Social enterprise: Do you dare call yourself one?

Sophie Hudson investigates whether calling yourself a social enterprise helps or hinders your image.

When a director of one of the world’s most prestigious centres for social entrepreneurship says she feels uncomfortable with the term ‘social enterprise’, you know the issue might be worth investigating. 

In March this year at the RBS SE100 Insight Conference in Edinburgh, Pamela Hartigan, director of the Skoll Centre for Social Entrepreneurship at Said Business School, said: “I am beginning to feel more and more uncomfortable with the term social enterprise”, adding that she felt the same about ‘social entrepreneur’, and the issue had been troubling her for some time now.

“I believe these terms were very important at one point in time,” she said. “But right now, what I’m finding across the world is they continue to foster this notion that social entrepreneurship is synonymous with palliative band aid approaches, rather than about promoting disruptive business models and approaches that address the root causes of a problem.”

So how do actual social enterprises feel about this? Do they refer to themselves as social enterprises in their marketing? Or do they shy away from the term, concerned it might be misinterpreted and encourage people to make unfair assumptions about them?

Confusing messages

Belu, a bottled water company that is perhaps one of the most well-known social enterprises in the UK, says it has avoided calling itself a social enterprise in the past. 

In fact, at the same RBS event this year, in the final few minutes of a 25-minute talk about its work, Belu’s chief executive Karen Lynch mentioned ‘social enterprise’, then quickly questioned whether that was the first time she had mentioned the term so far.
The company’s head of marketing, Sophie McCready, explains to Pioneers Post that the brand has a lot of “fantastic messages” attached to it, so it is always important for it to filter these out in the clearest way. 

“Talking about being a social enterprise to our primary audience of the hotel, restaurant and catering industry would largely be meaningless,” she says. “Instead, we use this messaging when applicable and where it gives us a great business advantage – for example in our dealings with the Houses of Parliament. Once we have captured the hearts and minds of our various customers it is easier to introduce the concept of being a social enterprise, which they respond warmly to.”

Financial assumptions

Others feel a similar way. 

Mohammad Al-Ubaydli, chief executive and founder of Patients Know Best, which puts patients in control of their medical records, gives slightly different reasons for the organisation shying away from referring to itself as a social enterprise.

He says that although it mentions ‘social enterprise’ in one line on its website, it tends to avoid doing so after that. “If you say you are a social enterprise most people tend to think you are a community interest company, and then if you are not people think you are misleading them,” he says.

He adds that another important reason for this is that when it comes to trying to win large contracts, there is often an assumption that social enterprises are not self-sustainable.  

“So in those circumstances we downplay it and instead focus on the quality of our services,” he says. “People get very anxious about the financial viability of the organisations they are procuring for services. And they still see social enterprises as fragile, so we prefer to not refer to ourselves as one.”

Legal structure limitations

However, some have found that calling themselves a social enterprise can have its benefits.

Richard Morris, founder and managing director of the Giving Machine, which generates free cash donations for schools and charities when consumers make purchases at various participating shops including Amazon and John Lewis, says that it calls itself a ‘not-for-profit social enterprise’.

He says it was only around 2010 that it started using the term ‘social enterprise’, becoming one of the first members of the Social Enterprise Mark, which he says enabled the organisation to call itself this without having a CIC legal structure.

“Before, I had been told we had to be a CIC to call ourselves a social enterprise, and I felt that wasn’t right for us,” he says. “It annoyed me to have to spend time thinking about our legal structure rather than getting on with the work we were doing, so we decided to stay as we were, until the mark came along.”

He says there is still some confusion about what the term means though.

“Our customer base is split into three,” he says. “We’ve got consumers, charities and schools, and the retailers that we work with. They all understand different things. Retailers will understand ‘not-for-profit’ more than ‘social enterprise’. Charities tend to understand. And having the endorsement of the mark is particularly good for consumers.

“But overall, generally we think it’s important to continue to use the term, as people will ask what it means, then we can explain it to them, which is an essential way to help to raise awareness of the term and increase learning.”

Business credentials

Lucy Findlay, managing director of the Social Enterprise Mark, agrees that there is still a long way to go. “There is increasing awareness, however if you ask people in the street there isn’t such understanding of what the term means,” she says. “But if you explain it to people in a simple way, then they will understand. And it’s really important to have good examples.”

She says it is vital that the term is associated with solid business credentials. “I think sometimes people say that it can be seen as maybe a bit amateurish because of the image of charity, that you might be getting a substandard product or service,” she says. “That’s why we always put the emphasis on the business and enterprise.”

Findlay adds though that the most important thing is that people know that ‘social enterprise’ means something good - that as recognition of the term grows, it is important that it is used by the right organisations, and that people understand the difference between a social enterprise and another type of business. 

“I don’t think we’ve seen the end of some of the big corporate scandals,” she says. “So consumers will be questioning some of the rhetoric that’s out there about ‘good’ businesses, and it is important that true social enterprises can be differentiated from that.”
Fran Gorman, head of media and communications at Social Enterprise UK, also says it is important that the term is carefully protected. “When ‘social business’ is used instead of ‘enterprise’, that isn’t helpful,” she says. “It’s not the term the government uses or most social enterprises use. When we’re trying to raise awareness of the social enterprise sector ‘business’ can dilute those efforts.

Signs of improvement

Research that SEUK has carried out is encouraging though, indicating that more social enterprises are now using the term to describe themselves. Gorman says that in a survey it conducted last year, 78 per cent of organisations said they used their social enterprise status in their marketing, compared to 53 per cent the previous year. “That’s a good sign and shows they think it will be advantageous,” she says.

And she points out that although some organisations focus on the quality of their product first, before mentioning they are a social enterprise, it is particularly important for organisations to use it with private sector buyers. 

“Private sector buyers say they need to be able to identify social enterprises easily, so there’s a benefit with using the term when reaching out to them,” she says. “But there is still work to do with raising awareness of the term among consumers.”

And she says that to continue to drive this, SEUK would encourage social enterprises to call themselves this. “It’s still a relatively young movement,” she says. “So we’ve got to see social enterprises stick to the term as much as possible.”

Pioneers Post Business School content is delivered in partnership with Inspire2Enterprise. Inspire2Enterprise provide a unique, free-to-access social enterprise support, information and advice service – from start-up through to initial growth and beyond. Call them on 0844 9800 760 or visit www.inspire2enterprise.org to find out more.

Cover photo by Ermin Celikovic