12/22 Peter Bernard - Members Health Network
17 years ago
Tuesday, June 15, 2010
Social Enterprise, Social Capital, and Co-operative Businesses
Very intriguing ideas…
Particularly if the "social capital" or "social business" concepts are not exclusively tied to a co-operative business structure. To take a local example, a private business such as Flatlander Chocolate is very much a social enterprise, from Dan Schreiber's commitment to buying fair trade and organic cacao beans, to his ideas for setting up a community garden at his chocolate factory etc. And there are other models too, such as not-for-profits, "community-supported" enterprises, and even "private clubs" that have explicit social missions and are dedicated to contributing to a healthy, local food system (the nub of our social capital).
Financial capital is critical to growing operations like this that are committed to defining and growing our social capital. So if the objective could be defined more broadly than providing capital "to expand the co-operative economy," I think it could be a much stronger and more flexible force for change. I certainly think that we could use many more co-operative businesses than we have, but I also think that we should be open to supporting alternative business models or structures that can also be made to work to grow our social capital in central Illinois.
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Good point Laurence. A co-op structure with a board makes accountability easier, but there is no reason for that to be a requirement.
ReplyDeleteJust like we wouldn’t expect a bank to lend money to a business based on the owner promising to make more money than she spends a social investment fund would require some formal documentation of the social benefits of the business.
This would take the form of a social business plan that defines the benefits the business will provide the community. Investors will want an annual report of how the business is doing with respect to this mission.
Obviously this sounds a lot like a co-op’s general manager ends report!
The benefit of the co-op structure is that the board reviews these reports and can give the investors/owners additional confidence in the organizations ability to meet a stated social mission.
There is also a benefit to the ownership structure of the co-op. Jacqueline draws a salary rather than extracting profits from the business. In the co-op, nobody has an incentive to turn a profit (beyond keeping solvent and investing in ends work for the future). A sole proprietor, on the other hand, has to trade off their personal profit from the operation versus social outcomes. This is a much more traditional double bottom line.