Perhaps just two sides of the same coin.
The social entrepreneurship sector continues to go from strength to strength as old capitalism loses it grip and individuals are looking at how they can make both a positive impact and a profit.
With this, we have seen a large amount of funding become available for the sector. There are local and national grants, EU funds, as well as funded schools and workshops.
Then come the programs from the corporate world. It could be a sponsorship, a partnership, or their own social entrepreneurship program, however when you look who the company is, sometimes people baulk.
This topic recently came up with some fellow entrepreneurs and here are the arguments we shared if you accept the funding.
Please note I am sharing all arguments, not necessarily mine!
It’s accepting greenwashing and similar
One argument is that by accepting the funds by these corporations, is essentially supporting their CSR efforts, which is some cases are deemed futile given what the company sells or the sector they work in.
As social enterprises, we should be leading the way by showing how impact is really done, and how it isn’t a matter of picking and choosing where you make a positive impact, especially if you are having such a detrimental one somewhere else.
For example, having an oil company run a hackathon to solve an issue, including a prize fund at the end to continue the development of the solution. People could argue that the issue itself has arisen due to the company’s operations, and therefore the money has come from a dirty source.
It will affect your reputation
Perhaps it’s not the money that’s the problem, but the fact you are then aligned with a certain corporation. Whether you got a grant or a sponsorship, the likelihood is that your logo and name, has to appear their logo or name for the whole world to see.
So then you have to think about your stakeholders and how will they react to it. Every individual has companies they dislike, perhaps due to their previous experience with them or because of their ethics, and if you start losing customers or partners because of this you’ll have to start weighing things up.
In a world where consumers are thinking more and more about where they buy from, and where news travels fast, you have to think about your brand and your reputation when making any decision such as this. Would you want to be associated with a pay-day loan company charging ridiculous interest?
Competition for funding is tight, so you don’t have a choice
There are lots of funds and programs out there, but the awards available are less than demand. Therefore when you see a pot of money that fits in with what you’re trying to do, and you’re in very early stages where it’s hard to secure money from elsewhere, then you have to take what you can get.
Also with it being the early stages, you are less likely to have built a brand yet nor have a large audience, and therefore once you are more stable you can work on this whilst ‘cleaning’ your history of working with a potentially controversial partner such as an investment bank or tobacco company.
It’s not where the money comes from, it’s where it’s going to
At the end of the day, you can’t really be sure where the money that goes into your company, comes from. If it’s from a customer, you’re not going to do a back check on who that customer works for or how they got that money. If it’s a government fund, you can argue against the way the government raised that fund at the detriment of certain social groups.
If the money is from a company’s CSR department, then you know what that company to sell in order to make that money. It could be any sector, and as you look deeper maybe their business practise isn’t so good.
But that’s where you come in, because you know that the money will be invested in an excellent service or product, as well as in your own social or environmental goals. After all that is why they came to you.
It may be supporting their weak CSR efforts, but at the same time it helps grow the social enterprise sector, which in the future hopefully will be their competition or remove them from the market completely.
Therefore money can be seen as ‘dirty’ wherever it comes from, but where it’s going to spent on is way more important.
Four arguments, two from each side. What are your thoughts when it comes to accepting donations or funding, or even offering your services or products?
Have you ever felt used for your impact by corporations, or quite the opposite, that you have seen they are actually trying to create something good as a company, not just a department or one or two individuals?
We’d love to hear your opinion.