Three important differences
There has been a noticeable shift in the amount of good that companies are saying these days. There are numerous foundations, sponsorships, grants and donations going on from big corporations, that some might start to think they’re a social enterprise.
Well, quite frankly, 99% of them are not, they are just exercising their CSR departments to show you that they care, and unfortunately in some cases that they want you to think that they care.
This is completely different to being an actual social enterprise, so we’ve broken it down into three parts for you to be able to assess whether a company might actually be one, or is just doing a bit of good and shouting about it.
Stakeholders vs Shareholders
As a social enterprise, you are constantly thinking about all your stakeholders. You reach far and wide, not just at your staff, but your customers, your suppliers, your local community and the environment.
Yes, the environment.
Potentially one of the biggest stakeholders for anyone out there, and I’m not too sure as a percentage, how many companies support that stakeholder. As a social enterprise, you are looking to have a positive impact on all your stakeholders.
In traditional companies, it’s the shareholder that rules supreme. If it involves cutting quality and therefore costs in certain parts of the world to create more of a profit and thus more dividend for your shareholders, you’ll do it. If it means shipping or flying something halfway across the world for better profits at the detriment of the environment, you’ll do it.
It’s a careful balance, as any enterprise has to make a profit, but how much profit at the loss of others is the key between being a social enterprise and not being one.
Enshrined vs entwined
Social enterprises are often started as a social enterprise, they haven’t converted into one, or drifted into becoming one. More often that not, the impact they wanted to see was the reason they started. Therefore, when establishing the company, they would have used a structured which set certain things in place, an asset lock, or a CEO pay ratio, by making them part of the company’s constitution and terms.
Meanwhile CSR departments can often represent as much of the company as they wish, in fact they can even work separately to the company, as a silo, doing so much good and working closely with the marketing department so others know what good is being done.
In more progressive companies, CSR is found in each department, after all, every employee is part of their social responsibility and should benefit from and contribute to any policy or program.
However, the entwining can be untwined and then brushed to one side when say, profits aren’t as good or customers aren’t asking for it.
Being vs doing
Finally, a social enterprise is, day in and day out, it breathes, eats and cries social enterprise, impact, wanting to better the environment and society whilst also wanting to grow financially to increase reach.
Meanwhile a company does CSR when it wants to, or when it needs to, it forms part of the day, or part of the work. CSR often gives the workers a chance to give themselves a pat on the pack for some great impact made, whilst social entrepreneurs get so used to doing good, they see it as normal, and strive to do more.
Both social enterprise and CSR produce positive impact, but the key thing to look at is the rest of the impact being caused by the company who has a CSR department. Are they merely greenwashing what they do, or trying to balance out the harm?
If you have a CSR department and want to improve, get in touch and we can work on making your whole organisation deliver a better and stronger impact.