7 Sins of Social Enterprise

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    As the term social enterprise gains traction in the marketplace, more and more organizations are using that term. There is a real risk that this expansion will dilute the meaning of social enterprise to the point that it means any organization that can claim social as well as financial goals, no matter how vague or meaningless. This has already happened in the environmental realm, where trash haulers call themselves recyclers and oil companies outdo each other claiming to be “greener” than the next.

    On that point is a recent blog written by Dionne Chingkoe, where she lists the following “Six Sins of Social Enterprise.”

    1. The Sin of the Hidden Tradeoff – Much like a glittering generality, this sin involves presenting a person, product, firm, or service as social by highlighting a single social attribute. For example, an investment that touts a single social factor such as job creation cannot be classified in the same range as a deal with a wholly integrated social mission.
    2. The Sin of No Proof – As the name suggests, this sin refers to making claims that have no evidence to back them up. Over time, standardized metrics and a common language will be created, making it more evident when social enterprises are not making a measurable impact.
    3. The Sin of Vagueness – This sin involves feel-good language that’s so vague as to be meaningless. For instance, there is a growing trend in the private sector to publish CSR reports that do not contain specified goals or practices.
    4. The Sin of Irrelevance – Making a claim that’s truthful but unimportant or unhelpful.
    5. The Sin of Lesser of Two Evils – In the social enterprise context, this relates to a greater yet relevant debate on who can list on a social investment exchange. Can tobacco companies that train and employ marginalized people be considered social enterprises?
    6. The Sin of Fibbing – This really doesn’t require much of an explanation.

    A comment from Jed Emerson mentions a 7th sin, hubris, which involves not only the hype sometimes heard around social enterprise — that it will solve the world’s problems and enable nonprofits/NGOs to stop chasing grant dollars — but also believing that hype. A certain amount of humility is a good thing, that we can actually create all the change we want to see in the world.


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