Posted by: bevmeldrum | December 12, 2007

Social Capitalist Awards

In January Fast Company magazine and the Monitor Group hold their joint annual Social Capitalist awards.

We may not recognise the term ‘social capitalist’ and I am sure we could have a great debate about the positives and negatives of such a term but you will realise quickly that is social enterprise with another name.

The awards recognise non-profits who have used entrepreneurial methods to solve the most pressing of social problems. This year the winners range from organisations addressing poor healthcare in developing nations to unequal education access, homelessness, unemployment and substance abuse in the United States.

What stands out about these awards is the method Fast Company and Monitor use to choose the winners. Applicants are put through a rigorous measurement exercise where the impact they have on society is measured alongside of their organisational performance.

They introduce the method they use in the following way:

Defining a Social Capitalist: From its inception, the Social Capitalist Awards have defined strong performance as a combination of both social impact and organizational effectiveness. This performance is represented by five critical components: Social Impact, Aspiration & Growth, Entrepreneurship, Innovation and Sustainability. The underlying theme through all of our components is the organization’s ability to analyze tough social and organizational challenges and to craft solutions that create significant improvements over the status quo. Here is our perspective on each of these components.

Their website explains their methodology in detail. You can read it here.

For the first time since the awards began in 2004, this year’s awards saw Fast Company experiment with apply their rigorous methodology to for-profit companies. Of 31 applicants 10 passed the test and made it onto their list.

You see which ten made it by clicking here.

However, when you look through the list you might be surprised – all of the companies listed we would class here in the UK under the social enterprise or social entrepreneurship banner rather than as ‘for-profits’. That list of 10 companies includes social enterprises, ethical businesses, co-operatives, an employee-owned business and what we would class as CDFIs.

And this is where the language issue and cultural differences between here and the US really kicks in.

Social Enterprise in the US seems to have its roots in entrepreneurial non-profits. When we talk about non-profits in the US we tend to refer to those with a particular tax-exempt status (our equivalent would be a registered charity). Non-profits tend to be of a larger scale, more like our regional or national charities in the UK.

If you attend the Social Enterprise Alliance’s annual gathering (which I recommend – it is a great learning experience) you will find it dominated by large non-profits, with even larger turnovers, using social enterprise approaches to achieve their social goals. The local voluntary organisation does not translate well in the US.

In the UK of course, although the Government, in their original strategy, recognised that most social enterprises would come out of the voluntary sector, the agenda is being driven in a different direction. Social enterprise is being touted as a brand new approach that hasn’t been done before.

A great marketing concept yes, but rather than being obviously driven by an entrepreneurial voluntary sector, it looks instead like the voluntary sector is forever trying to catch up with the fast moving social enterprise wagon.

So when we look at what is going on in the US, like Fast Company’s Social Capitalist awards, we need to remember than in the UK we have placed social enterprise firmly within the Third Sector and the social economy. In the US the distinction remains being non-profits who do social enterprise and for-profits that are, as Fast Company describes them, ‘for-benefit’.

What is really exciting about the Fast Company awards is that whether you are a non-profit social enterprise or a for-profit ‘for-benefit’ we are beginning to be required to prove our social impact on a level not seen before. No more awards for just being nice – we have to earn our recognition.

More about the Fast Company and Monitor Group Social Capitalist Awards.


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