Category Archives: High Impact Businesses

Balkans summer of 2007

During the summer of 2007 I spent seven weeks travelling in the nine Balkan countries to meet with and learn from the best social enterprises and social businesses and celebrate their achievements.  I set out on this excursion for many reasons, but primary among them was the fact that Catalyst, our company, is focused solely on helping social businesses to succeed, and we were celebrating our 10th anniversary.  Also, and perhaps even more importantly, I was celebrating my 50th birthday this year and wanted some special way to mark these milestones.  Visiting this war-torn region, and focusing on the best coming out of it, seemed the right way for Catalyst and me to celebrate.

My attraction to the region began four years ago when I first visited Sarajevo.  I did not however make any local contacts, so my trip began without any “locals” to visit.  On the advice of a very good friend I drafted a two-page note, which described what I was doing, what I hope to get out of the trip and what I hope to give back to the region.  I then sent out and received several hundred e-mails.  The result was over 100 meetings, a wonderful summer, a fantastic education and an experience that will last a lifetime.  My Catalyst colleagues and I sometimes muse that this business of “engaged tourism” is a potentially interesting one in and of itself.  And since this trip, we have had offers from many parties looking to be “catalysts in” (the name we gave to these journeys—for more information see in other regions.

The political, economic and social context of the Balkans is a particularly challenging one.  Without going into a lengthy historical analysis, this adds a degree of complexity western entrepreneurs can only imagine.  It is only in Bulgaria and Romania, which have been rebuilding since 1989 and have just entered the EU, where the governments are relatively stable and lack a sort of “wild-west” feel.  Elsewhere, in the countries most affected by the aftermath of the bloody 1990s war, there exists a “kleptocracy” of sorts, unsurprising in light of the widespread trauma.  This will take years to fix.  Corruption is widespread and influences much of economic activity.  Furthermore, in several countries, borders imposed by Western powers do not command broad popular support and create an eerie tenuousness.  The uncertainty over Kosovo in the aftermath of the recent election is perhaps the best known example.  Much less appreciated, but much more worrying in terms of long-term regional impact is Bosnia-Herzegovina, a patchwork of quasi-autonomous regions and the result of an unhappy and unsatisfying compromise still without a final resolution.  Yet there is no guarantee that such a resolution will be peaceful.

On a more mundane level, transport links between countries and within countries are appalling.  Getting around this mountainous region is extremely difficult, as is getting in and out.  Regular flights to and from the major capitals are not frequent and relatively recent.  Finally, the international aid picture is highly problematic.  The Balkans has been highly dependent on international aid, creating a dependency culture.  My non-expert judgment, from the brief encounters I have had with various agencies, is that only some of this aid has been put to good use.  In many cases it has been subject to political agendas or the same governmental “influences” which plague the rest of the economy.  Furthermore, aid flows are drying up now that the crisis has passed.  It is not clear that a sustainable economy is ready to take up the slack.

There exist some large domestic businesses which owe their allegiance to certain politicians.  They provide jobs, but their sustainability is unclear as they remain immune from normal market forces.  International firms have arrived, taking advantage of cheap, skilful labour and this has made a difference.  Many also practice some form of corporate social responsibility, and this has been a positive force in the domestic economies.

Social businesses and social enterprises have sprung up and in many cases have prospered.  I found quite a few in the organic food sector.  This is unsurprising, as the Mediterranean climate and large tracts of arable land make this a highly suitable industry.   Organic farming has been practiced here for centuries because, as the locals point note, “we could not even afford the chemicals if we wanted them.”

SMS, based near Split, Croatia, is a very good example of such an organization.  Although they are only now completing the process of organic certification to qualify for certain Western markets, they have been involved in organic food production since 1989, when they were founded by Srdjan Mladinic.  The company combines attractive packaging with high-quality food products and has developed increasingly loyal following in Western markets and has just established a relationship with one of Croatia’s largest food companies, Podravka.  (All the companies mentioned can be found via

Across the region, in Sofia, Bulgaria, operates Gorichka.  Begun by a serial social entrepreneur, Lubomir Nokov, this is an organic marketing company, finding markets for Bulgaria’s many small organic food producers.  This is a relatively new company with enormous potential.  This is in no small part due to the fact that the principals have already built a commercially successful tennis club, with strong green credentials, and a high street fashion outlet.

Eco-tourism is also enjoying considerable growth in the region.  These companies offer sustainable tourist experiences largely to “green” Westerners.  The two best examples of these I came across were in Bosnia and Montenegro.  Operating out of Sarajevo, Tim Clancy and Thierry Joubert run Greenvisions.  This is an ecotourism company, which also provides summer camp opportunities for both local and foreign youth, is an advocacy group in the region for sustainable tourism and is in the process of developing appropriate and green tourist accommodation for Western visitors.  They are an extraordinary energetic company—and have embarked upon a project to create a pan-regional affiliation of ecotourism firms, who will create what they hope will become a new pilgrimage route—the “Via Dinarica”.  Montenegro Adventures, run by Slavica Vukcevic, was actually spawned by a development agency called CHF International.  They are successfully developing Montenegrin sustainable tourism and are working in partnership with Greenvisions to create the Via Dinarica.

I could mention more social enterprises—run by extraordinary individuals operating in very difficult circumstances.  They do exist and are thriving in the region.  They also may offer particularly useful solutions to the problems of the Balkans.  First and foremost, their social mission provides them with the purpose that keeps them going, helps offset the low wages they inevitably pay and is the “glue” that holds them together despite the most difficult circumstances.  Secondly, by being outspoken on social and ethical issues and practicing what they preach, such businesses are widely respected for not being part of a corrupt economic system—this greatly assists their visibility. Thirdly, they operate at a size which enables him to be very flexible and responsive to changing market circumstances and needs.  In addition to flexibility, being small means they tend to operate “below the radar” of government officials and thus remain relatively clear of the sort of influences which could subvert their purposes.  As time goes on, of course, and if they become very large and successful, their ability to continue to operate freely will come into question, although hopefully, political circumstances will have greatly changed by then.

Social businesses and social enterprises also benefit from what Nejira Nalic, of micro-finance firm Mi-Bospo describes as the “thoroughly liberating nature of commercial activity.”.  Having been largely dependent, as a small but rapidly growing firm in Tuzla, Bosnia, she despaired at all the “handouts” on which she relied to keep the business going.  As the organization grew and became increasingly professional in nature, and profitable, Nejira began to engage with large international funders, not as a recipient of aid, but as an equal partner in a commercial transaction.  Put simply, they could buy her profitable loan book or not.  If the price was right, she would sell and if not she would look for another purchaser.  To Nejira, this new feeling of economic empowerment has been immensely motivating, both for her and for her staff.

By far and away the most impressive, and most effective of the social businesses I encountered was the radio station and now media enterprise B-92, operating from Belgrade, Serbia.  A small, and relatively unknown commercial radio station found itself becoming the “conscience of the nation” during the Milosevic era.  Unwilling to “fly under the radar” of the government, Veran Matic and his colleagues flew directly into oncoming traffic, with nearly catastrophic results.  They received death threats, their equipment was destroyed several times, and yet they persevered and continue to broadcast throughout the war.  I did not meet anybody in the region who was not familiar with them, and nearly everyone noted that during the war, they provided hope and the truth to Serbians, and ultimately assisted in bringing down the government.  Today they have become a successful media business, but have not lost their edge, focusing on issues such as domestic violence, the need to give blood, and the importance of racial and ethnic tolerance.  They both highlight these issues, and act as a catalyst in fund raising efforts to support related causes.

So when observers wonder, what social enterprises or social businesses can actually achieve, I urge them to consider companies like B-92.

First Published in Alliance Magazine in November 2007.

The Conscience of the Nation was Born in the Lap of a Saint

I have met many great social entrepreneurs on this journey, and will meet many more. Some will achieve greatness, others will make their own difference on a less grand, but no less important scale. Yet very few will have the impact of Veran Matic, the inspiration behind B92, the organisation which is the single most famous and important social business in the entire region. There is no single person I tried harder to meet than Veran–and finally, thanks to Dragana Nikolic Solomon, had the pleasure of meeting him with his interpreter, Vlada Brasanac, on 20 July 2007. What a story!!

I will not bore you with a lengthy history of B92. Interested readers can purchase Matthew Collin’s gripping book, “This is Serbia Calling” and get the full picture of B92, its background and its impact. During the 1990s and all the “troubles” under Milosevic, B92 became nothing short of the conscience of the nation. It was simply a radio station, initially a not-so-popular one; what it became was, in the words of one person I later met, “the single most important thing to me in my whole early life, period”. B92 took on the Government and provided the only independent voice at a time when all other outlets were under strict control. This was not easy. Employees, especially the Directors, were subject to regular personal threats, the station was shut down several times, equipment stolen and destroyed–and they continued to broadcast, and fearlessly remained independent. Critically they did not become the voice of the opposition–and gave a regular opportunity for the Government and other illiberal forces to state their views, as well, on the air. They were unique only in that they gave listeners the full picture–of the war and its atrocities which the Government was perpetrating in their name.

Today, B92 is a successful and diversified media company. It does TV, radio, publishing, produces movies, etc. It is a serious commercial enterprise, broadcasting programmes with a huge following, such as ”Big Brother” (although their version does have a twist) but at the same time, will follow up with a documentary about the tragedy at Vukovar. It is backed by commercial media investors as well as “soft” money, and partly staff-owned.

Yet refusing to rest on its laurels, it now has strayed further into the social side of the business. A year or two ago it tried to raise money on the air for a “safe house” for women who were the victims of domestic violence. It raised so much money, it built three! More recently, it mounted a campaign for mobile blood units, urging people to help replenish Serbia’s depleted summer stocks (Veran himself gives regularly). Its next project will be a Holocaust-based exhibit that will focus on Serbia’s role in the extermination process. In all three cases, B92 highlights an issue most Serbians would prefer to ignore–they raise money and awareness about these topics–and then they make practical suggestions for moving forward. For example, the Holocaust exhibit will primarily be about tolerance in a general sense, and not be limited to the WWII atrocities, a quality not only lacking in Sebia but all over the world!

So the question is, what makes a guy risk life and limb to do all this. Veran offered a wide range of intellectual arguments, the UN Declaration on the Freedom of Speech, etc. I feel a personal anecdote is much more telling. When he was about 7 or 8, his deeply religious and beloved grandfather was losing his eyesight. To help him, young Veran used to sit in his lap and read to his grandfather from the bible. In addition to reading they chatted about the ethical and moral issues contained therein. I am not sure if Veran is religious–I failed to ask him (a mistake no decent journalist would make!), what I am willing to bet on is that there, in the lap of this great man, is where Veran’s ethical compass and moral courage were formed. But for this, there is no telling how things might have ended.

I can think of nothing else to say, but I tell you this. I am going to pay more attention to what I say when my grandchildren sit in my lap as my own sight fades-perhaps the fate of a nation will depend on it?

When successful social entrepreneurs cash in their chips…

Yesterday I had a delightful lunch with a well-respected journalist.  Somewhere amidst the tagliatelle, the conversation turned to The Body Shop and how my lunch companion felt betrayed by the Roddicks’ decision to sell out to, in her words, “bloody L’Oréal, of all people” (see BBC article ‘Body Shop agrees L’Oreal takeover’).

There followed a fascinating conversation.  I owe her thanks for raising the point and giving me one of those rare opportunities to quote (or mis-quote) a journalist, rather than the other way around.

She felt betrayed by the deal because she had, for years, persistently bought Body Shop products because of what the company stood for, values which she felt would disappear under L’Oréal ownership.  She also felt that L’Oréal was uniquely bad, in part because of its policy on animal testing.  She did not mention its 26% ownership by Nestle, a consistently pilloried company.

I am not an expert on Nestle, L’Oréal or animal testing.  What I believe is that L’Oréal paid what The Body Shop board considered to be an attractive price – I am not aware of any other bidders.  It would be great if we lived in a world where there was a large ethical buyer around to put forward similarly attractive bids for companies like The Body Shop but, alas, we do not.  In fact I cannot think of any large ethical company – certainly not one in a related sector.  Who else could have launched a bid?   A private equity firm perhaps, but they too would eventually exit – would they accept anything less than the highest possible price for their asset?  No!  So the owners could have passed up an attractive offer to maintain their “purity”? But no Board of a listed company can do this.  Our system does not allow for this.

Secondly, Anita Roddick has publicly argued that as part of the L’Oréal empire she is having a positive influence on their practices. I suppose scepticism may be called for – but what if she, and The Body Shop, is changing L’Oréal?  If L’Oréal is as evil as its critics claim, should one not at least try to “convert” it?  Can anybody think of someone better-positioned to adjust L’Oréal’s position than this battle-hardened, resourceful revolutionary?  Given what The Body Shop has done globally to get social and ethical issues incorporated into consumer behaviour, why not give them the benefit of the doubt?

For the sake of full disclosure let me say that I know the Roddicks, have worked with and like them – so perhaps my objectivity is hindered, but who among us is really objective?  Also, there is a bigger point to make here which is getting lost.  We can chuck stones at The Body Shop and the Roddicks, that’s easy (and very good fun), but they have done far more for the social business movement than me and most others.  I worry that in our desire to hold revolutionaries to very high standards (standards which most of us rarely adhere to) we will discourage other from trying.  And if we can indeed advance the social agenda at firms like L’Oréal, even marginally, then such progress needs to be applauded, not picked apart, at least at this early stage.

The 2007 Skoll World Forum:The thorny issue of CEO pay

I had the privilege of attending, for the second time, the Skoll World Forum on Social Entrepreneurship, in Oxford, from which I’ve just returned.  The conference has emerged as the world”s pre-eminent gathering of social entrepreneurs.

A variety of interesting and thought-provoking issues emerged, each of which would justify its own posting.  One of the most fascinating to me, and it came up at several sessions, was that of pay.  In short, what social enterprise chief executives can or should pay themselves.  Putting aside financial constraints, there appears to be a big question around the moral issues regarding the level of remuneration that can be justified for enterprises that claim to operate along social lines.

A CEO of one business asks how much is appropriate for her to be paid.  Another social enterprise founder mentions the fact that a key staff member earns $100,000, prompting loud groans and rolling eyes of those in attendance.  (It subsequently transpires that this employee subsequently leaves for twice the money to the private sector.)

I have seen this issue surface recently outside of Skoll as well.  I know a firm, which has been started by two high paid (but not independently wealthy) media executives.  In their case, they are vital to make the enterprise succeed, but feel queasy to pay themselves even one third of their private sector pay packets.  The business will not succeed without the skills they “bring to the table”, but their families depend upon their earnings to bring sustenance to their family “table” as well.  Another CEO pays himself a derisory salary as chief executive, even below charitable sector standards.  Yet his competitors at other firms perform the same role on a voluntary basis.  For this, the chief executive has come under criticism.

While I sympathize with those who feel private sector executive pay has gotten out of hand and concur with the view that social enterprise CEOs cannot be mercenary in their approach to their own compensation, I think this has gone too far.  Furthermore, the unwillingness to pay close to competitive wages is puritanical and short-sighted.  It will inevitably lead to slower growth for social enterprises and social businesses, and cause a long delay in bringing forth the substantial social returns they can generate.  It is simply a fact of life in our system that certain skills are vital to the success of fast growing businesses, and in many cases these skills are high-priced.  Moreover, not everybody in an organization has the dedication or the family circumstances to carry on in the social enterprise irrespective of financial reward.  I think it’s vital that as the social sector matures it also “grows up” with respect to this issue of pay.  Failure to do so will be like cutting off its nose to spite its face.

Size matters – for social business

Social businesses tend to be smaller than mainstream businesses.  This is unsurprising given the fact that the social business phenomenon in the UK is relatively new, and many of these companies will have only started in the last few years.  Yet I see there relatively small size is having advantages, and moreover, puts them in a position of being morally superior – at least for now.

I have worked all my life for large companies and found that they share certain similarities with large entities in the charitable sector and also in government.  One feature of this size is that in order for the organizations to function effectively they become highly vertical.  That is to say that with several thousand employees, there tends to be many layers of reporting lines between the CEO and the individual on the lowest rung of the ladder.  This is necessary–in fact, it is hard to imagine any other way in which they could operate.

By being smaller, social businesses have fewer layers between the chief executive and the clients being served by that company.  As a result, the cause-related aspect of social businesses is strengthened by the proximity of the chief executive to the clients.  Her or his success and that of the organization will ultimately be determined by how well it delivers to clients.  With the large organization, by contrast, I contend, that the connection between customers and the chief executive is highly attenuated.  Their success, or more to the point, their compensation, is largely a function of staying in place.  The skills required to achieve this end, are not at all the same as those required to meet the needs of the market – their clients.  They are about survival, not service.

I believe it is inherent in the highly vertical nature of large corporations that the distance between the market and the leader leads to a corruption of sorts, in that the CEO’s imperatives (or the Prime Minister’s) are often, in my experience, not aligned with the mission of the organisation (or the citizens) – at least in the short term.  On the other hand, the closeness of the social business leader to the market and to the social objectives for which the social business strives is good for the business and good for the cause.  Thus, for now, at least until social businesses find their own path to corruption, I believe they remain morally superior, and also likely to be more effective in achieving their aims.

Profit without honour in social enterprise country?

‘Absolutely not!’ ‘No, I certainly would not include them.’ These are typical of the surprisingly forceful and unambiguous replies to the question, ‘is Justgiving a social enterprise?’ For those of you who have not heard of it, Justgiving is a privately held company that has become Europe’s largest online giving website. I was involved with the business from 2003 until this March (when I stepped down as Chairman), and in this capacity have put the question to several well-known experts from the social enterprise sector.

But consider. Justgiving will enable well over £70 million to find its way from donors to charitable causes this year. A substantial portion of this flow of money to charities would not have happened otherwise. This financial impact places the company on a par with the UK’s largest charities, some of which are decades old, in contrast with Justgiving, which began in 2000. The firm employs an ethnically diverse staff, is run by two women (still unusual among businesses) and formally considers the broad spectrum of stakeholders (not only shareholders) in its actions. Beyond the cash it raises for charities, Justgiving helps them by promoting their message, reducing back-office costs, and boosting their online fundraising efforts.

The ownership question

There is, of course, a lack of agreement on what exactly constitutes a social enterprise. Is it what an enterprise does or does not do, where it does it, how it does it, why it does it, or who does it? Justgiving, according to the experts, stumbles on a different hurdle – how the company is owned. The disqualifying factor is that its investors may profit handsomely from its success. This, they believe, trumps any other consideration and is the quintessence of all that is wrong with our economic system.

In my own view, Justgiving is very much a social enterprise. More importantly, its capital structure allows substantial wealth accumulation, and it may well be this that has led it to be more successful than it would have been otherwise, and so to generate that much more in social benefits.

The saga of The Body Shop may be instructive in this regard. Commentators were outraged by their sell-out to L’Oreal. Yet, as I argued elsewhere (see Guardian Unlimited, 30 June 2006), this event is in fact likely to be a substantial boost to social businesses. The sector is in need of commercial success stories which encourage other investors. And, given the history of the Roddicks, much of the £100 million plus heading into their hands is likely to wind up in social enterprises.

The growth of Justgiving

Justgiving has similarly been very successful. Since 2003 the charitable flow has increased from approximately £2 million to an expected level of over £70 million in 2006. This astonishing growth rate has been matched in revenues and a seven-digit loss is budgeted to become a seven-digit profit. In addition to becoming the dominant UK provider, Justgiving has expanded into the USA (a too-rare example of innovative business models moving westward), enjoying extraordinary growth there as well.

Close observers attribute Justgiving’s success to very easy use of the website. I have yet to meet a person who has not made this comment (and I have asked many), and Justgiving’s own research documents a high rate of customer satisfaction with its core product offering (an easy, quick and simple way to donate to charity over the internet). The company also benefits from a deep understanding of the customer experience and a clear knowledge of exactly who the customers actually are (the latter taking many years to refine). This high customer satisfaction and related ease of use is the result of ruthless examination and testing of every minute aspect of its offering. I have found this at Justgiving and other profit-seeking companies but rarely in enterprises where the wealth accumulation motive is absent.

As with all start-ups, effective cost control has been very much in evidence. Furthermore, compared with other dotcoms, Justgiving frittered away little of its resources on wasteful mass marketing. The CEO is also an astute judge of which new initiatives represent fantastic opportunities and which will just eat up valuable time. This heightened sensitivity to waste and aggressive resource management is also typical of profit-seeking entrepreneurs I have observed. By contrast, I have found others in the charitable or social sector to be at times more relaxed about expenditure. Lastly, but perhaps most importantly, the CEO has selected an excellent team which complements her own considerable strengths very well.

Why for-profits might have an edge

Justgiving’s remarkable growth has not gone unnoticed by competitors in the UK and overseas. CAFonline, which is part of the Charities Aid Foundation (CAF), operates in the same marketplace but has enjoyed far less growth. While detailed figures are not available, we have been told that since its inception when was this?, £29 million has been transacted through CAFonline accounts, in contrast with Justgiving’s total of £35 million in 2005 alone. Given the divergent growth rates, this gap is likely to increase.

Few would deny that CAFonline is a social enterprise and many would also agree it has been successful. Yet the gap in performance between it and Justgiving is too great to ignore. Close observers of social enterprise thus need to address a fundamental question: is there something which profit-oriented models bring to the social enterprise sphere which may, in certain cases, create incremental social value? In raising this question I am assuming that more donations to charitable causes equal more social value. This is admittedly only one dimension of social value, but few would deny that more money to charity is better than less.

This is not to say that CAFonline does not make an important contribution as a social enterprise. Its goal is not to earn profits (CAF itself seeks to break even) but to enable and increase funds going to the charitable sector and bring donors and charities together. In doing so, it works with more charities than Justgiving does (permitting access to approximately 220,000). CAFonline perhaps does so because of the social impact of such a service, which is consistent with its mission, and its ‘paid for’ services enable it to reinvest in free services for charities. Justgiving, with its different objectives, would not take on any clients that would be unlikely to enhance profitability overall.

Without going into the relative quality of the work the two organizations do, it is clear that the differences in their objectives result in different behaviour. The two organizations have different goals, perform different roles and generate different results. Both increase social value. Given the explicit objective of generating maximal growth in online charity giving, a worthy goal by most yardsticks, the Justgiving model appears to work better. Professionals with an interest in fostering social enterprise are doing the sector a disservice by excluding it from consideration.


Profit-seeking companies, of course, do not always grow faster or perform better. Bmycharity, another UK-based private company active in the sector, is substantially smaller, with £7 million in donations since its inception, although it was profitable before Justgiving. The far larger US-based Kintera has lost money consistently (in the first quarter of 2006 it reported a net loss of $9.3 million on revenues of $10.7 million). But none of this undermines the argument that the for-profit model should be considered a potential producer of social benefit.

We in the UK social enterprise sector need to explore varied models to achieve our social objectives. By eliminating those that seek a profit we disadvantage the sector and discourage badly needed capital from entering. I think we should applaud successful fast-growth businesses like Justgiving, which also generate social value.

First Published in Alliance Magazine in July 2006.

C’mon…………….lay off the Roddicks!

Earlier this year The Body Shop, the campaigning heath and beauty company, announced it was to be acquired by French luxury goods manufacturer, L’Oreal.  To many, this represented a sell-out of tragic proportions.  The Body Shop had been a trailblazer among UK ethical brands, and Anita Roddick, its co-founder (with husband Gordon), was one of few visible and well-known advocates of the notion that business could and should be socially responsible.  It was of this version of the capitalist model, often referred to as “social enterprise” that Anita was “poster child”.

Tragedy turned to disaster, as it emerged that L’Oreal was itself 26% owned by Nestle.  In the food industry, Nestle has been a lightning rod for criticism by “socially responsible” investors due to a range of practices, particularly in the less developed countries.  Anita’s protests that she would change L’Oreal from within sounded optimistic at best—if not naïve or even cynical.  The Guardian newspaper reported that since the announcement of the acquisition The Body Shop’s ethical rating has fallen from X to Y since the announcement.

Knocking the rich is good sport, the question is whether those of us with a strong interest in the growth of social enterprise should mourn or rejoice at the cashing in of the Roddick chips.  There seems a strong for celebration for supporters of social and ethical enterprises willing to take a dispassionate view of events, based on several factors.

First, there is a very strong and unmet demand for capital amongst UK social enterprises.  One reason for this is the simple absence of big success stories.  Apart from the Body Shop, where is there another example of a UK social enterprise that has been a big win for investors?  There have been innovative models, which result in much social good (e. g. The Big Issue)—but few have made people rich.  One possible exception has been Green & Black’s, which, like the Body Shop, has suffered much criticism since its sale in 2XXX to Cadbury’s.  And the Body Shop has been immensely successful…just ask the garage owner/family friend who lent Gordon and Anita £8,000 (after many banks had turned them down) and is now sitting with 21% of the proceeds of this £xxx million sale.

Such stories fire the imagination (and fuel the greed) of potential angel investors into social enterprises in the same way the astonishing returns to early backers of Ebay, Amazon, Google and others encouraged the massive growth in US venture capital investing.  There may yet come a day when investors are willing to part with meaningful sums of cash for social purposes alone, and this pool of capital is growing.  But it is still meagre in comparison with the need.

The second cause to be jubilant at the enrichment of Gordon, Anita and their early “angel” is that most of their cash is likely to be recycled into social enterprise and the charitable sector.  They are on record as saying they will give most of their money away.  If we consider what they have done to date with their salary and dividend income there are further grounds for encouragement.

Over the course of the past two decades the Roddicks have backed social enterprises, charities or campaigns in such diverse fields as organic food, third world development, conflict resolution, environmental protection, ethical sourcing, human rights, etc.  They have also been backers of many of the best-known UK social enterprises including Freeplay, the manufacturer of windup and solar radios, sold predominantly in the third world, and the aforementioned Big Issue, a pioneer in helping the homeless.  While Anita has been the public face of the duo, Gordon has provided not only cash, but also valuable time and expertise to many budding British social entrepreneurs.  The idea of this wealthy couple, slipping off to a quiet and comfortable retirement on the back of their millions is laughable.  More importantly, the sale of their stake in the Body Shop represents a windfall to the social sector.

Taking shots at the successful is a great pastime.  Finding inconsistencies in those we perceive to be a bit sanctimonious can be a source of great delight.  By identifying the flaws in “the great and the good” we can feel better about our own shortcomings (hey, these guys are really no better than me!).  But while engaging in this sport those of us who care genuinely about the growth of ethical business need to put forward the positive arguments as well when our most successful social entrepreneurs cash out.

First Published in The Guardian in June 2006.