Presentation by Eleanor Shaw to the Institute for Small Business and Entrepreneurship Special Interest Group Debate on the Big Society and Social Entrepreneruship & Philanthropy

1. Social enterprise &
philanthropy: their
role in the new Big
Society
Eleanor Shaw
Research team: Jillian Gordon,.
Professor Charles Harvey &
Professor Mairi Maclean

2. Big Society?
No accepted definition
• Give communities more power (planning reforms; transport implications).
• Devolution, smaller central government & public sector reform
(education, policing, health service).
• Social action: from passive to localised, collective citizenship &
volunteering.
• Support for coops, mutuals, charities & social enterprise: Big Society
bank.
www.shaw-trust.org.uk
• Publish government-held data statistics (focus on crime).

3. Specific focus on encouraging giving &
philanthropy.
On “empowering millions of public sector
workers to become their own boss”
(Cameron, 2010)
www.shaw-trust.org.uk

4. Criticisms
BS is about saving money: budget cuts coupled with focus on
volunteering & incentives based on results.
How can the 3rd sector & VCOs contribute more with less?
Clash with non-Conservative social & political traditions of 3rd sector
organisation?
BS Bank launched in April 2011 with just £60million.
Currently only 200 employee-owned organisations.

5. Observations
Entrepreneurs, entrepreneurship & social innovation are
largely absent from the BS discourse.
In fact surprising little discussion of the role of
individuals.
Concentration on implications for public & 3rd sectors.
English context & implications? www.shaw-trust.org.uk

6. Implications for
entrepreneurship &
philanthropy
Budget
cuts Rising public
More with less sector unemployment
Big Market Big Government Big Society
Gaps: creativity, individual, community, public sector & social entrepreneurship.
Social innovation.
From funding to financing & social investment: entrepreneurial philanthropists?
www.shaw-trust.org.uk

7. About our research project &
implications of this within the context
of the Big Society.
www.shaw-trust.org.uk

8. Objectives
Develop theoretical understanding of contemporary entrepreneurial
philanthropy: motivations; processes (how); where; with what impact (on
various stakeholders).
Critical consideration of the emerging phenomenon of entrepreneurial
philanthropy.
Consider the relevance of capital, agency & embeddedness for exploring
entrepreneurs’ entry into the field of philanthropy.
Analysis of the various forms of capital possessed by 100 entrepreneurial
philanthropists.
Contribute to discourse regarding the nature of entrepreneurship.

9. Why Entrepreneurial Philanthropy?
Changing socio-economic & political environments combined with the
emergence of a global economy and technological advances may have
encouraged emerging (new?) approaches to philanthropy.
Growing phenomena of:
 high net worth individuals, typically entrepreneurs, engaging in the
active re-distribution of their wealth: 1st time ever more money given
philanthropically while still alive.
 organisations with a strong commitment to CSR are investing in
increasingly sophisticated mechanisms & structures to support this
commitment & the redistribution of organisational wealth.
www.shaw-trust.org.uk

10. Facts about Philanthropy & Giving
 UK giving amounts to around £16.3 billion per year & stems from 3
key sources: individuals, charities & organisations.
 Boosted by the contribution of large gifts by wealthy individual
donors (typically entrepreneurs).
 Multiple stakeholders have vested interests in supporting,
encouraging and engaging with philanthropy including
entrepreneurial philanthropy: charities, third sector, government,
(BS), intermediary organisations, wealth advisors.www.shaw-trust.org.uk

11. Wealth Creation, Entrepreneurs &
Philanthropy
Many contemporary high net worth individuals are entrepreneurs.
Studies of wealthy households typically find a “tight relationship between being an
‘entrepreneur’ and being rich” (Cagetti and De Nardi, 2006:838).
The wealthiest households are more likely to comprise entrepreneurs than employees:
over 80% of the top 1% wealthiest households are classified as entrepreneurs.
Entrepreneurs tend to be richer than non-entrepreneurs (Cagetti and De Nardi, 2006).
69% of the UK’s 100 biggest givers are self made millionaires.
Research has shown that the wealthy are more likely than the non-wealthy to become
entrepreneurs (Quadrini, 2000; Nanda, 2008). www.shaw-trust.org.uk

12. Entrepreneurial Philanthropists & Wealth
Greater wealth of entrepreneurs is a result of different patterns of
accumulation & higher levels of savings (Quadrini, 2000; Bradford, 2003;
Cagetti and De Nardi, 2006).
Lump sum payments, e.g. annual shareholder dividends, are more likely to
occur within entrepreneurial households.
Thus, successful entrepreneurs may have access to potentially large lump
sums on a reasonably regular basis.
Contemporary high net worth entrepreneurs possess significant amounts of
personal wealth; most of which is self made: see Forbes and Sunday Times
Rich and Giving Lists.
www.shaw-trust.org.uk

13. Nature of (new) Entrepreneurial Philanthropy
Involves more than large gifts.
Active investment of economic, social, human & symbolic capital for social
change.
Active redistribution of their wealth.
Use of variety of vehicles: foundations, venture funds, pooling of resources.
Stipulation of performance indicators (double or triple bottom line?)
Identifiable exit strategy (money no longer needed); desire for sustainability.
Involves risk taking.
‘Productivity revolution’ in philanthropy: by applying their knowledge and skills
from business to create sustainable change within traditionally non profit sectors
(Bishop, 2006)
www.shaw-trust.org.uk
Shapes social and government agendas?

14. Observations on existing research
Largely US based (Schervish)
Little empirical UK evidence.
Much anecdotal & media interest encouraged by high net worth
celebrities and entrepreneurs with celebrity-like status.
Concentration on motivations, influences, typologies & decision
making processes have received most attention (Supphellen
and Nelson, 2001; Brady et al., 2002 Lloyd, 2004; Gordon
forthcoming).
www.shaw-trust.org.uk

15. Observations...
Recognition of link between families, family firms and entrepreneurial
philanthropy (Lloyd, 2004; Pharaoh, 2009; Breeze, 2009).
Little theoretical development or contextualisation of research.
Problems with access, samples and methodologies.
Few critical considerations: impact on entrepreneur? Impact on social
change agenda? Impact on recipients, beneficiaries, clients?
Very typical of an area at an embryonic stage of academic research.

16. Research Gaps
Multiple influences on entrepreneurial giving: wealth accumulation, patterns of
saving, vast quantities of personal wealth, family, gender, faith & household
influences & considerations, wealth advisors etc.
Critical consideration of the impact of entrepreneurial philanthropy on:
entrepreneurs, social change agendas, social change agents, those in receipt of
their investment, government policy (domestic & international).
Entrepreneurial philanthropists, social entrepreneurs, social enterprises & social
innovation.
Theory development.
Robust methodologies to uncover motivations and decision making processes e.g.
www.shaw-trust.org.uk
life story interviewing, rep grid.

17. Theoretical
Framework
Entrepreneurship Philanthropy
Symbolic
Entrepreneurial Symbolic
Capital Philanthropic
Capital
Social
Capital Social
Capital
Human/
Economic Human/
Cultural Economic
Capital Cultural
Capital Capital
Capital
www.shaw-trust.org.uk

18. Research Phases
1. Developing a comprehensive database of secondary
information regarding high net worth entrepreneurial
philanthropists engaged in entrepreneurial philanthropy
2008-11 having redistributed £1mn min + min personal
wealth of £10 million
2. Collect detailed data regarding all aspects of their
entrepreneurial capital, wealth accumulation and wealth
redistribution.
3. Analysis of data to explore patterns, clusters, similarities,
differences and outliers in entrepreneurial philanthropy in
www.shaw-trust.org.uk
the UK.

19. 6%
inherited
wealth;
average
wealth,
High levels £268million
institutional 88% men
cultural capital
Concentration of
political &
philanthropic
Redistribution contacts ; high
concentrated levels of symbolic 39%
in young capital serial/portfolio
people & entrepreneurs
children
59% have
philanthropy 10% < 45;
vehicle; 16 57% 46-
established 65; 23%
prior to 2000 65+
(new?
evolving?)

20. Implications
Entrepreneurial philanthropists may be able to play a key role in the
BS:
• Providing social investment
• Providing significant human, social & symbolic capital.
But, implications of a government-led approach to economic and
social prosperity? Desire to shape rather than implement policy.
Implications of global agendas for sustainable economic
development through social innovation & change? www.shaw-trust.org.uk