One of the questions I am most frequently asked is how ClearlySo defines what is socially impactful, or not. This is not a question of measuring impact but simply what does and does not count as an organisation which generates social or ethical or environmental impact. I have answered by saying that we define it as other people do.
I do not believe it is our role to define this for others. We are a “taker” in the decision-making process. Our definition of what counts and what does not is heavily determined by the opinions of others (especially investors) and these views are highly subjective.
ClearlySo’s first ever fundraising client is a firm called Belu Water. At the time they marketed themselves as the “carbon neutral bottled water company”. The founding entrepreneur and investors behind it (these included Gordon Roddick and The Big Issue) convinced us that the company generated important social impact and we took on the mandate— this was about 10 years ago.
To some observers the very notion of an ethical bottled water company seems absurd. If you really want what’s best for the environment, they would argue, why not just drink tap water? Belu would respond, and it was a response we agreed with, “that people are going to drink bottled water anyway, so is it not better that they drink our water instead of somebody else’s?” We thought and continue to think there is a lot of merit in this point of view (although others disagree) Belu Water continues to be a respectable firm in the field of ethical consumerism. However, this story underscores the point that what is social or ethical and environmentally impactful to one individual may not apply to another.
We found this also with a Thailand-based enterprise we work with many years ago called Cabbages and Condoms. This was an organisation focused on reducing the spread of sexually transmitted diseases in Thailand. It raised funds through a host of activities and from a campaigning standpoint sought to make condom use and sex funny and thereby more widely accepted in the Thai market. Many more conservative Thais were outraged by this sort of activity whilst others applauded its successful penetration of the market and its clever use of humour. The enterprise won many awards.
The range of enterprises we work with at ClearlySo pretty much spans the entire scope of economic activity in Britain. We work with companies in health, education, transportation, property, technology, consumer goods and many other fields. I used to say that defence is probably the only sector where we were unlikely to have any clients but some years ago wrote a blog piece speculating on what a “social enterprise army” might look like (does anybody know where this piece is—I cannot find it). It was meant as a thought piece, and in that regard felt a very useful exercise. I think the answer to the question of what is and is not social is also heavily determined by the culture in which organisations operate.
For all these reasons I was particularly interested to read about a new fund in the Netherlands which has invested into what is effectively a cooperatively owned prostitution business in the red light district of Amsterdam. DutchNews.nl reported that the Start Foundation, an organisation operating out of the Netherlands, has taken a stake in four buildings in Amsterdam’s red light district and will rent these out to a new business called My Red Light, which describes itself as “the first sex company in Netherlands and Europe in which sex workers have control”. Some will be appalled by this use of impact investment, whereas others will take the view that this sort of thing happens anyway and better that sex workers are able to look after themselves, have control of their destinies and reap the benefits of their labour instead of those who would exploit them. Certainly within the Dutch context such a business idea seems perfectly reasonable and an appropriate impact investment. Less controversially the Start Foundation has also invested in a shrimp processing plant for workers with mental disabilities and an IT company focused on employing people with autism.
There is no getting around the fact that what is social to one person might be “the root of all evil” to another. Consider, for example, what different groups will think of an investment in a locally owned organic producer of whiskey. We come across such companies all the time and the debates are challenging but also entertaining. This is the tricky domain you enter in impact investment.
The title of this blog is a play on the title of the
hit musical “The Best Little Whorehouse in Texas” that opened on Broadway in 1978.