What is the future of civil society?

“There are no boundaries”: a response to Julia Unwin’s dilemmas

Julia Unwin, chair of Civil Society Futures, published “three dilemmas” for civil society. Here, Tom Levitt responds.

This isn’t a dilemma: there are no boundaries. Perhaps a generation ago it helped to categorise but today it doesn’t, the approach needs to be inclusive. Whilst I welcome the idea of the ‘for purpose’ company, B Corp is a distraction, not least because it only applies to 100 small companies in UK after a decade of existence. It doesn’t answer this question: “If a ‘for profit’ company commits its entire work force to supporting a charity partner over a period, in innovative ways, producing value to both parties, is it behaving as part of civil society?” I’d say yes, of course. Does the same apply if only half the workforce is involved? Yes… and so on, ad absurdum. Where do you draw the line?

What’s the difference between a profit and a surplus? Does it really matter? The American version of ‘non-profit’ is at least defined (organisations dependent upon external funding for their survival) whereas ours isn’t so concise. The only true ‘not for profits’ are taxpayer-funded services, charities, voluntary groups – and companies that have gone bust. Social enterprises and B Corps are ‘for-profits’ but it’s what they do with their profits that makes them different from companies which exist to drive ‘shareholder value’ only, who take money out of their companies to benefit (principally) ‘the few’. Even CICs are allowed to take some of their surplus/profit out of the system! Shareholder value is very much under scrutiny as more and more business leaders, as at Unilever, argue that environmental sustainability and community engagement are actually the best ways to deliver long term shareholder value. Does that make them part of civil society? (When we say ‘not for profit’ we mean ‘not for dividend’ but that’s not very catchy!)

A well run business will regard its workforce as a community and espouse community values of engagement, representation, activism and sharing; the employee-owned John Lewis Partnership does all of these things. Does that make JLP part of civil society?

We don’t need to spend time and effort excluding people and organisations from our definition of civil society: if it has a bill and it quacks, it’s a duck. Let’s get swimming together…

Dilemma 2. Civil society is one of the places where we express affiliation and associational life is our great, and growing, strength. Many voluntary organisations invest heavily and successfully in developing an active and engaged membership. But trustees are charged with governing for today’s beneficiaries as well as future generations. Does that create impossible conflicts within organisations with growing and more engaged and voluble memberships? Do we risk the engagement of members who quite naturally will have demands and aspirations for now? Are members our stakeholders, or are they are owners?

Those conflicts can and do arise. As Martin Luther King said:

‘Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary’.

In other words, every charity should have the goal of putting itself out of business by conquering the cause of the injustice against which they fight; that’s how you serve the beneficiaries of the future. Whilst this isn’t usually a realistic (lifetime) goal it should, nevertheless, always be reflected in the mission and programme of both individual charities and civil society in general.

You identify two risks here: one, that I call the ‘philanthropist’s risk’ is that s/he may choose to fund a campaign which isn’t a priority, or in a way which is not appropriate, perhaps operating in isolation from others and possibly even undermining those with a more rational approach. Bill Gates is a star not for the quantity of money he donates to good causes but for the fact that he delivers nothing: he uses his wealth to enhance and coordinate proven ways of working by others. The ‘democratic risk’ is that the majority have the right to be wrong. A charity with ‘youth’ in its name had a very democratic structure which, over the years, delivered an elected trustee board with an average age of over 60. The membership had to be told they were wrong – a brave action – but re-organisation was well handled and it worked.

‘Membership’ – an active, engaged, controlling mass membership – is not the flavour of the month in the charity world where today ‘followers’ (in both the ancient and the modern, Facebook sense) and supporters are the most wooed. This helps protect the mission from transient changes in public mood and other influences (given appropriate safeguards) and leaner, slimmer organisations are more agile than those which are constantly looking over their shoulders to judge public or members’ moods. But a compromise is needed: the charity sector is paying a price, literally, for regarding supporters as money-fodder rather than building relationships with them.

Few businesses could be described as democratic but they certainly know how to build brand loyalty…

Dilemma 3. We know that reputation is a hugely valued asset. We gamble with it at our peril. And yet active civil society will always want to empower people to take action. Our risk frameworks and control systems may protect our reputation. But do they also dampen enthusiasm and engagement and make it difficult for people to take initiative? Does our proper desire to be business-like and professional, stop us from allowing people to take action?

The charity sector is notorious for its risk aversion and fear of failure. Whilst the latter is justifiably seen as letting down the beneficiary, the former prevents many (especially mid-sized) charities from maximising their impacts. A balance must be struck.

A good example of this is the way that charities regard business as a resource. Traditionally this is an arm’s length relationship although the charity arm is normally outstretched, palm upwards. A recent report says that in 2012 only 20 per cent of our largest charities agreed with the statement:

‘…by effectively harnessing our corporate partners’ competences and non-cash assets [our organisation] can make much more of an impact on our mission delivery objectives than through cash-based relationships’.

In 2013 it was 34, 48 in 2015 and 60 per cent agreed by 2016. Things are changing. The Dell Foundation has identified a significant shift in corporate philanthropy: given a choice between a $100,000 gift and an equivalent value in counselling, skilled volunteering or access to decision-makers only two fifths of the 700 NGOs they work with, worldwide, would today choose the cash.

I’m interested in what ‘action’ Julia have in mind in the last sentence. Some would argue that the swing from ‘public funded’ to ‘state funded’ charity-run services has both grown charity capacity and stifled innovation as it (usually) pays for reliability of pre-existing services. As state funding dries up (half of government funding to medium sized charities has already gone) that idea will be tested in years to come! One thing that stifles action, of course, is the Lobbying Act, often creating an over-compensation in a community not used to being regulated in this way.

If ‘action’ means ‘taking part in demonstrations’, forget it (useful for cause-building, no good at getting results). If ‘action’ means empowering collective activity to directly serve beneficiaries then that focus will be more important than ever. As the public sector shrinks (for evidence, look no further than care provision in relation to growing demand) the imagination, capacity and determination of civil society will be tested as never before. New forms of collaborative, integrated, collegiate, cross sector working are needed, based more than ever on local initiatives; the state may still need to coordinate but the routes to results are not paved with gold. We’ll never again go back to the halcyon days of even ten years ago…

 

What’s New about NewCo?

Tom’s June 2017 Contribution to the CBI’s Great Business Debate

There’s little novelty in defining one’s business as a force for good. Over the years we’ve seen the emphasis on Corporate Social Responsibility wax and wane, stagnate or mature; movements like Blueprint have blossomed and we’ve seen Richard Branson’s B Team, Benefit Corporations and the B Corps emerge. The United Nations’ Sustainable Development Goals recognise the essential role that business has in ensuring that humanity and the planet continue to have a world we can share.

NewCo has no particular claim to the moral high ground but it does provide a platform for companies to share passion and purpose. The NewCo movement is neither a legal status nor a certification scheme but a coming together of for-profit companies, of all shapes and sizes, who want to do things differently. They’re enablers, collaborators, innovators, they’re transparent, open-minded and nimble, connected to communities, each other and the world through the internet. Starting in San Francisco five years ago they’re in 16 cities around the world, mostly in US but including London; driven by ideas and stories they see business as an expression of identity and reject the old corporate model of ‘command and control’. Most are small, all are ambitious and mission-driven but they include Google, whose goal is to make information accessible to all, P&G, Barclays, the BBC and hundreds of smaller enterprises.

On one day in May, 44 NewCos in London opened their doors and invited the world in. Many of the 300 visitors were London Business School MBA students and alumni, sharing hour-long seminars in up to five premises during the day. I visited three:

One celebrates good food and good cooking by serving up packs of ingredients for you to cook at home – with close to zero waste. 300 UK employees ‘serve’ customers every day across 9 countries, all coming with typical NewCo condiments of happy excitement, powerful enthusiasm and innovative flair.

Another works with major charities to develop new forms of fundraising, motivated by the fact that demand for the services that charities provide continues to grow – demand that they’ll be unable to meet unless charities can find innovative new ways to fund their work. The new era they anticipate is unwaveringly online where they seek to promote commerce, extend markets and develop business strategies. Using the tools of business, as it were, to create public good.

A third is a vibrant incubator of new talent, with a good record of turning ideas into business reality. In recent years 35 of the 40 start-ups it’s launched have failed – that’s the way of the world. One in eight ideas succeeding is a good rate and it’s been achieved by encouraging the positive attributes of innovation to go to scale.

This movement has an energy which is rare amongst businesses. NewCos are driven by purpose and operate within traditional business rules whilst integrating them with a positive way of life. It would be wonderful to think that a movement measured in hundreds could become mainstream within a decade.

CBI and Bank of England highlight Company Citizen report

The CBI have featured Tom’s Company Citizen report in their Great Business Debate discussion on ethical business. And at an event at the Bank of England to mark 15 years of work by Heart of the City (the City of London’s shared CSR organisation covering over 700 businesses), Tom was a panel member. Over 100 people heard Heart of the City’s CEO Carolyn Housman present the report, supported by speeches from the Lord Mayor of London and the Governor of the Bank of England, Mark Carney, and a panel debate.

Heart of the City is featured in The Company Citizen and Tom also contributed to the report on the organisation’s progress: Towards a Responsible Business Community.

150702 Bank of England panel 1MBThis photo of the 2 July 2015 event shows (L to R) Carolyn Housman, Lucy Marcus (Panel member), Mark Carney, Harvey McGrath (Chair of HotC), The Lord Mayor,  Matthew Patten (Panel member), Lady George (widow of the founder of HotC, former Bank of England Governor Lord Eddie George), Tom Levitt and Charmian Love (Volans / Benefit Corporations).

 

Going Dutch: SMEs meet voluntary organisations in Holland

My latest blog on the Guardian Voluntary Sector Network web site tells the story of my visit to a Beursvloer in Utrecht. A great model for SMEs and local voluntary organisations to engage together.