Social enterprise: Changing the way business is done

What if a conventional business put community before shareholder returns, using profit to serve a prinary social purpose? 

In a 1996 paper describing such a business model, the idea was pitched to US President Bill Clinton and concluded:

'It is only when wealth begins to concentrate in the hands of a relative few at the expense of billions of others who are denied even a small share of finite wealth that trouble starts and physical, human suffering begins. It does not have to be this way. Massive greed and consequent massive human misery and suffering do not have to be accepted as a givens, unavoidable, intractable, irresolvable. Just changing the way business is done, if only by a few companies, can change the flow of wealth, ease and eliminate poverty, and leave us all with something better to worry about. Basic human needs such as food and shelter are fundamental human rights; there are more than enough resources available to go around--if we can just figure out how to share. It cannot be "Me first, mine first"; rather, "Me, too" is more the order of the day.'

In some circles it wasn't welcome at all but nevertheless we took it internationally to source an experimental development inititative in Russia, prior to establishing in the UK in 2004.

"At first, the idea seemed heresy - but not for long, simply because it made sense and it didn't step on the toes of any existing enterprises that were in business to enrich relatively few people. None of them were asked to change anything, but it left open the possibility of more forward-thinking people to step in and do business differently. Even now, I am astonished that the idea struck such a deep and sympathetic chord in so many people so quickly - especially in our top business schools, where one might have thought that they were all in it for the money, for personal wealth, with little regard to social benefit or the poorest of the poor."

Surprisingly it was the UK social enterprise support community which seemed more resistant than conventional business.

"Thank you very much for your email which we have read with interest.  At present, your area of work lies beyond the focus of our work"

Fine rhetoric, but are any of these a business using its own profit for social benefit?.

For us it meant funding our own work in Ukraine on a 'Marshall Plan' wihich included a development centre for social enterprise. With the help of Kharkiv National University and local civic activists, we'd put the proposal for cross sector collaboration in front of Ukraine's givernment  

“This is a long-term permanently sustainable program, the basis for “people-centered” economic development. Core focus is always on people and their needs, with neediest people having first priority – as contrasted with the eternal chase for financial profit and numbers where people, social benefit, and human well-being are often and routinely overlooked or ignored altogether. This is in keeping with the fundamental objectives of Marshall Plan: policy aimed at hunger, poverty, desperation and chaos. This is a bottom-up approach, starting with Ukraine’s poorest and most desperate citizens, rather than a “top-down” approach that might not ever benefit them. They cannot wait, particularly children. Impedance by anyone or any group of people constitutes precisely what the original Marshall Plan was dedicated to opposing. Those who suffer most, and those in greatest need, must be helped first — not secondarily, along the way or by the way.”

Anong those called on directly to collaborate were USAID, Erste Bank and The British Council. A letter to USAID in 2008 spelt out the severity of the crisis we were dealing with  

"Practically everyone has been afraid to even talk about it, never mind try and change anything. Local judiciary have considered it to be impossible to fix the problem, because of mafia. Not that judiciary and others who know approve in any way. Like most other people, they have families to think about, and that’s that. It takes considerable time before anyone will open to say anything at all, even in hushed whispers. Children are left in conditions of neglect and medical ignorance, without benefit of even the most basic modern medical interventions that could reduce their suffering and give them a life reflecting human compassion that the vast majority of Ukrainian citizens want for all of Ukraine’s children, in my experience. Whether these kids live or die is of little, if any, concern to mafia. Many kids die from sheer human neglect. Staffers cannot possibly provide the level of nurture needed, because there’s not enough staff. There’s not enough staff because taking care of kids isn’t even the point. The main function is extraction of money from state and regional budgets. Regardless of how and why this came about, whether or not this arrangement was intentional from the start or emerged out of Ukraine’s twisted, tragic modern history, that is what is going on."

Compassion cut no ice with those our work was introduced to. They created their own project to avoid the more intractable problems  It didn't work, the crisis led to violent uprising in 2014,

According to Martin Davidson of the British Council when asked why our application for partnership was ignored, British Council partners are "expected to make a financial contribution" , That mean partners are corporation and oligarchs, expecting a return on ther investment, Our contibution both in finiancial and IP terms, had been considerabe. Moreover as a business we pay tax to fund the FCO and in turn the British Council.

Two of the partners, USAID and The Pinchuk Foundation have made significant donations to Tony Blair's Faith Foundation, while USAID tell us there was no budget for handicapped and retarded children Go figure.,

In 2008 wew became partners in the Charter for Compassion because it aligned closely with how we'd described this approach to business:

“Substitute personal greed with compassion, and the balance sheets will still work out just fine. Profit/loss statements take on a whole new dimension and meaning. Greed and capitalism are not one and the same thing. “Social” capitalism, social enterprise, is perfectly doable. This is the most effective sustainable strategy available for alleviating widespread human suffering stemming from poverty and all that comes with it — up to and including terrorism.”

Compassion for us meant speaking out when there was considerable risk, to make a ooweful case for change.

I don't know what Dr Maira Mackay interprets as compassion, but if it's anything like how the British Council sees collaboration, it probably doesn't mean much, other than posturing rhetoric.    

Even now, Lords Mandelson ans Risby who have been no strangers to oligarchs in the past, collude with another oligarch to re-interpret a 'Marshall Plan' mean to assist "those in greatest need" through social enterprise to something very far from it. Neither the British Council nor anyone else in social enterprise has the spine to stand beside us against those who profit from the misery of children who seem to matter less.  

Our output is "measured and calibrate in terms of human beings" 

“There is no substitute for a loving family environment for growing children. Existing state care institutions do not and cannot possibly provide this – despite occasional, lingering claims that state care is the best care for children. This attitude is a holdover from Soviet times when the state was idealized as the best possible caretaker for all, including children. Stark reality does not support that notion.

While this section has strong focus on financial aspects for reforming childcare in Ukraine, these are just financial numbers to demonstrate that this can be done for an overall, long-term cost reduction to state budget. That is to say, simply, this reform program is at the least financially feasible. The barrier between old and new is the cost of the transitional phase.

However, it is essential to not get lost in financial numbers and budgets. These are only important to show how this will work and will end up costing less money as the new program is fleshed out and the old program is closed. Most important is the welfare of each of these children. There are at this time, for example, numerous institutions across Ukraine where children die on a daily basis from little more than lack of knowledge about how to help them. The actual cost of helping them immediately is nothing more than one-day workshops for existing staff, to demonstrate basic, simple medical interventions common in the West. These institutions are generally closed to the outside world, difficult to access due to imposed secrecy, and are mostly in very rural areas where even the closest neighbors have no idea of the reality of these facilities.

The point, again, is very simple: to protect safety, health, and security of each and every child in Ukraine. There is absolutely no reason why this cannot be done. "