There is rarely a day that goes by when I don’t have a discussion with someone about legal structures or governance relating to social purpose organisations. It might not sound like the sexiest of topics but it is bloomin’ interesting if you really get into it. And, on the basis that it relates to the majority, more people really should do just that – get into it. We should understand it, embrace it and recognise that those rules that bind our organisations together are really our best friend. Sure, they might not be the kind of friend to take you out on the razz every night; they’re more the kind of friend that is always there for you, quietly loyal and, reassuringly, ever present.
But, the real issue that’s been playing on my mind for a while is about whether the issue of choice of legal structure has become too prominent. If you want to apply for many forms of funding, you can’t be a profit-distributing organisation (not even a Community Interest Company with shares). So, if you want that funding, you HAVE to have a certain type of structure. It kinda forces your hand… sometimes making you be something you don’t want to be.
But, just like the Fair Trade logo and the Social Enterprise mark (oh dear, I’m mentioning that one again!) are badges of ethics or approaches, rather than badges of quality (remember all those folk who used to complain about the taste of Fair Trade coffee…), the same applies to legal structures. Structure maketh not the quality or the social impact. All it does is house the activity; great or terrible.
So, why shouldn’t a funder award funds to organisations of ANY structure providing that they have a clear credibility for why they want that funding, a track record of quality AND so long as they are locked in to agreeing that activities from charitable funding can NEVER contribute to the profits that result in being eligible for dividend payments…?
Of course, there would be lots of detail to work out with this but, people, please, lets go big picture and think about the principle behind this. Truth is that I’ve seen sole traders and private sector businesses that are more socially enterprising than some social enterprises and operating with greater quality and innovation in what they do. Surely, if they can and are committed to creating the impact that funders are seeking they deserve the chance to do this.
It’s the same with the much talked about issue of social investment. All this money for organisations but, again, only if you have a certain kind of structure. And, I’m still to be convinced that the social sector REALLY wants to take on debt (take the much under utilised Triodos initiative that closed after making just one investment in two years) and much less convinced that many social organisations SHOULD take on debt, especially if the danger is that all it does is load this debt into already struggling communities – the likes of which many social purpose organisations operate in.
So, time for another thought… How about if all those micro and SME businesses that have been literally crying out for lending could access the pots and pots of social investment? They want the money, they’re trying to grow their enterprises and if it was demanded that they evidence added social value via that lending, I have a sneaky feeling many would be up for it.
And, if many more businesses and organisations create greater social value and benefit then surely all our communities at large are the winners. Now, that would be Big Society…