Commercial: What kind of business?

Sam Wells in an extract from "A Future that’s Bigger than the Past: Catalysing Kingdom Communities", offers an explanation of positive, humble, constructive business pursued with an end beyond competition and efficiency: There are broadly three kinds of businesses available to congregations that wish to pursue commercial engagement in the spirit envisaged in this chapter.

  1. Instrumental. Undertake a legitimate trading activity that has no direct social impact, make a profit, and then transfer that profit to other activities that do have direct social impact, whether simply the sustainability of the congregation and its building, or such mission projects as it pursues.
  2. Exemplary. Undertake a trading activity that has no direct social impact, but seek to do so in an exemplary way, paying good wages, having a minimal environmental footprint, using locally generated resources, promoting fair trade practices, and so on, while still transferring profit to the activities mentioned under (1) above.
  3. Social. Undertake a trading activity whose profit return is evidently secondary to the indirect social impact sought.

In the instrumental approach, the aim is simply to generate funds – funds that in some congregations might be supplied by congregational stewardship, or conventional voluntary fundraising such as the parish fête or dinner and auction. A congregation might embark on such an enterprise if it had a building that had very high upkeep costs, for example a listed building or one in a poor state of repair, or if the congregation had ambitions to purchase a building or increase the size and/or broaden the use of their building. There is no social impact foreseen in the activity itself: any legitimate business proposition can suffice. Offering employment may be one among the ancillary social benefits, but such benefits are incidental to the central purpose of generating a profit; and that distinction is accentuated if the business is subcontracted to a third party and the staff members are not directly employed by the congregation or its commercial subsidiary. It is accentuated further if practices of staff members or operating methods of the enterprise differ in significant ways from the ethos of the congregation; it’s not hard, for example, to see a clash of views about the sale of alcohol if that were to be a primary form of income generation, or the appearance of books by the ‘new atheists’ if a bookstore were to be a part of the business.

When a congregation embarks on such an enterprise it makes two assumptions. One is that the venture will indeed make a profit. The other is that the profit will indeed be used to achieve the ministry or mission objectives envisaged, rather than, for example, be drawn upon to underwrite or invest in the business. In broad terms this approach is similar to the way a regular business disburses a proportion of its profit through its corporate social responsibility budget, how a foundation invests its endowment in financial markets, or how charities develop trading subsidiaries – thus the National Trust runs a large number of gift shops.

Turning to the exemplary approach, many of the same principles apply. The difference is that the congregation sees the enterprise not just as a cash cow to fund its ministry and mission, but as part of and in some cases integral to its ministry and mission. For that reason it accepts a lower financial return, because it regards some of what would have been profit as expenditure on ministry and mission. For example if it maintains a policy of paying an optional local minimum wage, or assigning more-than-statutory sick pay, or giving its staff other such benefits, it is setting the costs of being an exemplary employer against other ministry and mission projects that could have been funded with the same money. (This leaves aside the argument that paying better wages makes for happier staff and consequently increased profits; and also the PR value and thus potential financial benefit of being known as a good employer.) To make this step is to challenge the conventional understanding of ‘church’ in a way the first approach need not. For example, can it still be described as mission and ministry if many or most of the people employed by the business aren’t Christians? To answer ‘no’ to this question minimises the power of the Holy Spirit. The Christian story is full of examples of how the Holy Spirit inspires people to further the kingdom beyond the imagination of the church. It wouldn’t cross many Christians’ minds to suggest that Christian Aid isn’t doing mission, even though most people who work for Christian Aid worldwide aren’t Christians. Having an open recruitment policy invites into the community a wondrously diverse, extraordinarily committed, and endlessly fascinating body of people whose humility, hard work and integrity may well put the rest of the community to shame. The mistake is to concentrate on what perhaps isn’t there instead of seeing what abundantly is there. An opportunity could be missed to create a living example of creative and dynamic unity in diversity without uniformity or exclusion – exactly what the United Kingdom’s multicultural society as a whole is striving for.

In the social approach, the company has the appearance of a business, but the primary goal is to model the kingdom, by prioritising social means as well as social ends. Thus the business may make a priority of employing those who are rough sleepers, for example a bike repair workshop where those who are currently homeless can regain confidence and work once again within structures. Alternatively a venture may seek to train prisoners for work after their period of incarceration, perhaps as a chef or table attendant in a restaurant. For a congregation, this is simply mission; it doesn’t need and can seldom aspire to be income-generating to any significant degree: but its metrics are not those of a conventional profit and loss account. The most challenging thing for a congregation can be to be clear in its expectations: it’s not helpful to set up a business directed at raising profits, to hire staff equipped to do that and to market the venture accordingly, only for congregation members to lament that the business does not look like it’s taking the social approach – when that was never the intention. The problem is not the sordidness of all commercial enterprise: it’s about a failure to give clear instructions and set realistic expectations.

A subset of the social approach we might call the balanced approach.58 In the balanced approach, there’s no separation between the financial profits and the social impact. The two are of a piece. In many cases the company has to find a balance between generating financial returns and creating social impact. Examples include fair trade businesses and microfinance institutions: in such cases, the need to show a significant profit inevitably lessens the social benefit, at least in the short to medium term. A relatively unusual variant of this model is found where the financial returns and the social impact match each other. Examples include wind farms and organic vegetable box schemes. These are in many ways ideal social enterprises, because they both make a profit and have a significant social benefit, and the more benefit they generate the more profit they make. One can imagine that a clothing firm that pioneers the use of organic cotton is making a trade-off between financial and social returns. The firm could use non-organic cotton which would be cheaper, but less environmentally friendly (non-organic cotton crops represent one of the heaviest uses of pesticides in the world). Suppose, however, that the market eventually changes so that consumers end up preferring to buy only organic cotton clothing (and are prepared to pay more for it). In such a scenario, an ‘ethical’ clothing firm continues to use organic cotton and should make money by doing so.

In purely financial terms much the same things could be said of a congregation; the larger it gets, and in particular the more congregational giving it generates, the more it can do by way of ministry and mission. This is a crude form of measurement, but it is nonetheless the spoken or unspoken aspiration of most congregations.

An extract from "A Future that’s Bigger than the Past: Catalysing Kingdom Communities", available here.