The social enterprise space has definitely come of age in recent years, growing by leaps and bounds and gaining momentum even as you read this. But there’s no denying that it gets harder from here.
The year ahead is filled with a mixed bag of challenges and opportunities. Consumers are ready to be conscious, but most don’t know where to start. Capital is becoming more available for social enterprise pursuits, but securing the right investment at the right time is still an elusive proposition for most impact organizations. The social enterprise movement is building quite a fan base, but its popularity could unintentionally lead to an identity crisis, a crisis of confidence, or both, if we don’t move forward strategically.
With all the above in mind, where is social enterprise really headed in 2015 and beyond?
My agency, Good.Must.Grow., took a deep look at these trends in the production of Fifteen for 15, a list of key trends, impact opportunities and critical challenges that lie ahead as we enter the New Year. To forecast what’s now and what’s next in social enterprise, we gleaned insights from daily interactions with better world businesses, tireless web research and interviews with the most influential social innovators we could find. And this is what we found.
Our world is facing significant, structural, seismic challenges. And in the short term, they are going to get worse before they get better. We have done major harm to our planet and our society. Some damage is irrevocable. Some requires a very long recovery process. At the same time, the social enterprise space faces substantial growing pains and credibility checks that could make or break the movement’s long-term viability.
On the other hand, the social enterprise space has never been more robust, more positively charged, more action-packed with potential world-changing solutions. Every day, I discover another social entrepreneur or another socially responsible business model that impresses and inspires me. As for those growing pains and credibility checks, there is a lot of positive energy that suggests we can answer the bell and take the next bold steps toward an impact-centered economy.
Where does all this leave us?
To be honest, over the course of seeking answers and striving for clarity, I’ve only generated more questions, more blurred lines and ambiguity. Which is probably healthy. And necessary, given where we are.
I am wresting with how we more clearly define the space without creating a silo for social enterprise and losing sight of the real victory: a time when every business is mission-based with social impact and environmental protection at its core.
I question how the space can collaborate with big business without being overly influenced by it. How we can find money without losing mission. How we can build strong, local ecosystems without insulating ourselves from the world around us. How we can fuel adoption of social enterprise principles without falling victim to the “greenwashing” effect, where businesses latch on to “social impact” as a marketing ploy as they did with environmental initiatives in the past.
And I worry. Despite all the data that more consumers preferring to support “do good” brands, I am concerned. Our Conscious Consumer Spending Index further proves the point that the majority of U.S. consumers are favoring socially responsible companies. At the same time, I know that public opinion is like a highly potent, and dangerously unstable explosive device. If handled cautiously and applied properly, it can be powerfully effective. If not, it can explode in our faces.
Take for instance past debates about Toms Shoes and whether the company’s business model is doing good or unintentionally doing harm. While I deeply encourage us to strive for excellence, to challenge assumptions and to think critically about the real impact of available solutions, I also wonder how we have these conversations in a productive manner without alienating consumers. After all, consumers are paying attention, just not as much as we’d like. The majority of consumers won’t appreciate the nuances of a debate on the effectiveness of various socent models. When presented with harsh criticisms of existing approaches, they are more likely to jump to the conclusion that this social enterprise thing doesn’t really work after all and potentially jump off the socent bandwagon.
Also on the credibility front, more multinational corporations are buying in to social enterprise by acquiring some of the most well-known, do-good brands. But are these acquisitions cause for concern or celebration? Are these social impact brands just cashing in, or is this the first step toward major corporations adopting more socially centered business practices and scaling the impact of successful social enterprise models? Regardless of the long range strategies for the big brands, in the short term, this trend has the potential to create confusion and skepticism among consumers, who have trust issues to begin with anyway.
Another concern is visibility. Despite all the great publicity and excitement and momentum for social enterprise, better world businesses aren’t as mainstream as it may feel to those of us spending day after day in the space. I continually have to explain myself when I bring up the term social enterprise in mixed company. In fact, the number one obstacle preventing consumers from spending more with socially responsible businesses is that they don’t know they exist, where to find them, or how to determine which products and services are truly “doing good.” There is still much education to be done.
The good news is that if we can more consistently connect with consumers, they are ready to wave the flag and fuel our movement. Research shows that individuals view themselves as the most effective catalyst for positive change, outranking corporations, social enterprises, nonprofits, the government and even partnerships involving all the above. The bad news is that consumers are prone to possess short-term attention spans, which means we have a window of time where the majority of individuals are primed and receptive to the message we have to share. How long that window stays open is a question we should all be pondering.
To wrap these concerns up in a bow, as an industry we have to show progress, prove impact, scale quickly and all along the way, build confidence. None of that is easy to do. But all of it is achievable. In the end, it all boils down to three obvious priorities for the social enterprise space in 2015:
Whether its generating more early-stage risk capital to help promising new business models, increasing access to innovative approaches such as crowdfunding or further diversifying the overall funding vehicles available to social innovators, we need to continue to fuel greater flows of financing to the social enterprise space. We need our enterprises to be strong and stable and able to scale, not just socially conscious. We also have to provide social enterprises with the luxury of only saying yes to mission-aligned partnerships.
The social enterprise movement needs broader consumer awareness, more clarity and deeper engagement with key groups who are willing and wanting to support it. We should seek ways to educate consumers, politicians, business executives and community leaders. We should search for more opportunities to introduce the social enterprise model to the next generation so that tomorrow’s consumers, politicians, business executives and community leaders grow up with an appreciation of social enterprise and an expectation that the economy should be fueled by better world businesses.
The best way to take advantage of the coming opportunities, and to combat the current challenges, is to amp up collaboration within the space. It’s something that comes naturally to most social innovators, but we must be even more intentional in how we go about it. We have to more impressively show collective impact. We have to get better at advancing the story. We have to get smarter by sharing best practices and learning from one another. Our ability to lock arms, keep the big picture in mind and move the space forward is paramount to driving more funding, greater understanding and ultimately, long-term sustainability for triple bottom lines in business.
Now, it’s your turn. What do you think? A healthy dialogue is the only way to make progress, so I’d love to see a robust discussion take place in the comments below, as well as on Twitter by using #socent15. Even more importantly, I’d like to challenge you in the year ahead to ask the tough questions in your social enterprise circles and to think holistically about what needs to be done in the year ahead, and your role in it. You can start by digging into the insight shared by the experts we interviewed for this project. Their wisdom heavily influenced the content of this article, and there’s more where that came from if you want to keep reading.
For more, read the report Fifteen for 15: What’s Now and What’s Next in Social Enterprise.