The Worst Kind of CSR: what makes a "Social" Enterprise?

Charity, is the worst form of Corporate Social Responsibility. My initial advice to someone asking how to differentiate their social enterprise from antisocial enterprises ... was simply, that they should identify where "society" sits on their Income Statement. I'm using technical language, so bear with me.

Perhaps the easiest way to explain this, is whip out the tradition Income Statement (or "P&L") and present it to the student sideways ... literally. First consider the notion that every line represents a counterparty, and that the sum of all counterparties is what we call our "society". It is possible that some activities of a business are not captured on the P&L, but that these activities still affect counterparties ... that is precisely what would be meant by saying, that some part of society has been left out from the P&L.

Now turn the sheet of paper sideways, so that the lines of the P&L are travelling across the table, parallel to the student's line-of-sight. Then consider that the counterparties on each line have a sense of happiness ... and that this happiness level has nothing to do with whether they are income- or expense-counterparties. Someone paying you an income may be happier OR sadder than someone you pay. Presuming that our P&L is also sitting flat on a table, we can then graph the degree of relative happiness of each counterparty in the plane that is perpendicular to the table top - for example, if happiness were a line rising above the table, and sadness were a line descending beneath the table.

Build that chart, and it should give you a pretty succinct idea of whose lives you're fucking up on a daily basis. Making more lines rise above the table is what makes an enterprise more "social".

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Alternatively, you could model happiness as a currency, but then you'd have a multi-currency P&L ... which you might then abstract back into one base currency for reporting purposes. This would make apparent the transmission of value across currencies ... putting us back at the kind of social enterprise which is structured to "fuck things up over here, make money, and then hand it out over there," literally the worst kind of CSR, as I was saying.