‘Social enterprise is a verb. It is not a noun.’

The aim of social enterprise is to build a social value marketplace, it is not another means of doing corporate social responsibility, says a global social enterprise expert.

David LePage is the co-founder, director and managing partner of Buy Social Canada, an organisation which promotes social procurement – the buying of goods and services from social enterprise in order to drive social impact – and social enterprise certification.

Giving the international keynote at the Social Traders conference in Melbourne, LePage challenged the audience to view social enterprise as a means to create and accumulate community capital – and not as an end in itself. 

“It is how we use the marketplace to build healthy communities,” he said.

“We are not about being another means of doing corporate social responsibility, we are not sure we are fixing capitalism, but we are recognising that the purpose of money is actually a means not a goal.”

He told Pro Bono News people sometimes got caught up in a definition of what a social enterprise is, instead of what it does.

He gave the example of a social enterprise which employs people with a disability.

“It’s nice to have the business, but the real objective and the real value is we’ve created jobs for people who have been excluded in the traditional business model,” LePage said.

“If we only looked at it as a business, we would never look at that verb or that action, that is associated with it and to me that is how we evaluate the real impact of social enterprise.” 

He said society had lost the value of why we trade – placing too much emphasis on making individuals wealthier with money becoming the goal, while leaving many people behind.

The aim of social enterprise is to try to turn the economy upside down, and make it more inclusive.

But LePage said the sector was in the middle of an interesting debate between those who believe that if we can fix capitalism we can create a more inclusive economy, and those who argue that capitalism is by nature designed to create exploitation. It is because capitalism is working that we have ended up with so many social and economic problems.

“I don’t know the answer between those two,” he said. 

“Whether it’s the success of capitalism or the failure of capitalism, I think it is a long-term debate that we have to have.”

But he is unequivocal that we must move away from an economy that’s primary objective is creating wealth.

“I think what we’re trying to do in my mind with social enterprise is to move away from an economy that is based on economic wealth and economic transaction, to actually create a social value marketplace, that is actually focused on creating community capital,” he said.

He believes we are starting to see evidence of the strength of social enterprise to address difficult social issues. 

“We are now gathering evidence that the model will work, the model can solve these problems,” he said.

“I think we’re learning that we can actually leverage the existing exchange of goods and services not just to create individual wealth, not just to be an economic transaction but that trading in goods and services can actually be a means of transforming communities.”

LePage, who is also the chair of the Social Enterprise Council of Canada and member of the Social Enterprise World Forum Board, said social enterprises were part of something globally that was “emerging amazingly successfully”.

He said the depth of understanding on display in Australia was impressive.

In particular he pointed to Victoria as setting a global standard that other nations could learn from when it comes to effective CSR.

“Buying from [social enterprises] represents the greatest potential for huge social impact in Australia, with the state of Victoria setting a standard that others can follow,” he said.

“Every purchase has an economic, environmental and social impact, whether intended or not. Social procurement is about capturing those impacts and seeking to make intentional positive contributions to both the local economy and the overall vibrancy of the community.”

But he included the caveat that social procurement should be seen as a tool for community transformation first and foremost.

“The risk is businesses may miss the point and see social procurement as an easy CSR win,” he said.

He issued a word of warning about the need for CSR to be more than “window-dressing”. 

“Milton Friedman said the only purpose of business was to make money for the shareholders. Now these corporations have come out and said we’re going to change that, but in the same news article, someone said ‘well you’re saying that because if you don’t, we’re going to regulate you’,” he said.

“I think we have to be really careful that this movement is not driven just by images and stories, but it’s actually driven by changing the underlying values that we’re working with.”

For LePage, the motivation behind the business’ actions is key.

While he agrees that corporations who see the business case of being ethical should be encouraged in that direction, he believes if we’re going to change the long-term outcomes of social inclusion, it is essential to go beyond the product.

“Just as ‘green washing’ efforts diminish any real environmental change, we are seeing the emergence of ‘social washing’ – seemingly social value-based business activity, but in actuality merely done in the name of ‘marketing’, ‘corporate image’ or CSR,” he said.

“Social washing or ‘window dressing’ efforts will set us back or eliminate us from progressing toward a social value market.”

But he said he remained optimistic about the overall direction the social enterprise sector was headed in.

While he admitted social change was a long game, he acknowledged that it was important to celebrate the milestones along the way and understand that the pieces together add up to something bigger.

He said personally, he had no endgame in sight, taking his learnings from The Bhagavad Gita.

“It’s the basis of yoga. Do your duty regardless of outcome. So this is something I see as something that’s really important,” he said.

“People say, are you doing this to change the world? No, I’m doing it because I think it’s really valuable. And if we’re going to create opportunities, we’ve gotta try to do things different. 

“If I can have some influence on that, great. But I don’t think there’ll be a sign that says I’m done.”