CIC Association

Serving Community Enterprise

does your legal form make you a social enterprise?

The current launch of the national social enterprise mark has brought to the fore once again the issue of how we identify and recognise social enterprise.

Many argue that in order to be a 'true' social enterprise, your organisation must exhibit specific characteristics and that these must be present in one of a number of limited legal forms (limited in number and choice, that is) - asset locks, accountability to more than just investors, controls on how profits and used and distributed, and so on...

Given the complexity and range of such characteristics, most generally accept that any form of co-operative, company limited by guarantee, CIC or other similar legal forms are acceptable as 'true' social enterprises.

BUT - what about the S&M Club that almost became a CIC (yes, there is one that very nearly did!)? the Thailand lap dancers co-operative? and so on...

Given the importance that as a sector we ensure that our image is consistent and easily understood, should be perhaps be moving away from simply accepting enterprises at face value on the basis of their legal form?

especially when those legal forms can be used for activities and services that we would not necessarily recognise as meeting social and environmental needs...

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Comment by Alastair Irvine on February 17, 2010 at 15:46
BTW - I never said it was done efficiently, or well ;-)
Comment by John Mulkerrin on February 17, 2010 at 12:43
If only we did have things in perspective Bob. It has had 750k plus spent on it in regional form and in two years attracted just 37 members, thats £20k for each member. Does anyone regard this as worthy of support to be rolled out nationally?
Especially when set against the fact CIC has received NO support for nearly 5 years, Why????????
Comment by Jeff Mowatt on February 17, 2010 at 12:37
That's a point I understand Adrian and perhaps you'll understand my anger in that its the very point we'd made ourselves 13 years ago in exactly the same way. Unlike the SEM we also published the argument for it.

I'd read that something like £400k had been spent on this exercise. Funds that could have seeded social enterprise rather than obstructing those that were spending their own money, and being taxed for the privilege of seeing creative property served up with someone else's name.

It's a self-serving cabal building their reputation at the expense of those giving 100% to social enterprise and in that it harms our cause in particular, as we battle to save life where disabled children are rendered disposable.

I was angry enough to blog about copyright hypocrisy today.

What's the difference between a kleptocratic Eastern European state - the root cause of such problems who prefer to brush these things under the carpet and our closed social enterprise shop, who achieve just as much evil by painting others out of the picture.

Comment by Alastair Irvine on February 17, 2010 at 11:48
The key point of the Social Enterprise Mark is to distinguish the difference between legal form and a style of doing business. People I encounter online and everywhere else constantly tell me they might set up a charity, or a social enterprise - but these are not alternative options, a social enterprise it not a legal form whereas a charity is.
As Adrian alluded to - it would be pretty easy for a Co-op or a CIC (or just about any legal form) to operate in an evil, non-social way. Someone could form the "Mining The Rainforest Co-op"; I doubt any of us would think of that as being a social enterprise.
If anything, the Mark will reduce social wash, as those businesses with questionable social credentials could/should/might get weeded out by the recognised ones.
We spend too much time having intellectual arguments about exactly who is and isn't a social enterprise and not enough time building better businesses.
Comment by Bob Northey on February 16, 2010 at 22:19
With the UK government's own statistic of 62,000 social enterprises composed of organisations holding many legal forms and constitutions, including well over 3000 Community Interest Companies the advent of the Social Enterprise Mark has barely begun. Let's keep things in perspective.
Comment by Jeff Mowatt on February 16, 2010 at 22:02
The government is very confused. At Voice10 one minister described their coop as social enteprise while Angela Smith made a distinction between SE and coops.

As I replied to Adrian on Linkedin, we have an org funded by government which doesn't do social enterprise and fails to communicate with social enterprise practitioner, proposing a model for which they can offer no reasoning.

Comment by John Mulkerrin on February 16, 2010 at 17:45
a lot of CICs and Co-ops dont pass the Marks definition of what is and isnt a social enterprise, do you think its just a social wash?
Its seems crazy to me that we have an identifier that splits all the groups that you mention are generally accepted as social enterpise. Are the govt now saying a CIC-CooP-Charity that doesnt qualify for the Mark arent social enterprises?

I think we have seriously lost our way


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