SE & sustainability Part II: governmental support
When I decided to write on the topic of governmental support to Social Entrepreneurship (SE) I told Sara Moreira (Moving Cause founder) that the post would be very short… It would be unfair of me to generalize my sarcasm to countries like the UK, Canada or Australia though.
This is, by the way, one area where the US is not leading the way. Much like the governmental funding for the arts in Europe and the US, such is the case with social enterprises (SE). However, while some Americans would like to see their arts funded by the government, and some Europeans complain about the bias /dependency of their theater companies and orchestras… the voices pro government-supported SE are more concordant.
Let’s look at one example with a strong policy of governmental supported SE – the UK – and discuss how well social entrepreneurs are doing there…
The UK
Arguably, the UK offers the most dynamic governmental initiatives to support entrepreneurs in this area. In 2009, the British government set out three measures of support for social enterprises – specifically those seeking to deliver public services. The new measures included the following:
How well is the UK doing in SE as a result of this strong governmental support? Well… the UK has actual numbers to support their SE boosting strategy: so far, 60,000 British social enterprises have had a turnover of around £27bn and employ over 800,000 people.
This video shows several examples of social enterprises in the UK all enabled – or at least rewarded! – by the UK government.
Now… social entrepreneurs like other entrepreneurs, need to do their share in pressing the government for support. The UK is again a good example of this: in a 2009 manifesto, the Scottish Social Enterprise Coalition (SSEC), calls for the UK government to boost its support in 4 main areas: banking, employment, procurement and the environment. And they have very concrete propositions: among them, a request for a change in the welfare system so that those that are generally procured by SE (people with learning disabilities or the unemployed) are not deterred from working to meet the demands of that same benefits system. In other words: by increasing the number of hours that individuals from these challenged social groups can work while still being part of welfare, would not deter them from seeking employment in the SE sector
This is in itself a service to national social economy as such as change would ultimately motivate an otherwise unused workforce back into employment.
Other factors noted by the SSEC are:
The rest of Europe
In Central and Eastern Europe, the relationship between Social Enterprises and Government agencies is mostly one of complementing. While the State is responsible for providing – for example – universal primary education, some populations of society have specialized needs (language…) and social Enterprises are filling these gaps, often subsidized by the Government. Belgium and Italy are among the countries with the best supportive legal framework to SEs.
The case of Portugal
Quiz: If you are Portuguese answer these questions:
- What is the Portuguese government’s agenda for promoting social entrepreneurship?
- Are there certain kinds of social enterprises that the government will preferably support?
If you answered ‘don’t know’ (or rather: ‘não sei’:)) to both, it is not your fault. Our government has no national strategy for SE and is unlikely to work on one unless the trend is media-worthy enough for politicians to embrace it. Even if this happens, it will likely be a project with promotion/demotion cycles dictated by the fluctuation that we, the Portuguese, have become so familiar with… Every governmental project – whether good or bad… (that is beside the point)- is prematurely killed to give birth to a new project, branded by the next elected official and his/her new politics….
An SE agenda should no depend on (sorry for my bluntness) the directions the political wind blows. Rather, the Portuguese government must acknowledge not only the specificity – but also the relationship – of SE in regards to public service – and support it beyond bipartisan politics. Only that commitment can be a guarantee of the continuity of SE initiatives in Portugal.
For this to become a reality, we need strong coalitions to exert pressure on the Portuguese government with the aim of forcing a switch from random, non-evaluated, non-quantifiable projects’ outcomes …to a scenario of continuity, where social value is recognized as transcending our traditional (almost historical…) bipartisan political agenda.
The US
Obama’s government has taken several steps to leverage governmental support to SE. One of them is the creation of a Social Entrepreneurship Agency. There are multiple questions on the funding of these initiatives and their frameworks. David J. Miller, author of the Campus Entrepreneurship blog says of the Office this Agency would be created in:
…a Social Entrepreneurship Agency within the Corporation for National and Community Service? The what? No seriously, an agency for Social Entrepreneurship is great, no matter what it is called, for at least social entrepreneurship has a seat at a table. That said, its like sitting at a table full of 3rd and 4th cousins, next to the band at a wedding.
My personal stance on Obama’s announced program to foster SE – and based on my big disappointment with his continued support of the so called ‘war industry’- is to wait and see.
Worth noting here though is a model proposed by Clinton in 1996 to boost SE in the US, by which shareholders were free to decide to modify (or create) a business to serve a social purpose: at least 50% of profits would be rendered to that purpose. The social fund would offer the public an opportunity to invest and these opportunities would be met with incentives such as tax reliefs. You can read here a great summary of that this people-centered model (P-CED).
However, Americans were more concerned with who their President was sleeping with than what he was doing to advance a fairer American society (oh wait…. that was the problem). And so the P-CED never happened.
So…. SE in the US is still at the hands – and brilliant hands they are – of organizations like ASHOKA and the Skoll Foundation.
Australia
Australia is also leading the way with 75 social enterprises under the first round of the Jobs Fund initiative and the $41 million Innovation Fund. One of the areas that the Australians have been keen in – and this has been mostly an academic endeavor – is the *demonstration of value* or in other words, the quantification of the social, environmental and financial returns delivered by SE. The Australians believe that demonstrating that value is critical in attracting investors, as well as in securing government assistance.
Final thoughts:
Some contend that government support is a key aspect of success for social enterprises. If so, this may well explain the success of SE in the UK.
At a time when there is a particular trepidation among funders/investors to support SE, governmental help can definitely be key to the success in this area. That help can go from introducing informal (workshops) and formal (Higher Education) training in this area, to packages of tax incentives to encourage social investment. and changing welfare structures to foster the recruitment of the unemployed.
If as Paul C. Light defends in his article for the Stanford Social Innovation Review
“there are special sets of attitudes, skills, and practices that make social entrepreneurs and their work distinctive from more traditional public service” then it is important that potential social entrepreneurs can be identified and given training and support.
If some qualities are almost ‘innate’ (to the extent that any quality can be innate) then social entrepreneurs need to be resilient, have near term clarity, and story-telling ability.
Only these skills will attract the needed resources in a timely way…
Another area of governmental impact would be using preexisting administrative structures for the mapping of SE and community needs and the development of a metrics of social return. These are essential conditions to reassure funders/investors in their support of SE.
Further reading:
References:
http://vancouver-social-enterprise-forum.blogspot.com/2009/06/social-entrepreneurship-revisited.html
Resources in Portugal
- Non governamental
Gulbenkian – Programas de Inovação Social, notably, Bolsa de Valores Sociais
TESE – Incubação e Inovação Social
- Governamental
Inov-Social
ATENÇÃO – Formulário de candidatura para estágios profissionais – Inserção Profissional de
Jovens em Instituições da
Economia Social
