On 7 September 2015 Tom Levitt addressed the ISIRC [International Social Innovation and Research Conference] conference in York on the convergence of his own research on the role of SMEs (small and medium sized enterprises) in communities and the diversification of the foodbank movement. The conference brought together 140 academics (mostly) and practitioners for three days.
Here is the paper: 150906 SMEs foodbanks TL and here is the speech which accompanied it:
I want to talk about two strands of interest of mine, both connected with the growing community capacity and the optimum use of resources in the cause of the public good. They are:
- The potential of business and small businesses in particular for generating public good
- and the relief of poverty through the foodbank movement
…and where these two spheres meet, I will ask whether the foodbank model can work better with community-engaged business in order to produce a public benefit greater than the sum of its parts.
The world’s biggest problems are climate change, hunger, poverty and resource depletion.
Of the world’s 100 biggest economies only 40 are countries and the other 60 are corporates.
Who’s best placed to tackle those ills? I’ll leave that one with you…
In this country public spending on front line community services, especially by local authorities, is falling and the prospect of it ever rising significantly is slim. Many people think that charities are – and always have been – well placed to deliver public benefit and that they can rise to the challenge: isn’t this what Big Society was supposed to be?
Yet if you ask a small charity what they really need most will say ‘money’.
What most of them need is capacity, skills, resources, volunteer time… and they can get these from the businesses with which they co-exist in our communities. This is what happens in America where much more community volunteering takes place through the medium of the workplace than does here.
There are 162,000 charities in Britain, that’s 250 per Parliamentary constituency, and most – 80 per cent – have a turnover of under £100,000. You can see why I say they lack capacity.
By contrast there are 5 million businesses in Britain – even if you take out self employed people there are still 3 million, or 5,000 employers in every Parliamentary constituency.
Amongst those businesses, 99 per cent employ fewer than 250 people, the vast majority fewer than 20 – but between them they employ 60% of the private sector workforce and create 50% of its wealth. They exist in almost every community and can often be found side by side with the charities – plus a small but increasing number of social enterprises, businesses with a primarily social purpose – within those very communities where we find the hunger, the skill shortages, the ambition deficits, the chronic diseases and the loneliness that blight Britain today.
Foodbanks are a case in point. Just look at how their number has grown in the last seven years, as we saw this morning.
There are about a thousand now, about half of them franchises of the Trussell Trust, compared to 29 Trussell Trust operations just seven years ago.
And Trussell now serves a million clients a year.
Is this expansion due to the unearthing of an unmet need, as Whitehall would have us believe? Or was the need small and has been growing, due to changes not just in the economy but in the benefit system, as the Scottish government and others claim?
I know which analysis I prefer.
Foodbanks would not exist without the private sector: where d’you think the food comes from?
Supermarkets are falling over themselves to actively support foodbanks and it’s not just because of the friendly and responsible image that such engagement creates. It actually costs supermarkets money to dispose of unwanted food, money that can be saved by giving food away – and who wants to be seen to be feeding the seagulls in an age of austerity?
Yes, the supermarkets give food to foodbanks as it approaches its sell-by date but they encourage you to give as well – by buying it from them first, of course. And that extra can of beans you buy feeds directly into their profits.
A lot of the food that comes to foodbanks comes from another charity: Fareshare. For many years, Fareshare has supplied food to homeless shelters, women’s refuges and day centres – and now foodbanks – which it obtains straight from the manufacturer, food which is surplus to requirements due to over-production, or that’s wrongly labelled (an expensive error to correct) – or otherwise saved from the tip.
Foodbanks only deal with non-perishable food and that’s quite understandable – but what happens to fresh, perishable food – say, sandwiches at the end of the day?
If they’re from Pret a Manger there’s a good chance they’ll also end up in a homeless shelter – three million of their items do that each year and in London they send a van round their many outlets every night to collect them for that purpose.
There are a number of reasons why engaging with the community is good for business – and a growing number of businesses are realising this.
In particular, engaging with the community means engaging with your workforce; employee supported volunteering, coordinated within the HR department – not public affairs or CSR – to ensure that employee development is at the heart of community engagement.
Larger employers find that the practical, work related skills of their employees can be developed by getting the right experience: applying old skills in a new context, developing new skills and trying out leadership roles by working with a charity, especially if their mission is in some way related to the company’s mission.
Soft, customer-facing skills can be developed too – patience from listening to children read, compassion from working with older people, responsibility from an environmental project – and the rest.
You show me an SME with an HR department, let alone an established CSR function!
They don’t exist. They’re luxuries which small employers don’t have.
In 2012, with funding from the Joseph Rowntree Foundation, I looked at how SMEs engage with communities in Bradford and here in York.
There was more going on than I expected but it was low level, low skilled engagement.
- Reactive not proactive – most common expressions were employee-initiated fundraising and the donation of raffle prizes
- There was very little strategic planning of community engagement
- A strong feeling of ‘CSR is not for us; we’re not corporates’
- It was certainly not driven by a business case
- there was no sector leadership on this issue or access to success stories or best practice.
But there were other interesting findings, too:
- More than half of all SMEs thought it was right that they should engage with the community
- Only a fifth said it was ‘nothing to do with us’
- Half of those who thought it was a good idea said they could be doing more than they were.
These figures mirror exactly what Business in the Community found in a survey they carried out ten years earlier.
That’s why I say to charities, foodbanks and the rest that failure to engage with the local business community, by which I mean almost exclusively SMEs, is a huge missed opportunity. Not only might employee volunteering hours be available but skills, business planning, accountancy, construction – not to mention unwanted goods, the loan of equipment… business has all of these things in surplus. And money too.
If it didn’t have surpluses then business couldn’t respond to changes in the market place, couldn’t innovate, couldn’t cover absences and so on.
Admittedly these surpluses are smaller in SMEs than in big corporates, and that’s why big corporates can afford to have an HR department in the first place whereas SMEs generally can’t.
But something has started to happen out there that will address this…
Ten years ago, six large corporates in Swindon decided to pool their employee volunteering functions, to share the opportunities for constructive work in communities that existed through local charities.
Then they agreed to fund a post in the local Volunteer Bureau to coordinate this work, get the opportunities onto a web site; then the number of corporates involved grew and then they agreed to open this pool of volunteering opportunities, for both skilled volunteering and time (or low-skilled) volunteering to their SME neighbours.
That meant that the SMEs no longer had the cost of organising employee volunteering to worry about; all of the benefits and none of the cost, other than the time or effort of the commitment itself. Today Involve Swindon covers the whole of Wiltshire; and it has franchise operations in Bath and Gloucester.
Back in the 1980s a corporate-led movement called ‘Cares’ was launched by BITC with a similar purpose; it faded away over the years but in a couple of places the name still exists – York Cares, which has about 30 corporate and SME members here in this city, focuses on helping young people develop skills.
In Tameside and in Cheshire the local Councils for Voluntary Service used government funding to build up networks of businesses, mostly SMEs, to encourage their active citizenship and employee engagement; Tameside now franchises its model to three other cities, whilst in Shropshire a few SMEs have come together in a small group to do something similar.
Earlier this year I published ‘The Company Citizen’ which looked at 14 such networks around the country, no two of which have the same structure or history, and advocated their replication.
One thing that struck me subsequently is that none of the 14 networks appear to relate to their local foodbanks. Fareshare, which I mentioned earlier, does have some strategic corporate volunteering partnerships but the foodbanks themselves don’t – with the possible exception of an independent foodbank in Milton Keynes which actively recruits volunteers and donations from local businesses in exchange for a mention on the side of their van.
By and large local smaller businesses don’t engage with foodbanks but then they don’t engage formally with communities either.
I’m sure you’ve come across furniture workshops, where a charity or social enterprise creates jobs, volunteering opportunities or apprenticeships for unemployed people to make new furniture from old, re-upholster settees, learn skills in carpentry, marketing and retail; as well as save furniture from landfill and create low cost products for less well-off families to enjoy. SMEs could engage better with these too, perhaps providing tutors to teach specialist skills for a few hours or to advise on a marketing strategy. Certainly Wates, the big builders, appreciates the value of lending such institutions a manager for a few weeks at a time to grow capacity in the organisation and develop the manager’s skills.
In California, Italy, Spain and Portugal there are pharmacy banks. Here, over the counter medicines with less than six months to their expiry date are collected from chemists’ shops, repackaged and sold cheaply or given away – under the auspices of volunteer pharmacists – to poorer people who can’t afford them. In Lisbon ten per cent of the population say they decline or defer purchasing pharmaceutical products because they can’t afford them, that’s double the proportion of people that use foodbanks in that city.
If they were not disposed of in this way they’d have been dumped or burned: in the United States companies dispose of $700 million-worth of pharmaceutical products each year – a drop in the ocean compared to the $4 billion of drugs that are sold or dispensed on prescription and then either not collected or dumped when they’re not fully used.
Let’s bring these functions together; let’s have foodbanks, pharmacy banks, furniture banks, advice banks, cheap loan banks all equally accessible, not just to beneficiaries but also to engagement by business and by small businesses in particular.
In Darlington a business network involves the local Mental Health Trust. They assist businesses anticipate, deter and cope with mental health problems in the workplace and help them re-assimilate employees back into the workforce after a period of absence due to mental health issues.
The business case for employers to support and engage in this initiative was clear: reducing absence and raising productivity whilst encouraging employees to feel that they are part of a process of doing good.
I can’t emphasise this enough: employees who feel that there’s a greater purpose to work than just making money or widgets are more engaged, more productive, more loyal, more long-lasting than those who do not.
Let me return finally to foodbanks. We know that government services are provided through silos; cross-departmental working is as rare as genuine cross-sector working and even within departments of government and council there are silos within silos, procedures to be followed and protocols called ‘we’ve always done it this way’ – many charities are little better in this regard.
I want to see relational rather than transactional service delivery.
It’s a transaction when a Jobcentre employee takes the specified 8 minutes to take a young jobseeker through how to fill in a form; or when a charity volunteer hands over three days supply of food to a person who is officially needy.
It’s a relationship when the employment mentor explores the jobseeker’s realistic alternatives and helps them gain confidence in interview situations; or when the foodbank client is given a cup of tea, a benefits check, a smile and some advice on how to cook on a budget, as well as their bag of food.
Relationships are human, involving commitment, care, compassion. Transactions are robotic, commitment-lite and relatively brief.
Transactions are what too many people come to work to do; and too many in charities see things that way too.
But foodbanks are changing: the Trussell Trust is already rolling out ‘Eat Well, Spend Less’, a programme to help people with cooking and nutrition on a low budget and ‘More than Food’, a professional debt advice service designed by the Money Saving Expert, Martin Lewis. These will be more taxing on their managers, I’m sure, but they’ll help develop relationships and move away from transactions – and they’ll increase the quality of the service for those both receiving and delivering it.
Foodbanks should therefore be part of a holistic network in which employers, employees, volunteers and beneficiaries seek together to stimulate and utilise the compassion that can be found in all of us to do good: and it is not just the beneficiaries who benefit.
There is a strong business case for creating a cadre of employees who are engaged, caring and committed: they’ll deliver a better service more efficiently and with less disruption than otherwise, all else being equal. Community engagement through company citizenship is the way to do this and foodbanks should be part of the network of support that exists throughout every community but which today is sadly lacking where it’s most needed.
Ultimately, there is a business case for fighting poverty at source and not simply treating the symptoms, as some in the foodbank movement have acknowledged. And that business case is this:
Poor people make poor customers.
But that’s another story.