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Large Corporates and Social Enterprise: One step forward and two steps backwards

Rod Schwartz
Rod Schwartz, posted on 27.09.12

This piece is a re-print of a piece published in Third Sector Magazine on 25 September, 2012

Recently my ClearlySo colleague Jonny Kates tweeted about a blog I had posted last August about corporate capital and its potential to play a vital role in the funding of social enterprises. I was genuinely excited about this possible influx and how it could amplify the efforts of Government, Big Society Capital, social business angels and financial institutions. Not only do corporations have abundant financial resources but there is much more they had to offer the nascent social economy.

Considerable progress has been made as multinationals have offered sponsorship, mentoring and free or low-cost resources. ClearlySo has itself been a beneficiary of such corporate generosity and I would mention the names of these firms specifically would it not seem exceedingly cheesy and self-serving. Nevertheless I cannot help but feel that, on balance, the progress has been disappointing, particularly amongst those leading corporations which seemed most ready, willing and able to engage.

The best-known setback, which was nearly a disaster, involved the US software services group Salesforce, which sought to trademark the term "social enterprise". Eventually, to its credit, Salesforce relented, but not before causing considerable confusion and ill-will. This whole episode, which ClearlySo covered extensively on its blog, was especially surprising because Salesforce had previously seemed so willing to positively connect with the sector.

The main disappointment, however, stems from the simple lack of investment capital or substantial commercial flows into the sector from large corporations. I struggle to think of any notable developments along these lines and feel a great opportunity is being missed. From this criticism, I exclude financial institutions, where solid progress is being made. (I invite readers to challenge me with examples of significant flows of corporate capital--in fact I would love to be proven wrong).

Large corporations repeatedly state intentions to engage with the social enterprise sector, but despite the good intentions, they generally lead nowhere and unfortunately absorb much of the meagre resources of social enterprises which could be utilised more productively elsewhere. I suspect that, on balance, large corporations have been a net user of, rather than a contributor to, the resource base of the social enterprise sector.

It is not all the fault of these multinationals. As we warned last August, corporations move slowly and deliberately. But our sector has failed to be sufficiently creative and resourceful in capitalising on the good intentions of the many employees of the world's largest companies. Somehow we have been unable to identify a sufficiently critical client need or, as I have pointed out in a recent ClearlySo blog post, charge appropriately for the services we do render.

Perhaps this will just take time--more time than most of us anticipated. But it is time for corporates to step up to the plate!


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