Introduction
Social Entrepreneurship as a Collective, Participatory Organizing Process
Method
Setting
Data Collection
Case | Founded | Location | Interviews | Archival materials | Meeting observation |
---|---|---|---|---|---|
1 | 2008 | South | 12 | Internal reports (2) Bylaws and website Media articles (21) | |
2 | 2013 | West | 7 | Bylaws and website Business plan Media articles (4) | ✓ |
3 | 2010 | Center | 8 | Internal reports (2) Project brochures (11) Bylaws and website Media articles (34) | ✓ |
4 | 2009 | South | 10 | Presentations (3) Project brochures (3) Bylaws and website Media articles (26) | ✓ |
5 | 2011 | East | 10 | Internal report (1) Presentations (3) Bylaws and website Media articles (3) | |
6 | 2004 | North | 11 | Internal report (1) Presentations (3) Bylaws and website Media articles (124) | ✓ |
7 | 2006 | North | 11 | Bylaws and website Media articles (47) | |
8 | 2010 | Center | 8 | Presentations (2) Bylaws & website Media articles (5) | |
Field level
| 7 | Cooperative association RESCoop brochures (11) Population survey reports (5) Association websites (6) Position papers (20) Media articles (3447) |
Data Analysis
Logic element | Community logic | Environmental logic | Commercial logic |
---|---|---|---|
Organizational mission
| Support local welfare | Protect the environment | Generate dividends |
Associated organizing model | Charity | Environmental NGO | Business |
Values embraced by RESCoop members
| Solidarity Mutual support and self-help | Intrinsic value of nature Intergenerational justice (in using environmental resources) | Return maximization Economy in operations |
Prescriptions for RESCoop activities
| Creating local jobs Sourcing locally Fostering community | Reducing green-house gas emissions Providing educational programs and energy audits Raising awareness of environmental issues | Exploring profitable investment projects Securing resources Minimizing costs, maximizing revenues |
Findings: Generating and Sustaining Participation in Collective Social Entrepreneurship
Facing Divergent Value Priorities
Agreement on a Triple Bottom Line
Private citizens and local organizations who became members and invested in the RESCoops tended to agree on the desirability of this tripartite mission. In fact, this triple bottom line positioning was often what initially attracted members to RESCoops rather than other forms of investment in the RE sector. Members tended to be well versed in the three logics their organization sought to combine, valued these logics, and believed in their potential compatibility. As one member explained when discussing his expectations and reasons for joining:The [RESCoop] aims to offer citizens of the region an opportunity to actively contribute to a sustainable and decentralized energy supply by participating in our venture… This citizen activism will directly contribute to a climate and energy future that will protect the environment for future generations, develop our region, and benefit local inhabitants by allowing them to share in value creation. [Website, Case 2]
General agreement on the importance of a triple bottom line united members, setting RESCoops apart from large utility companies and profit-driven RE project developers. Table 3 provides additional illustrative examples of members’ commitment to a tripartite mission.We want to show that renewable energies are beyond mere eco and idealist projects, that they can also make economic sense. That is the core of the venture – you can make money with such projects and protect the environment and do something for the community. [Member, Case 3]
Empirical themes | Data excerpts |
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Agreement on a triple bottom line
| Ecological thinking is only possible if I put economic thinking with it. I cannot always run a green operation that makes losses. That will fail, so I need to blend both things. I personally am a Green [but] business is business. That also has to work out… You just have to use the things that you have innovatively. And the third premise is to be self-sustaining, to support local structures as much as possible. That means to source from local farmers, to create jobs locally. That means developing the region… We always have to think of these things together. [Member, Case 7] The aim that I think all our members support, is that we want to have an energy supply that is economical and environmentally friendly [and] our activity should benefit the region… That means it’s about multiple things simultaneously. It is environmental protection… The financial side also has to work… And we of course care about the local community. [Leader member, Case 2] |
Individual differences in value priorities
| We have roughly three camps in our RESCoop. One is this ‘Fukushima-Faction’ of people who said after that shock ‘I want to realize my personal energy transition with my investment and let my money work for something good, not just have it in the bank… I want to be part of the [green] solution.’ That is one group. The second group is people who find the cooperative ideal intriguing—self-help for [the region], the community ideal, doing something constructive together. That is the second camp. And the third is people who are really looking for an investment, clean and regional, yes, but still very much a financial investment… I wouldn’t say we have 640 altruists here who are all directly descending from Mother Theresa. That is definitely not the case. (Laughs) [Leader member, Case 3] Members of the cooperative naturally have an expectation of a return on their investments. That should also be the primary aim [of the RESCoop]… But right after that, I think, is this point to replace fossil energies with renewable energy production. And it should be a local project—not buying eco-power from Norway or something. The PV-installation is here on a roof and the first 50% or so of that electricity is consumed in that building.… I’d say that should be the secondary aims. [Member, Case 5] |
The emergence of value tensions
| Let’s say I want to realize a photovoltaic installation on the local kindergarten roof, because I want the kids to see how that works… how green energy is created. That will only yield 2% p.a. return, though. At the same time, I could build other installations that would yield 6% p.a. in the same time frame. How do I communicate to people that the 6% will be brought down by the installation on the kindergarten? [Leader member, Case 4] At one of the general assemblies last year, we discussed contributing to wind power projects… For me, I would only have seen that realized with a heavy heart…I would have had an uneasy feeling, because it would have been a good wind plot, but I would have thought: It’d be nicer if it could be realized in the region rather than in this area, which is a few hundred kilometers off. [Member, Case 5] |
Individual Differences in Value Priorities
Such equitable attention to two out of the three logics influencing RESCoops was not very common in our data, however. Most members articulated a clear priority for values associated with one logic and described the others as secondary or tertiary to them personally. We describe these differences in priority orderings below and provide additional examples in Table 3.I do want my investment not to go down in value and I expect a certain return, but two other issues are clearly in the foreground for me… the ecological ideal – that I want to try to really use the most ecologically friendly energy source – and this ideal of citizens working together to benefit our region. [Member, Case 5]
In the extreme, a few interviewees who prioritized community values described financial returns as irrelevant to their participation in the RESCoop and environmental concerns as secondary:There is this principle of creating jobs locally and supporting the farmers and tradespeople in our village. That is the idea of [this RESCoop], that you support the region, the people who live here, the tradespeople who offer their services here. That is what I like about it. [Member, Case 7]
To me it’s not about the financial [dividend]. I don’t say: ‘I want to make profit.’ It is really just this idealistic idea… to support regional activities, to strengthen the region… because I find this goal of regional energy supply important and forward-looking, ideally of course using renewable energy sources… I see the money [I invested] largely as a donation. [Member, Case 5]
These members prioritized values associated with an institutional logic of environmental protection, such as the intrinsic value of nature and intergenerational justice in the use of environmental resources. Many environmentally-minded members articulated the ethical responsibility they felt towards the environment and future generations. For example:I am really in it for the ecology. Considering biogas plants, I get sick… Mono-cropping on the fields… really has nothing to do with ecology anymore. That has everything to do with making money!… I am absolutely against the construction of further biogas plants. [Member, Case 5]
For these members, climate action and the construction of new energy supply infrastructure in the most environmentally friendly way possible were more important than maximizing annual dividends or having the biggest possible impact on regional development.We have to start. We simply have to start. We must not say: ‘This little bit that I emit doesn’t do any damage.’ Everything contributes. We have to think about… future generations. They also want to live in a safe environment! [Member, Case 4]
These commercially-minded members were most interested in stable returns on their investments, giving primacy to the values of return maximization and economy in operations associated with the commercial logic. Commercially minded members were thus supporters of the most cost-effective and highest yield RE projects. To realize these objectives, they were willing to place relatively less importance on community and environmental concerns.First and foremost, it is an acceptable investment option. It yields a decent dividend… With the recent low interest rates on saving accounts, this is quite an acceptable alternative. I think they manage frugally. [Member, Case 5]
Similarly, survey research on RESCoops conducted in Belgium noted “significant differences in preferences and interests across categories of members,” with considerable heterogeneity in profit, environmental, and social orientations of members (Bauwens 2016, p. 287).Municipal representatives are always focused on the regional benefit: ‘Everything that is being realized has to benefit the region.’ For the environmental organizations, climate change and the ecological aspects naturally take center stage. And for those people who have some money, when it comes down to it, they are neither truly interested in regional benefit nor in climate change. […] When a bank, even the local cooperative bank, joins, then they definitely have an economic orientation. Money becomes very important. [Cooperative association counselor]
The Emergence of Value Tensions
In another case, a RESCoop supervisory board member described tensions in project location choices, particularly for green-field solar and wind turbine projects:We saw tensions arising around the topic of biogas… There are many ideological disagreements that bubble up, things like… how much mono-cropping in corn, appropriate fertilizer use. So, a lot of issues where some people are saying: That’s problematic. [Leader member, Case 3]
Table 3 includes additional illustrative data on value tensions, and Table 4 offers a summary of trade-offs and associated value tensions by type of RE project.Not every site is equally good. Can I do it here or do I have to go outside the region a bit? What about [the cost implications of] environmental protection? Because the more I have to invest, the smaller the return. I have to conciliate that somehow. I always have in mind that we have basically promised our members not to go much below a return of 3% p.a. So we have to see how big the return will be, and how can we get that return for our members so they will stay happy, because not all of them are doing it just for the environment or regional benefit. [Leader member, Case 1]
Strategies for Managing Members’ Divergent Value Priorities
Temporal compromise strategy
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In Case 2, the nascent RESCoop had realized two solar installations on roofs—one on a local school and another at a communal waste-water treatment plant. While the latter was economically less attractive than the former, possibly reducing the overall portfolio return, it was realized to satisfy the interests of different local communities involved in the RESCoop. The RESCoop’s leadership promised that the negative impact on overall profitability would be compensated in the future through a planned biomass project. “While the [waste-water solar] project won’t really have much of an impact [financially] because of its size – only 15 kWp is being installed on that roof… we undertook this project to show that we are doing something in [village name]. There is some tension in the relationship between that village and the town. They always argue that everything is happening [in the town]. So we said, okay let us realize this second project in [village name]… Especially now that we are working on the remote heating project in [the town].” [Leader member, Case 2] |
Structural compromise strategy
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In Case 4, the initiator of the RESCoop explained: “Imagine you have a super roof, facing South with an ideal angle, and you can reach six or eight percent annual return on your investment… And then you have a kindergarten, where you would also like to install solar [but] on a West or East facing roof. Projected return: four percent. Then everyone who invested in the eight percent project… would say: ‘We won’t let you ruin our portfolio return. I invested because of the eight percent… I only want to take [economically] better or similar projects.’ So, we developed a concept which can separate projects within the same cooperative structure.” [Leader member, Case 4] Using the specialized loan vehicle of “Nachrangdarlehen,” the RESCoop has realized projects with a broad range of different priorities. Solar power projects have been realized with modest financial returns because they also benefited the local kindergarten and soccer club. At the same time, considerably more profitable solar units have also been installed. Moreover, the RESCoop has realized a local biomass powered heating grid and associated biogas plant. |
Collaborative compromise strategy
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In Case 7, despite the heterogeneous backgrounds and preferences of the RESCoop members and its leadership in particular, a common consensus emerged that projects would only be realized if they generated benefit on multiple dimensions of the organization’s mission, prioritized by different sub-groups. Using this approach, the RESCoop realized a biomass-powered heating grid in its community and was considering working with a local university to research flowers as part of their biomass use. As one director explained: “We are supporting every effort to cultivate plants that optimize our biogas fermenter… For example, plants that take up all the trace elements from the soil that are currently missing in our fermentation biology… And they even look great, they flower very nicely, absolutely enriching flora and fauna… That is just one example of what we do. With that we are pretty close. And so I repeat: economic profitability is an important goal but ecologically sensible measures can be very economical, too. That is no contradiction for me. These maxims always stand side by side for us.” [Leader member, Case 7] |
Temporal Compromise
To symbolically emphasize its commitment to community development, the RESCoop even chose its name to match the acronym on the local license plate. Yet while it emphasized the local community, the RESCoop attracted over 13 million euros of investments from private individuals, many of whom saw it first and foremost as an “acceptable investment alternative.” To balance its members’ divergent value priorities, this RESCoop realized a mix of projects over time. Seeking to benefit all the local municipalities involved, it undertook solar projects on public buildings in every town, but it sequentially interspersed these low-return projects with more profitable green-field photovoltaic parks. As another supervisory board member explained:We want to generate the energy that we need in our own region.… Environmental protection, local patriotism, and of course value creation for our region – those three things are extremely important to us! Because we want to keep the money that our region [spends on energy consumption] in our region. [Leader member, Case 1]
Smaller solar projects tend not to be quite as profitable, but we have decided that in each municipality we should have at least one solar installation on the roof of a public building… In larger [green-field] solar projects we therefore pay more attention to returns. [Leader member, Case 1]
We realized [the project] outside the region in the legal structure of a Limited… The advantage is that as soon as we have a wind or solar power project ready in our region, we can simply sell [the Limited]. You can sell it more easily than having to sell a part of a cooperative… This compromise satisfied most sceptics. [Leader member, Case 1]
Structural Compromise
A specialty of this RESCoop is that the projects are not in one big pot with a dividend that trickles out in the end. Instead, you are invested in one specific project. You can explicitly choose a project… The capitalist would say: ‘I’ll participate in the project with the biggest return.’ But one can also participate in a project that is close by – it may not have quite the best return because it doesn’t have quite as much wind or sun, but it may be much stronger on idealistic criteria [such as supporting the local community]. For example, when we put solar panels on a kindergarten, then there are of course idealistic aspects…We can support the kindergarten with cheaper electricity and also realize other idealistic goals [such as awareness raising for climate change mitigation]… I am really happy that citizens’ capital, like mine, can be used to realize such projects. [Member, Case 3]
The structural compromise strategy thus functions by directing members’ investments to specific projects that deliver on their personal value priorities. Heterogeneous member preferences are thus more or less directly reflected in the project range of the RESCoop at any given point in time.Usually, we have projects with more than three percent return, [but we also have] idealist projects. For example, for hydropower we’ll do it if it only breaks even, as long as we have members to invest in the project. That is the benefit of our system, that you can realize [commercially] weaker projects without dragging the portfolio down. If you don’t separate projects out, you would have discussions: ‘This really pays [but] you did this hydro-project and that barely breaks even.’ We don’t need to have these kinds of arguments. If we find people for projects [with a strong environmental benefit but low financial return], we do realize them. That is our principle. [Leader member, Case 3]
Collaborative Compromise
Such discussions were facilitated by the cooperatives’ democratic structure and the principle of “one person, one vote.” These features allowed all members to have a voice in the collaborative search for an acceptable value consensus irrespective of their individual equity share and thereby helped resolve controversies and maintain member support. As a director in Case 5 explained:We put this on the meeting agendas, so that everyone knows we are not just reviewing numbers but actually discussing basic principles… And we note all the wishes of the members and then vote on the [criteria], developing a basic shared understanding… Even those who may originally say ‘no’ to a project can live with it when they learn that all the [criteria] are met. [Leader member, Case 5]
Collaborative compromise thus functions by jointly and democratically creating consensus on how to uphold the collectives’ values when trade-offs occur in project decisions. It relies on members’ willingness to participate in discussions and to defer to majority decisions when necessary. It is thus focused on discovering or building value consensus among members, made concrete in explicit minimum criteria for acceptable RE project characteristics.In our cooperative each member has one vote, no matter whether he has one share or twenty. Each person has one vote and can thus influence the direction of activities in our general assembly. Last year, for example, we deliberately discussed wind power and we had a pretty diverse range of opinions. One said: ‘Anything that isn’t nuclear power is helpful.’ Another said: ‘I deliberately invested here because I do not want ugly wind mills here in our region.’ Others had more nuanced opinions, saying: ‘Okay under certain circumstances—not close to residential areas, not in the forest’… And so in the end we decided on certain criteria under which we would consider a project. [Leader member, Case 5]
Towards a Comparative Framework of Compromise Strategies
Member Participation and Growth Trajectories
To date, we have really not had any major conflicts occur… There is one RESCoop where there is some friction at the moment. There are disagreements between business and civic members of the cooperative, and this has led to veritable arguments. But that is very unusual. [Cooperative association counselor]
Case 1 | Case 2 | Case 3 | Case 4 | Case 5 | Case 6 | Case 7 | Case 8 | |
---|---|---|---|---|---|---|---|---|
Strategy adopted
| ||||||||
Primary | TC | TC | SC | SC | CC | CC | CC | CC |
Secondary | CC | CC | TC | |||||
Number and type of projects realized
| ||||||||
Solar on roof | 10 | 3 | 10 | 3 | 3 | 1 | ||
Solar green-field park | 4 | |||||||
Wind | Planned | 4 | Missed | |||||
Hydro | Planned | |||||||
Biomass | Planned | 1 | 1 | Failed | 1 | 1 | 1 | |
Size and age
| ||||||||
Age (years) | 7 | 1.5 | 5 | 6 | 4 | 11 | 9 | 5.5 |
Total equity (in million) | 13.00 | 0.07 | 4.60 | 0.95 | 0.20 | 1.00 | 1.80 | 1.10 |
# Members | 1300 | 41 | 460 | 165 | 35 | 195 | 215 | 200 |
Distinct Mechanisms for Justifying Value Concessions
Strategy characteristic | Temporal compromise | Structural compromise | Collaborative compromise |
---|---|---|---|
Compromise principle
| Oscillate between values over time | Self-select into projects with associated value priorities | Build consensus on acceptable value trade-offs |
Justification of value concessions
| Transitory | Not needed | Shared responsibility |
Approach to logic incompatibilities
| Deferred | Avoided | Explicitly discussed |
Implications for growth
| Ease of integrating new members and raising equity Potential for fast investment expansion | Critical mass of members needed for each project independently Wide variety of projects possible | Increasing complexity in adding new members Time-intensive decision-making processes |
Compromising ones’ value priorities could be justified by each member as only transitory. This requires, however, that the individual member continued to believe in the overall balanced orientation of the organization and trusted in promised recompense. Temporal compromise thereby defers acknowledgement of potential incompatibilities between the institutional logics espoused by the social enterprise ad infinitum. As long as the RESCoops adopting temporal compromise could credibly assure members of continued oscillation, value tensions did not have to be resolved. In consequence, these RESCoops gained flexibility for organizational growth. Perpetuating the premise of a synergistic triple bottom line, a RESCoop could relatively easily increase its investment capacity by admitting new members or allowing re-investments of extant members at any time. From this pool, leaders could invest in emerging RE project opportunities as long as they credibly signaled that future projects would attend to values not prioritized in the present.We accept… that the dividends have to be a bit lower for a while if the municipality is using it to do something for the community with it… I have heard that [the RESCoop portfolio] is a very solid [investment] nonetheless. I have just talked with the former mayor, who we know well, and I trust his word. [Member, Case 1]
As long as the RESCoop found members who subscribed to this premise, it could avoid value tensions in project decisions and gain flexibility in project range, as any project with sufficient investors could be realized. This project-bound investment model could also slow growth, however, because projects had to be clearly specified before investments could be solicited, and they could only be realized if a sufficient number of like-minded members came together to fund them.Well, I am always watching for whether it still fits or whether some [mission components] win out over others… I am not anticipating that will be the case or that I would have to withdraw my support from our RESCoop. I think this model [of everyone choosing their own project to support] is very stable… I get what I sign up for and others do too. [Member, Case 3]
To justify compromising their personal value priorities in such joint decision-making processes, members diffused ethical responsibility to the group, thereby rendering value concessions more acceptable to them personally. Collaborative compromise thus entails explicitly acknowledging the potential for incompatibilities between the logics espoused by the RESCoop and jointly, in dialogue and through democratic decision-making, finding acceptable truces. If the RESCoop succeeded in developing a culture of active debate focused on collaborative problem solving, value tensions could be satisfactorily resolved for those involved in the process. Yet incorporating new members was increasingly difficult, as newcomers had to subscribe to the organization’s established value consensus and minimum project criteria. This in turn limited the ability to grow through new investments. The process also entailed potentially long discussions and extended decision-making processes, making it more difficult to realize growth.What would happen? I could not oppose it in the cooperative anymore. That is simply a democratic principle, that I don’t petulantly say: ‘Okay, that’s it, I am leaving!’… Instead, I’ll stay in the cooperative. [The decision] is legitimate. So I’ll say: ‘I am still opposed, but okay.’ And I will just try to continue to convince others that the criterion is nonsense. [Member, Case 5].