How Bank of Scotland & The Sunday Times got it so wrong.

Today is the deadline for the Bank of Scotland £6 million, Social Entrepreneur Awards in association with the Sunday Times.

Some months ago, amongst a flurry of PR, and a hum of excitement from the Social Enterprise Community, BOS & The Sunday Times announced with open arms that "Whether your organisation is a charity, voluntary organisation, church or any other not-for-profit organisation, large or small you are eligible for these awards"

Hang on ...
any other not-for-profit organisation?

I have long been of the unwavering opinion that so·cial en·ter·prise (n.) is responsibly-profitable enterprise* and that as long as that organistaion is dedicated to creating social value, its structure is unimportant. A quick check with the Social Enterprise Coalition and Social Enterprise Magazine indicates the consensus falls firmly on my side.

I, however, don't have £6 million to donate to the cause and, sadly, those who do at Bank of Scotland are only recognising the social benefit of what is described in their Ts and Cs as:

"not-for-profit organisations, meaning organisations which are not capable of distributing profits generated by the organisation or capital back to shareholders, members or other participants in the organisation;"

A short sighted approach if ever there was one. Non-profits, as the definition above testifies, cannot release capital. This, you might speculate, would put off investors and you'd see a 5x ROI on that guess. Not being able to raise finance through investment leaves non-profits on the scrounge. So in this sense I see the appeal of offering millions of pounds in prize money to an organisation that can't raise it's cash any other way. BUT, and here is the point that so often gets missed, how sustainable is this? What happens when th organisation needs more cash down the line? Just how scalable are non-profits and are they really going to contribute to the growth of the economy in the same way that a Social Enterprise producing equal social value, only constituted in a way that makes them eligible for investment capital, would?

Whether structured as non-profits or for-profits, social enterprises should be measured by their ability to tackle pressing problems with innovative solutions and their capacity to grow and scale whilst exponentially improving the status quo.

Are bank of Scotland supporting scalable Social Enterprise?
No.

Are they likely to discover and finance the next "Divine Chocolate" or "Big Issue"
No.

Both Divine Chocolate (Enterprising Solutions "Social Enterprise of the Year" 2007 ) and The Big Issue (John Bird, Ernst & Young "Social Entrepreneur of the Year" 2008) are incorporated as Limited Companies and are therefore capable of "distributing profits back to shareholders". Consequentially this would render them both ineligible for qualification as a "Social Enterprise" under The Bank of Scotland / Sunday Times definition.

It is extremely disappointing to see that the UK is still so backwards in its thinking regarding Social Enterprise. If we are ever to take a lead in this vital sector it needs to be universally recognised that Social Enterprise is not a synonym for non-profit, and there is no difference between social value created by donor funds and social value created with internally generated surplus.

A Thought For The New Year

2009 has landed, bringing with it not just the obligatory hangover but yet another wave of companies falling into administration, fresh concerns for so many formerly stable business sectors and a sizeable chunk of the country's workforce fearing for their jobs. In fact Flybe has picked up on the extent of our insecurity announcing, this morning, that they will be offering insurance to customers allowing them to claim a full refund on their travel costs if they lose their jobs.

With the economy so out of kilter there has probably been no better time to develop your skills. Take that night course you've been talking about for so many months, buy that Language DVD, start working on that brilliant business idea you had in the pub over the holidays, put yourself forward for that first aid course or an advanced industry qualification.
Make yourself indispensable in 2009

I am always doing that which I can not do, in order that I may learn how to do it.
- Pablo Picasso

I hope each of you have a happy, peaceful and successful 2009.

Doug Richard's "School for Start Ups"

If mass media hasn't taken the opportunity to remind you yet today, let me.
We are in the grips of economic disaster.
Shops are closing, jobs vanishing, bankruptcy is stalking us all and they tell us no sector is safe. With newspaper headlines reading more like the tag lines from an (admittedly very boring) US disaster movie by the day, anyone who knows anything about the economic climate is being dragged onto talk shows, begged to fill newspaper columns and guesting on local radio question time.

Understanding economics has never been so sexy.

And yet, lets face it, it still ... isn't.

This makes it all the more significant that James and I both dragged our flu-ravaged selves, pockets stuffed with Lemsip sachets, out into the freezing rain and it into town for 8:30am and knowingly and willingly spent the whole day learning about 'Entrepreneurial Economics'.

Run by former BBC2 Dragon, Doug Richard, we think getting yourself a place at a School for Start Ups event is a is a must-do for all young companies and aspiring entrepreneurs. Doug has stood in the shoes of both investor and investee, and by his own admission has had great successes and failures in both. He is also a professional speaker (incidentally he had also been the guest speaker at the previous night's John Logie Baird Awards*) and it shows in the ease with which he expresses complex ideas, throws in snippets of his vast personal experience and completely charms the audience

It was useful, engaging and we thoroughly enjoyed it.

So go here and sign up to attend, it may well be available free of change (depending on your situation). If there isn't one local to you - travel to it. Especially if you're not paying to attend. Make the effort to go, you (and the crumbling economy) will be glad you did.


* and quite frankly saved the show, but that's another story!