Are Our Colleges Social Enterprises?

Posted April 16, 2007

David Schleich, PhD

Last issue we considered how identifying funding sources and social orientation could help classify our schools. There are a number of typologies into which our colleges might fit, though, apart from these two key variables. The “social enterprise” notion, for example, can help us to locate our institutions within civil society and make sense of the tension that arises when our programs are caught between sectors.

The CNME-accredited programs we all support do not always fit neatly into a typology – neither of higher education institutions nor of institutions located in what has been identified as the voluntary/non-profit sector (Salamon and Anheier, 1997). In many ways, these programs have their corporate footprints in both areas. Close observation may propel us to the conclusion that none of our institutions (or programs within institutions) exactly fits into a simple definition or classification within the literature of social enterprise typology. However, each does, in many ways, tie in with what the scholar Quarter calls a “non-profit mutual association,” serving the members of the profession, but also ultimately serving the public (Quarter, 1992; Quarter et al., 2003).

A Social Enterprise Typology …

Alter (2004) breaks down such traditional boundaries between the non-profit and private sectors by identifying what she calls a “new institutional animal,” the social enterprise. Her social enterprise typology “explores how institutions have combined a mix of social values and goals with commercial business practices” to come up with an illustrative typology that “classifies different models of social enterprise in order to navigate readers through the currently ill-defined, diverse and dynamic landscape of this emerging field” (p. i). She defines a social enterprise as “any non-profit-owned, revenue-generating venture created for the purpose of contributing to a social cause while operating with the discipline, innovation and determination of a for-profit business” (p. 11). Our colleges, then, in her definition, are not merely socially responsible businesses or corporations practicing social responsibility.

Our schools, with their mission-centric goals, tend to defy neatly labeled slots for a non-profit in the social economy, but Alter’s work moves us closer to a functional typology. This kind of conversation can help us, in turn, when we intersect with government or business colleagues/partners who are trying to understand what we are and where we’re headed. My take on these typologies suggests that a blend of the works of Alter and Quarter et al. is a good platform, since our college presidents and deans seem most comfortable when their organizations are depicted as social enterprises and their specific professional associations as non-profit mutual associations.

Alter, in any case, describes the “hybrid organization,” part for-profit and part non-profit, at least in behavior if not bottom-line outcomes. Whereas the purely philanthropic non-profit appeals to goodwill, she explains, the purely commercial enterprise appeals to self-interest. Our colleges, in this framework, then are hybrids with what Alter calls “mixed motives” (p. 6). She explains in her valuable typology that the hybrid organization that is non-profit pursues “dual value creation strategies” to support its social purpose. The frequently touted social purpose of our colleges is to grow the naturopathic profession in North America, and to advance the cause of natural medicine on the planet. At the same time, as hybrids they build social closure for the profession, and prosperity and strength for professional members across the continent.

Alter suggests that our organizations want to generate for themselves “sustainability equilibrium” using commercial methods to support socially important programs. They want to “do well by doing good.” Thus, in her typology, Alter suggests that the social enterprise has both social objectives and financial objectives, which co-exist. Coupled with this duality, there is another concept in her model: the blended value proposition. The hybrid model Alter proposes is, simply, a non-profit with income-generating activities. She points out that, “the defining characteristic is that an income-generating activity becomes a social enterprise when it is operated as business” (p. 10).

The hybrid model is also “mission-centric” in that its goals are embedded in its enterprise activities. In this model, our colleges can be classified based on the “level of integration between social programs and business activities” (p. 18). This structure, Alter argues, is designed “to protect against mission drift” and is characterized by synergy between the mission and the methods of enterprise.

Alter provides a variety of models within the category. For example, the model also contemplates a social enterprise in which the program of the organization is distinct from its business activities. In an attempt to include subsidiary organizations of a non-profit parent, Alter’s typology includes an “internal” version, a “separate entity” version and a “same entity” version. Our schools, at various stages in their history, have manifested each of these, beginning often as extensions of state or provincial associations and ending as separate entities, with much tension and turbulence along the way.

However, it is in Alter’s effort within her social enterprise typology to describe types of social enterprise ownership that the stubborn uniqueness of our schools shows. Naturopathic medical educational institutions are a type of non-profit cooperative. Alter explains that in non-profit cooperatives:

“… in practice, owners are ‘members’ of the non-profit cooperative and though they may have programmatic and business decision-making authority and realize certain advantages, they do not actually own the brand, infrastructure, assets, methodology, programs, revenue, etc., and do not enjoy private property ownership rights.” (Alter, 2004, p. 43)

… With a Little More Flexibility

Alter’s typology captures many aspects of the nature of our schools. Quarter et al. (2003), however, add to this framework by providing a somewhat more flexible typology, with whose elements of which we may find ourselves nodding in agreement. Explaining that “the social economy sometimes is used as a catch-all for organizations that are neither in the private sector nor public sectors” (p. 17), Quarter et al. discuss four “defining characteristics of social organizations”:

Start from a social purpose that ideally takes precedence over any commercial objectives
Physical assets are social property that is owned by no one
High level of volunteer participation
Venues for civic engagement, exhibiting a high level of democratic decision-making

(Quarter et al., 2003, p. 35).

Some naturopathic leaders have said that they wish we could be square pegs in square holes in the higher education sector. Processes of funding, research support and accreditation would be more seamless in such a world. However, as Lust put it so succinctly several generations back, “Our medicine and its pillars mark new territory and will for a long time coming” (Lust, 1921, p. 479).

David Schleich, PhD is president and CEO of NCNM, former president of Truestar Health, and former CEO and president of CCNM, where he served from 1996 to 2003. Other previous posts have included appointments as vice president academic of Niagara College, and administrative and teaching positions at St. Lawrence College, Swinburne University (Australia) and the University of Alberta. His academic credentials have been earned from the University of Western Ontario (BA), the University of Alberta (MA), Queen’s University (BEd) and the University of Toronto (PhD).

References

Salamon LM and Anheier HK: In Search of the Nonprofit Sector II: The Problem of Classification, Baltimore, 1992, Johns Hopkins University, Institute for Policy Studies, Center for Civil Society Studies.

Quarter J: Canada’s Social Economy: Co-Operatives, Non-Profits, and Other Community Enterprises, Toronto, 1992, James Lorimer & Company.

Quarter J et al: What Counts: Social Accounting for Nonprofits and Cooperatives, Upper Saddle River, 2003, Prentice-Hall.

Alter K: Social Enterprise Typology, Washington, D.C., 2004, Virtue Ventures LLC. (Updated version of Social Enterprise: A Typology of the Field Contextualized in Latin America, Washington, D.C., 2003, Inter-American Development Bank.

Lust B: History of the naturopathic movement, HHN 26:479-480, 1921.