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A legal framework is not necessary for social enterprise development

Category : Business

Expectations and predispositions across the world are different, as the examples of Cyprus and Lebanon demonstrate

In the UK, the legal framework for charities is favourable and it exists. It is adapting to nurture social enterprise and reflects some of society’s predispositions and expectations. Definition debates are only worthwhile because this framework is secure. It is secure because the fundamental tenets of what our society is all about are already taken for granted.

In other parts of Europe, north Africa and the Middle East, the expectations and predispositions of society are different. A legal framework for charity, let alone social enterprise, does not exist in the same way. As these areas start to embrace a new spirit of enterprise, social enterprise need not be marginal: it can be mainstream, and trigger something bigger. This is why we shouldn’t rush to construct a framework.

“Entrepreneur” in other places often means someone that wants to “get rich quick”. The west’s thirst for growth is countercultural in other parts of the world where growth means quality of life, depth of relationships and community, and rarely just making money for the sake of it. Of course there are those that buck this trend, making fortunes. They are rarely heroes even though they can have a lot of power, and many emigrate.

NGOs and charitable organisations find it hard, because the expectations are different. Charity is part of the culture, it is a behaviour, rather than “charities”. It is a personal responsibility, it is not about organised volunteering or a professionalised sector.

NGOs and civil society organisations play an important and niche role. They are an extension of society, they do not replace it and so its growth is slower. In these places you won’t find many people calling themselves an entrepreneur. You won’t find many that realise they are a social entrepreneur. There isn’t a legal framework for doing good. The legal framework overall is trusted less, because in some places the rule of law itself is still being embedded. Many will work outside the rule of law yet still within the locally acceptable moral range, including some of those doing good.

In Cyprus the rule of law is embedded in north and south. A social entrepreneur is faced with a tough but simple choice. Become an NGO, make no profits with limited tax breaks. The alternative, create a for-profit company, make money and pay your taxes. While there are still efforts to enable charities and NGOs to be well organised there is little reason to become more enterprising.

Having said in an earlier article that there are considerable opportunities for social enterprise in Cyprus, it is unlikely that the small civil society sector will be the spring. Without a framework it is unlikely that the source will come off-the-peg.

Social enterprises in Cyprus are most likely to be tailored from the fine cloth of what will look like other conventional businesses. They will fit the mould of the best social enterprises elsewhere because of how they behave wearing those corporate threads.

In Lebanon the social enterprise sector exists and is organising its representation with government and how to influence a legal framework. It has a ten-year track record influencing the legal framework for priorities in society through delivery rather than campaigning.

In Cyprus the social enterprise sector is 10-15 years younger and has a heritage of co-operatives and philanthropy. Developing the social enterprise concept may be similar to elsewhere and work is underway. Supporting social entrepreneurs will be different. External best practice will work to a point, but those stories will lose something, and be resisted, by being imported and translated.

The right support needs to be excellent because at a fundamental level the social enterprises will have to be a competitive business, with a viable financial model. The unique value will be in how to support an entrepreneur to develop a cultural model that enables the company to achieve its social and environmental objectives. When it comes to developing social investment, the legal structures of the companies are already matched. However, as with entrepreneurship, the investment culture in the broader sense needs to be developed.

The DNA of for-better-profit businesses may be 80%+ the same as a for-profit business. The ability of those entrepreneurs to speak the same language and be embedded in the network of the wider business community, may trigger sustainable business cultures across the economy. It may be possible that the business community will contribute to sustainable development, with less complexity and more depth than CSR initiatives. When a framework does evolve it may not segregate social enterprise from business. Social enterprise support in this context is about sustainable, integrated business and economic development, based on local comparative advantages.

Richard Catherall is creative executive director of Katarsis Ventures

This content is brought to you by Guardian Professional. To join the social enterprise network, click here.

Further delays to Egyptian NGO trial

Category : World News

Case against 43 NGO workers accused of operating illegally and receiving foreign funds has been adjourned.

Originally posted here: Further delays to Egyptian NGO trial

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Egypt parliament to question PM over NGO case

Category : World News

Lower house speaker criticises “flagrant interference” behind Cairo’s decision to release NGO workers.

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Egypt Says It Will Allow Accused Americans to Leave – New York Times

Category : Stocks
Egypt Says It Will Allow Accused Americans to Leave
New York Times
CAIRO — Egyptian officials said Wednesday that they would lift a travel ban barring seven Americans from leaving the country during the politically charged prosecution of four American-financed nonprofit groups here, apparently resolving a crisis that
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Foreign activists set for trial in Egypt

Category : World News

Pro-democracy activists working for NGO’s are accused of receiving foreign funding to help stoke unrest in Egypt.

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