confusion rules'.  

Even now when you mention social enterprise some of those involved in charities still think you are talking about 'business' and those in business think you are talking 'charity'.  Even more worrying is that some key people involved in infrastructure organisations and those involved in public procurement too assume they have a good understanding of this - however,  in my experience -  I am not sure they do !

I believe it is worth investigating the B Corp model as started in the US.  This gives a standard for Profit for Purpose organisations to work to and requires no asset lock.  This gives almost a membership 'brand' much like the aims of the CIC or Social Firms UK even. 

I would be very interested to hear from those who are already registered as a B Corp or those working towards it.  I believe there are already some B Corps here in the UK.  If you are involved in B Corp ......How useful is this to you now you have the accreditation - or if you are working towards this how do you feel it will help you in the future?

Janette Beetham MIC FRSA

www.JanetteBeetham.co.uk

Director, Right Resources Limited

....the business of  'accessibility'

Permalink Reply by Becky John on November 24, 2011 at 11:27

As a social enterprise focused on job creation and empowerment through work, I'd have liked to see some financial support around PAYE and NICS. A reduction in these costs or a waiver on them until trading starts, perhaps.

We're coming towards the end of our grant funded start up phase where we spent ages recruiting, training, supporting, training, reminding - before we could start trading. But all the time people have been employed - including two of us full time running the project - we have been having to pay PAYE and NICS and our only income has been grants. We've almost been an organisation of two halves - a training project, and then abusiness. Different financial obligations at each stage would be hugely helpful. If there could be some move so that those contributions start when trading starts, that would be a huge help.

 

Becky

Permalink Reply by Pascale Scheurer on November 24, 2011 at 11:44

Thanks Janette.  Very helpful.  I liked your line: "those involved in charities still think you are talking about 'business' and those in business think you are talking 'charity'" - so true.

 

Thanks for mentioning B Corps, that seems to be an interesting alternative model.

 

Pascale

Janette Beetham said:

 

Hello Pascale,

I believe Profit with Purpose businesses should get some recognition.  Examplars and full 'case studies' to help lead others in that direction would be useful.  There is still so much confusion around organisations that trade to achieve a social purpose and those that use the majority of their profits for social gain - 'social enterprise', not least because the Social Enterprise Mark appears to only relate to those organisations that have an asset lock.  As those who are involved in supporting organisations with a social ethos know only too well.... 'confusion rules'.  

Even now when you mention social enterprise some of those involved in charities still think you are talking about 'business' and those in business think you are talking 'charity'.  Even more worrying is that some key people involved in infrastructure organisations and those involved in public procurement too assume they have a good understanding of this - however,  in my experience -  I am not sure they do !

I believe it is worth investigating the B Corp model as started in the US.  This gives a standard for Profit for Purpose organisations to work to and requires no asset lock.  This gives almost a membership 'brand' much like the aims of the CIC or Social Firms UK even. 

I would be very interested to hear from those who are already registered as a B Corp or those working towards it.  I believe there are already some B Corps here in the UK.  If you are involved in B Corp ......How useful is this to you now you have the accreditation - or if you are working towards this how do you feel it will help you in the future?

Janette Beetham MIC FRSA

www.JanetteBeetham.co.uk

Director, Right Resources Limited

....the business of  'accessibility'

Permalink Reply by Pascale Scheurer on November 24, 2011 at 11:48

Thanks Becky. 

 

Yes I can see how that would help.  It seems sensible to reduce (or defer, as you suggest) the burdens on employment, particularly in the current situation.

 

Pascale

Becky John said:

As a social enterprise focused on job creation and empowerment through work, I'd have liked to see some financial support around PAYE and NICS. A reduction in these costs or a waiver on them until trading starts, perhaps.

We're coming towards the end of our grant funded start up phase where we spent ages recruiting, training, supporting, training, reminding - before we could start trading. But all the time people have been employed - including two of us full time running the project - we have been having to pay PAYE and NICS and our only income has been grants. We've almost been an organisation of two halves - a training project, and then abusiness. Different financial obligations at each stage would be hugely helpful. If there could be some move so that those contributions start when trading starts, that would be a huge help.

 

Becky

Permalink Reply by Jeff Mowatt on December 5, 2011 at 9:17

It's been our frequent experience that government don't want us in the picture. Only a few days ago, an article in the Guardian was describing UKTI plans for propagating social enterprise overseas. We've been doing that for 12 years  Our work in Ukraine being the more extreme example of government being uncollaborative  

As we would discover 2 years later, the UK and US government got together to develop their own social enterprise initiative in Ukraine after disregarding calls for support with our own project.

As a Profit for Purpose business we had invested in this work for 7 years and the final costs included the life of our founder.

Permalink Reply by Jeff Mowatt on December 5, 2011 at 9:42

Janette,

The model we introduced to the UK in 2004 has much in common with a B-Corp. It had been published in synopsis online in 1997 and then deployed to source a development initiative in Russia. This was described in an interview in 2004

In our 2006 strategy paper, describing a 'Marshall Plan' for Ukraine you'll find the model described thus:

"Enterprise is any organizational activity aimed at a specific output or outcome. Once the output or outcome – the primary objective – is clear, an organization operating to fulfill the objective is by definition an enterprise. Business is the most prominent example of enterprise. A business plan, or organizational map, provides a reference regarding how an organizational scheme will operate to produce a specific outcome: provision of products or services in a way to create profit. Profit in turn is measured numerically in terms of monetary gains, the “bottom line.”

This is the function of classic capitalism, which has proven to be the most powerful economic engine ever devised.

An inherent assumption about capitalism is that profit is defined only in terms of monetary gain. This assumption is virtually unquestioned in most of the world. However, it is not a valid assumption. Business enterprise, capitalism, must be measured in terms of monetary profit. That rule is not arguable. A business enterprise must make monetary profit, or it will merely cease to exist. That is an absolute requirement. But it does not follow that this must necessarily be the final bottom line and the sole aim of the enterprise. How this profit is used is another question. It is commonly assumed that profit will enrich enterprise owners and investors, which in turn gives them incentive to participate financially in the enterprise to start with.

That, however, is not the only possible outcome for use of profits. Profits can be directly applied to help resolve a broad range of social problems: poverty relief, improving childcare, seeding scientific research for nationwide economic advancement, improving communications infrastructure and accessibility, for examples – the target objectives of this particular project plan. The same financial discipline required of any conventional for-profit business can be applied to projects with the primary aim of improving socioeconomic conditions. Profitability provides money needed to be self-sustaining for the purpose of achieving social and economic objectives such as benefit of a nation’s poorest, neediest people. In which case, the enterprise is a social enterprise."

I approached B-Corps suggesting collaboration, when they appeared but they said they weren't able to do that with a UK company.

Jeff

Janette Beetham said:

 

Hello Pascale,

I believe Profit with Purpose businesses should get some recognition.  Examplars and full 'case studies' to help lead others in that direction would be useful.  There is still so much confusion around organisations that trade to achieve a social purpose and those that use the majority of their profits for social gain - 'social enterprise', not least because the Social Enterprise Mark appears to only relate to those organisations that have an asset lock.  As those who are involved in supporting organisations with a social ethos know only too well.... 'confusion rules'.  

Even now when you mention social enterprise some of those involved in charities still think you are talking about 'business' and those in business think you are talking 'charity'.  Even more worrying is that some key people involved in infrastructure organisations and those involved in public procurement too assume they have a good understanding of this - however,  in my experience -  I am not sure they do !

I believe it is worth investigating the B Corp model as started in the US.  This gives a standard for Profit for Purpose organisations to work to and requires no asset lock.  This gives almost a membership 'brand' much like the aims of the CIC or Social Firms UK even. 

I would be very interested to hear from those who are already registered as a B Corp or those working towards it.  I believe there are already some B Corps here in the UK.  If you are involved in B Corp ......How useful is this to you now you have the accreditation - or if you are working towards this how do you feel it will help you in the future?

Janette Beetham MIC FRSA

www.JanetteBeetham.co.uk

Director, Right Resources Limited

....the business of  'accessibility'

Permalink Reply by Pascale Scheurer on December 5, 2011 at 14:20

Hi Jeff, thanks for posting. I'm aware of your experience from, I think, comments on a Guardian blog. Or perhaps Facebook where we have at least one shared friend.

Yes I agree, we would do well to not expect much from Governments.

Best wishes, Pascale

Permalink Reply by Pascale Scheurer on December 5, 2011 at 14:29

Hello everyone. First a big THANK YOU to Janette, Becky and Jeff for posting your very helpful and interesting ideas.

Just to let you know the good news that my paper has been accepted for publication. The book will be out in March. I will let you know about that closer to the time.

My paper is titled "Profit With Purpose: A Global Business Opportunity" and primarily sets out the ways this sector has been growing, key areas of innovation, why it is well suited to the UK and how it might continue to develop in the coming decade. Finally I have made some policy suggestions that would help the UK to not get left behind in this growing sector.

I hope the paper will surprise and inspire the reader to take an interest in PwP.

I myself have discovered many new ideas and global players, and am continuing to build my online PwP platforms.

Best regards to everyone, Pascale

Permalink Reply by Jeff Mowatt on January 28, 2012 at 13:12

I remember now that we've actually asked government to support us, directly

Here for example where we're asking the US Senate Committee on Foreign Relations for their help with an alternative to capitalism in 2008

Then in 2010 a call on David Cameron to support the practical application of this approach to capitalism.

We live in hope and die in despair.

Permalink Reply by Pascale Scheurer on March 13, 2012 at 22:55

Hello everyone - as promised, here is the link to my article which was published in Reform think tank's excellent book of essays "The Next Ten Years": http://bit.ly/ProfitWithPurpose

Thank you for your input and help,

Pascale

[do get in touch if you have comments or wish to know how we're taking the ideas forward - exciting times]