The UK has been quick to define social enterprise. First, the government recognizes social enterprise as “a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners”.
You may also remember the time Social Enterprise UK handed out badges to its members who wanted more recognition following an identity crisis courtesy of Salesforce attempting to trademark the phrase “social enterprise” to define its social media products. Then there’s Social Enterprise Mark, an independent certification authority that brands businesses as social enterprises according to specific criteria. The idea was modeled after the fair trade movement which brought certified products to mainstream retailers.
So why is there such an inclination for recognizing social enterprises? According to research done by YouGov of over 2,000 adults in the UK, only 33 percent correctly identified social enterprises as per the government definition. But when shown a definition of social enterprises, 52 percent of respondents said they were either “more likely” or “much more likely” to use or buy from a business calling itself a social enterprise.
Aside from potential profit, 47 percent agreed that they don’t really understand what a social enterprise is, and a bigger proportion (28 percent) agree that being called social enterprise is a marketing ploy, compared with 19 percent who disagree. Amidst confusion, Social Enterprise Mark became the first authority to validate “genuine” social enterprises and draw attention to their business values.
But Milan Pastor, founder of Fairbusiness, noticed one problem. Social Enterprise Mark enjoys monopoly power in the UK. In order to bring in more competition, Fairbusiness hopes to become the second independent certification authority for social enterprises.
“Even Fairtrade has competitors, some are more direct, some focus on a niche and I think that’s right, because that’s perhaps the most important characteristics of market economy: more competition means better quality of services, better choice, and lower prices,” said Pastor. An annual membership from Social Enterprise Mark for a business with income between £500,000 and £1,000,000, for instance, costs £550, compared with £320 from Fairbusiness.
Launched last week, Fairbusiness has two types of certification. With “UK Fairbusiness” it will comply with UK legislation to certify social enterprises within the country. With “Global Fairbusiness” it will certify businesses both inside and outside the UK that are either social enterprises or can demonstrate enormous social and environmental value. For Pastor, it’s important to recognize businesses that offer tremendous value to society but don’t fall under specific social enterprise definitions. Plus for each membership sold, one free membership will be given to a business in developing countries.
To celebrate its launch, Fairbusiness wants to give one lucky Social Enterprise Buzz reader a free one-year membership for their business.
Here’s how you can enter to win:
A few more details:
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