Verifying Social Enterprises: Applying Lessons from the Fair Trade Movement
By Elizabeth Bennett
This chapter tells the story of Social Venture Partners of Rhode Island, a support organization for social enterprises. SVPRI’s stakeholders requested assistance in marketing and growth, and SVPRI and its consult- ing firm, New Commons, responded by developing a label that qualifying stakeholders could use to verify their work as a social enterprise. In prepa- ration for developing standards and creating a verification process for their label, the SVPRI/New Commons team convened stakeholder focus groups, researched extant social enterprise certifications, and studied the history of Fairtrade certification. This chapter describes these investi- gations, their findings, and the resulting Buy with HeartTM verification process. The authors posit that organizational form is irrelevant, and that – contrary to conventional theory and traditional practice – both for- and nonprofit social enterprises can be held to the same standards of prioritizing social impact. They also argue for peer-verified certifica- tion, as opposed to self-certifications, which lack accountability, or third- party auditing, which does less to foster a practitioners’ community. This chapter speaks to the literature on voluntary certifications, social enter- prise definition, and multi-stakeholder decision making.