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Preserving the Meaning of Social Enterprise

Nonprofit and for-profit enterprises that prioritize social impact and financial sustainability need to band together and make the collective voice of social enterprise exponentially more powerful.

Last year, Salesforce.com, named Forbes’ Most Innovative Company of 2011, began using the term “social enterprise” to describe “how social and mobile cloud technologies are empowering companies to connect with customers, partners, and employees in entirely new ways.” This usage stood in contrast to the relatively well-developed notion of social enterprise as a new form of hybrid organization that pursues a social mission using business methods. This year, Salesforce increasingly began incorporating “social enterprise” in its marketing efforts—current banner ads for Salesforce’s annual conference, Dreamforce, invite participants to “Become a Social Enterprise.” On July 24, Salesforce filed trademark applications to own and control use of “social enterprise” in the IT sector in the US, UK, and Jamaica. 

As leaders in the social enterprise sector became aware of Salesforce’s marketing and trademark activity this summer, a global uprising emerged among social enterprise practitioners and advocates, insisting that Salesforce stop confusing the meaning of social enterprise that thousands of nonprofit, for-profit, academic, and government institutions have worked to establish over the past 15-plus years. On August 31, a group of social enterprise leaders that included Grameen Bank Founder and Nobel Laureate Muhammad Yunus, sent a letter to Salesforce CEO Marc Benioff, explaining the potential damage to the efforts of this growing movement, and requesting that Salesforce abandon its trademark applications and desist from using the term in any way. Professor Yunus wrote, “As a lifelong advocate of the power of enterprise to create good for the poor of the world, I respectfully ask that Salesforce stops its attempts to trademark the phrase “social enterprise.” It brings unnecessary confusion to the marketplace.” Last week, Salesforce and Benioff announced that they would comply with this request. September 4, 2012 was a great day for social enterprise.

What’s important about this development has very little to do with Salesforce. Salesforce is a terrific company, and its “1/1/1” integrated philanthropy model—where 1 percent of equity, 1 percent of employee time, and 1 percent of product are donated to nonprofits—has been a model in corporate philanthropy since the company’s inception. Indeed, many nonprofit social enterprises have been the beneficiaries of Salesforce’s philanthropy and rely on its products. Salesforce and Benioff did the right thing, and the very next day they were rewarded with the news that Salesforce had been named Forbes’ Most Innovative Company yet again. We salute Salesforce and Benioff for their responsiveness on this issue, and we invite the most innovative business in the world to deepen its partnership with the world’s most innovative organizations that are using the power of business and markets to address social needs that have gone unmet by business, government, and nonprofit approaches.

What is important about this has everything to do with how the social enterprise community came together in a unified way, demonstrating a high level of global continuity around the meaning of “social enterprise.” For years, this new realm of hybrid ventures has struggled to define itself in a cohesive way, and the lack of a general consensus on terminology in this arena has been a constraint on the development of social capital markets, supportive policy environments, and other key pieces of the ecosystem needed to catalyze the growth of the field. A 2007 Atlantic Monthly article observed, “Much of the literature on social entrepreneurship is still devoted to figuring out just what social entrepreneurship is”.

Today, in addition to a growing global community of practitioners, social enterprises have new organizational forms tailored for their hybrid motives; most leading business schools have courses focused on social enterprise; “impact investing” has become one of the hottest topics in finance; the White House is now hosting a Social Enterprise and Opportunity Series of events; and a social enterprise, Grameen Bank, has a Nobel Prize decorating its lobby. These developments, and the united global reaction to this threat to the field’s identity, suggest that “social enterprise”—despite the lack of a widely accepted definition—has finally reached a critical mass of acceptance as a descriptor and brand for this movement.

We believe that social enterprise today is approaching a key tipping point of familiarity and acceptance that can propel this movement to heightened levels of impact and sustainability. What is needed now is for all nonprofit and for-profit enterprises that prioritize social impact and financial sustainability to band together under the umbrella of social enterprise and make the collective voice of this movement exponentially more powerful. Movements are based on the reality that there is power in numbers, and organizations such as the Social Enterprise Alliance in the US and others elsewhere exist to aggregate the voice and power of social enterprises and advocate for their interests in important matters such as this one.

Today, the voice of the social enterprise community was powerful enough to not just rattle the cage, but also to change the direction of a major corporation. Tomorrow, we must let this experience serve as the wake-up call that rallies social enterprises from every corner of the world to come together and ensure that our collective voice is so loud and so strong that no one will ever think about mistakenly adopting our brand again. Memo to all social enterprises: Stand up and be counted!

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COMMENTS

  • BY Jeff Mowatt

    ON September 14, 2012 12:57 PM

  • BY Allan Shore

    ON September 14, 2012 02:45 PM

    Change-washing is no different than every other effort to have profiteers grab the money share of every innovation for the public betterment. This is why I advocate so strongly on the charity side of the teeter-totter of balanced bottom lines. Like the green machines of sustainability, everyone wants to make a pretty much selfish buck on making a better world. This is why I also try to bring up fundamentally different, and therefore uncomfortable models of socially responsible integration, such as I reflect in my Burgers Against Obesity site that counters the effort to change food practices by picking on sodas or other food items (or even individual fat people). Food justice needs to get into the nickels and dimes of financial imbalance in order to get a system that doesn’t need bending and twisting away. I remember reading Blessed Unrest many years ago because it is an assessment of how we cannot have global ecological balance without first making human justice a priority. Same thing here. Otherwise the world will go the way of white-, green-, brain- and now change-washing. Nice piece though.

  • BY Allan Shore

    ON September 14, 2012 02:47 PM

    BTW - Just had an interesting discussion with Jed Emerson of http://blendedvalue.org and Impact Investing about what is happening as the movement turns into an “industry” since we worked on the early social service component 20 years ago. I think he’s more optimistic than I am of what will happen without a noisy group of us dissatisfied agents of balance—power to the true teeter-totter of responsibility!!

  • BY Peter Smith

    ON September 26, 2012 12:03 PM

    Great piece, thank you for your work on the update with Salesforce.com’s trademark!

    For a number of reasons, words matter.  I think that “social enterprise” is a fantastic phrase to define companies that seek to make a social impact in addition to profit, and I agree that the term provides unity and cohesion to the movement.  I hope many readers will take action to solidify and maintain the definition of the term and otherwise communicate it to the public.


    http://www.apexlg.com/index.php/salesforce-com-relinquishes-trademark-application-for-social-enterprise-what-you-can-do-to-protect-a-phrase-that-defines-a-movement/

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