Dr Richard Hull leads the MA in Social Entrepreneurship at Goldsmiths University, South London. Goldsmiths offers one of the few graduate programmes in the world dedicated entirely to the study of social entrepreneurship.
He met Thomas Barrett in London to discuss the teaching of business and how social enterprises are changing the world.
Why is the UK a good place to study social entrepreneurship?
In England, the Blair government and then Cameron’s were very supportive of social enterprises, but a lot of people saw their support as a backdoor way of hiving off parts of the public sector, so it’s been a rocky road.
It’s definitely one of the most interesting places in the world to do social enterprise and that’s why a lot of my students come here to study rather than in the US or Europe.
Scotland has a strong ecosystem of support. They have themed networks for social enterprises around food and agriculture or culture. They’re very good at supporting social enterprises. They’ve also had a long tradition of support for community enterprise which his now emerging here in England through Power to Change.
How has austerity affected social enterprises?
Our course is practically orientated but we also encourage students to step back and look at the long-term, broader picture. Austerity is just one manifestation of what some people argue is a dramatic realigning of the public, private and third sectors.
Austerity has in some ways pushed people to be more resourceful. It’s accidentally been good for social enterprise but it would have been much better if people hadn’t been forced into that.
Have business schools always had a social or environmental element to their courses?
Absolutely not! It’s been a real struggle for those of us who are more socially responsible to persuade business schools to shift out of a very narrow, economistic approach to management education.
Corporate social responsibility didn’t come from business schools, it came from outside, and it took schools a long time to latch on to what was happening.
What’s your intake for the course?
We have 15 full-time students and 5 part-time students, and they really are the most incredibly diverse bunch of students I’ve ever taught.
In my first year, I had somebody who was in their sixties who’d been an angel investor in Silicon Valley and now wanted to get into social investment. We had somebody else who was a professor in civil engineering who owned a biomass plant in India. He was wanting to look at ways of turning that into a social franchise. We also had a student fresh out of London Met, who had just finished his business degree. People come from all sorts of backgrounds and from all over the world.
Do they usually return to their own countries to set up there?
It’s very interesting because it means there’s a good productive dialogue between students from poorer countries and wealthier countries who are wanting to do things to help people in poorer countries. They learn as much from each other as they do from us.
There are lots of interesting things happening in South-East Asia. Thailand, in particular, is interested in social enterprises as a way of furthering sustainable development and helping farmers to diversify because so many of them are buying rice as a cash crop and having to buy food.
Vietnam is also interesting because they are one of the first countries in South-East Asia to have a law that supports social enterprise. I’m going to Thailand on Saturday as we are developing a dual degree with a university over there.
How do you balance teaching social impact with making money?
Some social enterprises are non-profit. A lot are set-up as the trading arm of a charity, and they give all their profits to a charity.
On the other hand, a company such as ethical shoemaker TOMS Shoes, sold half their shares to a hedge fund for $625m dollars.
We navigate around three different issues. One is your sources of income, another is your social mission or purpose, the third is your legal organisational structure, and it really is different in each case.
It’s a matter of understanding the lock-in effects of some of those aspects. If you think you are going to need grant funding for the first two or three years, which a lot do, then you need to think about having a charity or a social enterprise subsidiary so the charity can receive grant funding and the trading arm can continue to trade. Typically grants don’t get given to social enterprises.
If on the other hand, you have a really good scheme for generating income, and you don’t think you’re going to need a lot of grants, then you have to tackle the issue of guaranteeing your social purpose.
The students do a module on enterprenuering modelling, which teaches them how to involve all the different stakeholders, and they also do a module on evaluating the social return on investment.
Are there any tax breaks for social enterprises?
There are tax breaks for social investors. This is particularly useful for community renewable energy enterprises. One will start up and it will offer shares, and the amount that you invest can be claimed against your income to receive tax relief.
If a social enterprise is registered as a charity then it gets the benefit of not paying VAT or corporation tax, and it has subsidised business rates if it has premises.
In the UK we have the phenomenon of public sector social enterprises. A lot of leisure services were sold off, and some were bought out by employees. Greenwich Leisure is really big now.
There are also groups of nurses who want to spin out of the NHS and form their own community nursing co-ops. There’s an entity called a public service mutual, where they then sell the service back to the public sector.
However, lots of local authorities are unaware of the Social Value Act. It’s supposed to give an advantage to an enterprise that has additional social value.
What have some of your ex-students gone on to do?
Some have set up their own enterprises, some work for NGOs and quite a lot go into supporting social enterprises.
One student this year has progressed really well in the Santander social entrepreneurship awards selling a form of food wrapping which is an alternative to cling film. He’s going to do really well with that.
We do increase our coverage of sustainable development. So much of what we see is end-of-pipe solutions – cleaning up plastic bottles after they’ve been thrown away rather than stopping them being produced in the first place, for example. It’s an increasingly important part of the course and it’s what the students are interested in.