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SEJ
6,3 The social economy of trust:
social entrepreneurship
experiences in Poland
194
Timothy Curtis
University of Northampton, Northampton, UK, and
Jan Herbst and Marta Gumkovska
Stowarzyszenie Klon/Jawor, Warsaw, Poland

Abstract
Purpose – The purpose of this paper is to explore the notion, and dynamics, of trust between social
enterprises and the public sector in two different cultural contexts. The strategy was to ask very
simple and broad questions of a number of people in the social enterprise/public sector nexus, and
allow them to talk. This talk was recorded and analysed for patterns and insights. This paper looks in
detail at one of the insights derived from this wealth of data and makes a startling claim, one that
needs further investigation and thought, that in social enterprises, trust precedes performance.
Design/methodology/approach – The research is based on grounded theory and comprises a
series of semi-structured interviews based on a common framework undertaken in two countries – the
UK and Poland. The interviews were transcribed and then coded by the two teams independently and
key insights recorded.
Findings – The research indicated an unsolicited pre-occupation with trust relationships between the
social enterprises and the public sector organisations. The research suggests that trust precedes
performance, in that the public sector partner extended a trust relationship before the organisation was
able to demonstrate their track record. This challenges EU public procurement rules which require
that an organisation demonstrates competency and track record before a contract is let.
Research limitations/implications – Grounded theory by necessity provides insights on which to
build theory rather than to prove theory. This research project did not have the resources to develop a
questionnaire that could indicate whether the findings are wide spread and therefore robust.
Practical implications – Trust is an under-theorised resource in the literature on social capital.
This research begins to conceptualise trust as an essential resource for social enterprises in the startup,
and may prompt social enterprise practitioners to consider trust as a non-financial resource in their
business planning. The insights derived from this field provide some notes of guidance to public sector
agents working with social entrepreneurs to understand the trust resources required, and the limits to
that trust, and the impact of bureaucratisation on the socially entrepreneurial startup.
Originality/value – This paper builds on existing literature on social capital and inter-organisational
trust but extends it in a unique manner to the body of social entrepreneurship literature.
Keywords Trust, Social capital, Non-profit organizations, Public sector organizations, United Kingdom,
Poland
Paper type Research paper

How selfish soever man may be supposed, there are evidently some principles in his nature,
which interests him in the fortunes of others (Adam Smith, 1759, The Theory of Moral
Sentiments, p. 1).
Social Enterprise Journal
Vol. 6 No. 3, 2010
pp. 194-209 Introduction
q Emerald Group Publishing Limited Sometimes, when you are not looking, something interesting is discovered. Granted, in
1750-8614
DOI 10.1108/17508611011088805 the research paper, the authors were looking for something, but precisely what was to
be discovered was not clearly defined. This is the nature, risk and excitement of Social economy
grounded theory (Glaser, 1992) research. The objective of this research was not to find of trust
something specific, but to allow the real-lived experience speak. The risk lies in the very
real possibility that nothing interesting is discovered, but the excitement lies in the
hints of new insight on which other researchers may build. This paper explores the
notion, and dynamics, of trust between social enterprises and the public sector in two
different cultural contexts. The strategy was to ask very simple and broad questions of 195
a number of people in the social enterprise/public sector nexus, and allow them to talk.
This talk was recorded and analysed for patterns and insights. This paper looks in
detail at one of the insights derived from this wealth of data and makes a startling
claim, one that needs further investigation, that in social entrepreneurship, trust
precedes performance.
Arthur et al. (2006) asked “what is social about social enterprise?” thereby
crystallising discussions and debate that had been going on in conferences and e-mail
discussions about the social aspects of the nature of social entrepreneurship. This
represents a different strand of theory from the more managerial approach to the topic
which privileges “business-like” practices (Dart, 2004; Pharoah, 1999; Pharoah and
Scott, 2004) and “managerialism” (Turnbull, 1995; Terry, 1998; Hulgard and Spear,
2006), over mutuality, community, togetherness and trust (Bull, 2008).
In exploring trust, the paper explores a fundamental social relationship with
social entrepreneurs that stand apart from their contractual and financial relationships.
In exploring the notion of trust as a resource (an unlimited one) that is endowed, or
entrusted, to another regardless of their ownership or control over other forms of
resource, like money, this paper explores the contribution of a resource that is utilised
by emerging social entrepreneurs. It seems to be a resource that is much neglected and
undertheorised. Qianhong (2004) notes that Gambetta (1988, p. ii), for example, has
argued that scholars tend to mention trust, to allude to it as a fundamental ingredient or
lubricant, an unavoidable dimension of social interaction, only to move on to deal with
less intractable matters. Likewise, Qianhong (2004) shows that Luhmann (1988)
contends that trust has never been a topic of mainstream sociology.

Trust
The role of trust in business formation (Sharif et al., 2005), marketing (Mouzas et al.,
2007), contracting (Darwin et al., 2000), internationalisation (Heffernan, 2004) and
entrepreneurship (Granovetter, 1983, 1985) fields has grown significantly in the last few
decades. Although the term trust is employed in this paper, other related terms indicate
the breadth, and divergent interests and application, of a recognition that business is
not just the sum of production figures and contractual documents. Concepts such as
Granovetter’s (1973) “social embeddedness” and “social capital” theorised by Bourdieu
(1972) and popularised by Putnam (2000) relate to the extent to which individuals trust
one another, and in what configurations. For Granovetter, the power of the connections
between people lie in clumps of tightly bound social networks that are bound together
by weak links between inhabitants of each group. The individuals at the ends of each
weak link between the groups are referred to in social network literature as “boundary
spanners” (Williams, 2002). Granovetter (1983) does not call the ties “trust”, instead he
refers to communications, links and information flows. Where he does deal with trust,
he assumes that trust arises from the communications flows, whereas one might
SEJ suggest that trust is essential to the initiation and maintenance of such information
6,3 flows that constitute weak and strong ties.
Social capital on the other hand, relates to the sum total of ties, weak and strong, that
might be possessed, increased and invested in, by an individual, network or community.
Bourdieu distinguishes social capital from the more familiar economic capital and treats
it as an intangible resource that can be increased, or can decline. He also suggests that
196 social capital can be turned into other forms of capital (Bourdieu, 1986) but does not
explain how this occurs before the endowment of trust, limiting his comments to the
post-trust event and the “nonspecific indebtedness which is called gratitude”. Coleman
(1988), however, identified social capital as networks of relationships, reciprocity, trust
and social norms but it appears that greater emphasis is placed on social capital as an
enforceable trust or social control mechanism to prevent malfeasance (Portes, 1998).
If one were to compare the differences in these terms to economic terminology, social
capital relates to money/currency, whereas the ties to the flows of money between
individuals. Social embeddedness relates to the necessity of money as a means of
exchange, whereas trust would perhaps relate to the means of production of money.
The ability to create social capital and the conditions required to initiate the capture or,
and growth in, social capital through manipulation of social ties and networks are
intrinsically based on a notion of trust.
Sako (1992) identified three components of trust: competency trust, contractual trust
and goodwill trust. Competency trust refers to the “skills, competencies, and
characteristics that enable a party to have influence within some specific domain”
(Mayer et al., 1995, p. 717), in other words, the demonstrated trustworthiness of a
partner to perform as expected. This is a trust that is entirely based on prior experience.
Contractual trust, on the other hand, refers to each partner adhering to specific written
or oral agreements. In a way, contractual trust requires competency trust as a
pre-requisite – a partners needs to have demonstrated an ability to perform an expected
action, and the contract secures and builds on that a priori trust/further, contractual
trust is shown when partners uphold an ethical standard, namely that of keeping
promises (Sako, 1992). Goodwill trust refers to a willingness to do more than is formally
expected. Indeed, goodwill trust can be defined as a behaviour from one partner to place
the other partner’s interest ahead of their own (Sako, 1992) in other words to
over-perform on a contract. In this instance, the trusted partner behaves in a
predictable, i.e. trustworthy manner, because the partner is aware that the trusting
person is relying on that predictable behaviour.
Whilst the literature identifies five phases of the trust life cycle – pre-relationship, early
interaction, relationship growth, partnership and relationship end stage (Heffernan, 2004) –
this paper explores the early antecedents of the trust relationship, essentially seeking
to answer the specific question: “what causes a public servant to trust a nascent social
entrepreneur?” Addressing this question could shed light on the wider question of what
causes any principal to trust an agent. The difference in this context of social
entrepreneurship is the role of the social justice outcome that is being considered. In the
latter question, if in the context of a business relationship, the relationship is considered to
be ethically neutral, whereas within the social entrepreneurship, the relationship is
considered to be motivated by some form of social transformation (Martin and Osberg,
2007, pp. 34-5).
Background to the research Social economy
The research underlying this paper results from collaboration, extending over
two-and-half years up to December 2008, between researchers in the UK, Poland and
of trust
Italy on the subject of social enterprise startups. The collaboration was funded by EU
EQUAL funding within the “third angle” transnational partnership. The transnational
team established that an exchange of experience and development of a common research
methodology was highly advantageous. This was particularly pertinent as both Italy 197
and the UK had already embarked on qualitative research methodologies in their own
national partnerships and the Polish team were keen to develop their existing experience
in quantitative and descriptive research into more interpretative analysis. The large
datasets that they had been working with in Poland raised a number of interpretative
questions, which lent themselves to qualitative analysis.

Background to the methodological partnership

The methodological approach was developed in order to:
.
support the Polish team in their understanding and experience of qualitative
research;
. link with the existing the UK and Italian research methods and questions; and
. create a workable connection between the research interests of each partner.

The Italian National Research Programme was an investigation of the role of

“incubator” support services in the development of the social economy, whereas the UK
National Research Programme was focussed on the role of the public sector in
developing new social enterprises. On the other hand, the Polish research was aimed at
developing a better understanding of what a model of social economy in Poland might
entail and how it might be different from existing European or North American
models.
The Polish method was initially based on an extensive and detailed questionnaire to
thousands of social economy organisations (including social enterprises) to provide a
statistical view of the state of the social economy. On the other hand, the UK and Polish
National Research Programmes were based on longitudinal participant observation and
in-depth semi-structured interviews with a small number of respondents. In order to
develop some common ground, and to support the Polish team in engaging with
qualitative methodologies, the teams met in the Skoll Centre for Social Entrepreneurship,
University of Oxford, UK in March 2006 to discuss a detailed forward plan.
At the meeting, the UK team reviewed the methodology of their research process,
explaining the process and workload implications for field observations and
interviewing. The team considered the emerging observations that the UK had made
with respect to their case studies and explained the process of theory generation from
the interviews and other documents and scripts. The UK team explained the process of
observation leading to early theoretical reflections that inform questions and leads for
semi-structured interviews and further research which then leads, iteratively, to further
theorising. The objective of the process is to identify the strengths and weaknesses of
the policy of developing and promoting social enterprises through public sector activity
in order to inform improvements to the process and potential responses to the pitfalls.
The Polish team reviewed their detailed questionnaire that was due to be repeated in
2006, with a target of over 20,000 respondents. Both teams noted the investigative and
SEJ qualitative nature of many of the questions and it was suggested that a small set of
questions could be replicated in the UK as the basis of a comparative study. The UK team
6,3 did not have the resources to undertake a major study as the Polish questionnaire required
two hours of face-to-face interview but a limited study could be undertaken with the focal
actors of the existing case studies and a small number of enterprises that were
participating in a common programme of development. The two teams also discussed the
198 implications for the Polish team in developing their capacity into the qualitative research
process, discussing the use of student researchers with semi-structured questionnaires
and recording the discussions for transcription and later analysis. This would enable the
Polish team to formulate observations and theory with a collaborative team and work with
the UK team on the emergence of theory. The Italian partner was to undertake an in-depth
qualitative investigation of social enterprise incubators.
The team noted the paper from the Italian partner and agreed that it had some points
of common ground on which to build a level of collaboration. The notion of incubators
and spin-offs worked well with the Skoll Centre research and formed the basis of further
discussion. The Polish team noted that the concept of umbrella social enterprises is also
similar to their concept of whole-community social enterprise activity.
Based on this common ground, the teams met again in May 2006 in Florence, in
October 2006 in Krakow, in Portsmouth in March 2007 and finally in Brussels in
October 2007. These meetings served to update each partner in between the extensive
group discussions via internet telephony and to report to the wider transnational
partnerships. As well as undertaking the common framework described below, the UK
and Poland teams collaborated on translating and editing a Social Economy Texts
publication in Poland (Wyganski, 2007).

Research context
The objective of the transnational research activity was to undertake a small number of
in-depth, semi-structured interviews with social enterprises in Poland, the UK and Italy
to explore notions and experience of cross-sectoral partnerships. The cross-sectoral
partnerships under scrutiny were emerging relationships between established public
sector partners and nascent or emerging social entrepreneurs. The wider programme of
research was focussed on investigating these early days and months of developing and
securing a future for a social enterprise initiative which involved some varying forms of
public sector involvement, from contract to patronage, as opposed to a self-emerging
initiative. This wider research context is reported in detail in the project report and the
consequent journal paper (Curtis et al., 2008; Curtis, 2008).

Method
The researchers in each country were briefed to ask each of the questions that were
agreed, in turn. The interviewee was allowed to speak for as long as they wanted to
about the subject suggested by the question. The researcher chose a quiet place for the
interview, preferably at a place chosen by the interviewee. Care was taken not
to intimidate the interviewee or place them in unusual surroundings that could be
intimidating. Care was taken not to incur any risks of misunderstanding between the
researcher and the interviewee, situations such as the following were considered:
.
the interviewer and interview are of different gender;
.
the interviewee is a child, young person or has learning or personality difficulties;
 .
the nature of the research may be misunderstood; and Social economy
.
the interviewee may not be competent to adequately agree and consent to of trust
conditions of confidentiality.

In these circumstances, it was suggested or requested that a fellow worker be present

at the interview, albeit just watching rather than listening. The researchers were
discouraged from expressing their own opinion regarding the question but encouraged 199
the discussion by asking further related questions. The interviews were recorded but
the recorder was placed in a manner such that it is unobtrusive and did not distract the
interviewee. The researchers also informed the interviewees that the interview was
part of an international research project and that what they say in the interview will
remain completely confidential and will only be listened to by the immediate research
team. It interview would be transcribed but anything said would always remain
anonymous. The interviewees were informed that if the research team wished to quote
an interviewee and mention their name, the researchers would contact them back and
show them what will be said and ask for their permission to say it. The tapes and
transcripts will be kept secure under standard academic research guidelines.

Interview outline
The researchers were asked to cover the following topics of research interest in their
interviews whilst allowing the interviewee to extemporise freely. Care was taken to use
additional exploratory questions to deepen understanding of the response, rather than
to close a discussion down and move on to the next question:
.
Please discuss how (in what way) does the receipt of public funding (as opposed
to philanthropic or earned income) influences or effects the way your organisation
operates and/or decides what social issues are important.
.
What formal/official support have you received that has most influenced the way
your organisation is run and the priorities it sets. How has this support been
provided and why do you think it was useful? Describe an incident/event that
best illustrates this.
. What informal resource or support did you experience that had the most impact
on you as an organisation? Describe an incident/event that best describes this.
.
What was it that caused the greatest obstacle to you achieving your goal?
Describe how this obstacle effected your organisation.

Analysis of data
As a team, the transnational researchers followed the seven stages of qualitative
research data analysis (Table I) by listening to the tapes one by one or reading the
transcriptions, independently noting down phrases and information (known as “codes”)
that are interesting or intriguing. The interviews were reviewed a number of times and
new information noted. Triangulation of the data was achieved through the researchers
in each country coding their interviews first, independently of one another, then by
swapping the interviews and coding each others’ interviews – again without conferring.
Finally, the notes of each researcher were then shared and extensive discussions were
held to explore the meanings of the selected “codes”.
SEJ Stages Activities Outcomes
6,3
1. Familiarisation Read and re-read transcripts again Note emerging issues
2. Reflection Evaluate and critique against other Develop hypothesis and/or questions
research
3. Conceptualisation Concepts emerge reliability is Variables articulated which may need
questioned clarification of the data
200 4. Cataloguing Classify and label concepts and Data in cohesive format
concepts variables
5. Re-coding Re-visit data in the light of known Interpretation and analysis on-going
concepts. Problems with definitions
and meanings
6. Linking Analysis, explanations clearer and Link variables to form a clearer
trends or patterns emerging hypothesis. First draft can be written
Table I. 7. Re-evaluation Feedback from others may lead to Produce a coherent valid illustration of
The seven stages re-drafting the participant observation
of analysis of
qualitative data Source: Easterby-Smith et al. (1991, p. 110)

The results discussed below are presented in brief, with as little further development as
possible, seeking to allow the interviewee voice to penetrate the analysis. The process of
abstraction of the underlying theme of “trust” established 22 codes (the Appendix,
Table AI) from the interview transcripts which revolve around the “core category”
of trust.

Presentation of results
The UK and Poland interviews strongly indicated a concern with trust relationships
between the social enterprise and the public sector. As a Polish researcher put it “even
though we asked the question about the impact of public funding of social enterprises,
the astonishing thing is that trust issues arose, regardless of our question”. In a way, it
did not matter what the question was, the underlying themes returned to issues of trust,
mistrust, bureaucracy and legitimacy. All the quotes below are taken from the
interview transcripts.
Some of the interview material simply confirms the findings of existing literature.
For example, trust builds from deeply embedded relations (Barney and Clark, 2007,
p. 107). A Polish respondent commented:
“Yes, this is in a way his private land – his former students whom he was teaching”. and
“We have been working in Portsmouth and this area for the last – for the previous seven years.”
Trust is mediated and developed through calculative trust processes (Brashear et al.,
2003). A UK respondent commented:
[. . .] by 2000 – and we’ve been very successful. We started off slowly with the voluntary
community centre. We did a few jobs for HomeStar.
Weak links (Granovetter, 1973) are evident. A UK respondent noted:
And I had this sort of conversation with a few people, and eventually I made contact with a
woman [. . .] through a contact I knew through a charity I’m a chair of. And it was – you know,
it just went from there.
On the other hand, community embeddedness also creates substantial trust with the Social economy
public sector. This person had been a private entrepreneur before venturing into social of trust
entrepreneurship indicate how the social nature of the new venture was trusted by the
public sector agents, because the proposed enterprise was about, and for, the voluntary
sector but who was mistrusted by the voluntary sector itself:
And what I didn’t appreciate at that time, it was just come subsequently, is just sort of the
amount of trust-and automatic door opening you get because you are part of the CVS network. 201
But social entrepreneurs are not always embedded in actually communities, even
though the public sector agents trust them, and can be mistrusted but the community
elites:
[. . .] we’d actually found it quite difficult to sort of make an inroad into the voluntary
business – because they all suspect – they were all very suspicious of us.
Here, two quotes from a person who had been a private entrepreneur before venturing
into social entrepreneurship indicate how the social nature of the new venture was
trusted by the public sector agents, because the proposed enterprise was about, and for,
the voluntary sector but who was mistrusted by the voluntary sector itself.
Trust from the public sector can motivate the social entrepreneur. The trusting
public agent who was advocating for the project, even when critics of the project are
present and vocal, still proceeded to endow the trust. The public agent takes risks with
their own reputation, even if not with their own resources, and trades her own trust
resources to build trust for the social entrepreneur across her networks:
When we started our adventure with tourism, hardly anyone believed that it will take off at all
and there were many persons who were not against the project, but they were observers and
plenty of such joy, so ironic. [. . .] However, the Poviat county was providing institutional
support from the start. They believed in the project.
This is an enormous achievement. He trusted, took a risk and I believe he does not regret this
decision, as a substantial part, at least half of Poland heard about Bałtów.
We had very good relations with the acting director for environmental protection in
Warsaw.
“And T has got great – I mean, she understands how everything hangs together where I don’t
have an idea about how the whole [. . .] side works, how charities work with funding and
everything else”. “And T had the vision to see that. So, she has been a fundamental part of
getting this off the ground”.
Trust involves risk taking on both parts – not just the public sector agent. “This results
with – an understanding of the concept of partnership that is what partnership is for me.
We share benefits, but also the risk.” The partnership is one of sharing mutual trust
resources which reinforce obligations and performance. “And the time passing by
proves people that the involvement in a good undertaking, conviction, but not in terms
of chatting, but rather actions, it took us three years.” The public agent trusted the social
entrepreneurs so they felt obliged to prove he did not make a mistake. In this way, trust
mobilizes action: “For me personally, but also for the Association in this conceptual
sense, this was an enormous boost of such energy proving that the things we do simply
make sense.”
SEJ Trust is more important than the funding that the public sector can provide: “these
6,3 were small amounts of money, ten, fifteen thousand. But these were the first funds. We still
remember these amounts”. Public sector funding for startup social entrepreneurs is often
very small – hundreds of pound sterling is typical, where the salary of the entrepreneur
may cost tens of thousands of pounds sterling. Small amounts of money are provided, but
these small amounts are important because it proves somebody trusted them (when they
202 were small and unknown). The value of the fund provided is not really material in this
context, but progression from small amounts of funding to larger amounts seems to be
dependent on the trust resources that are developed and shared.
Trust is shared by being communicated symbolically to other organisations:
And since the start, similarly to the Poviat County, the Marshall’s Office was also with us.
Sometimes they were only cutting the ribbon, sometimes they provided some small funds, but
we always co-existed.
Being focussed helps the development of trusted relationships “We do not want to save
the whole world, but only this area, which is interesting for us, in which we believe we
are good at”. But, such partnerships can be just functional – like a contractual
relationship, and should not be confused with trust transactions “it depends on whether
we mean partnership contributing to development or we mean partnership as on the
basis of business partnership. These are two different things”.
Bureaucracy seems to be a significant initial block to the development of trust. One
respondent regretted:
[. . .] I must say that these funds, in particular the most recent ones have extremely burdened
us with bureaucracy.
If trust is lacking it leads to inspections and greater bureaucratic burdens, further
separating the two parties thereby further signalling a lack of trust. Creating
procedures and forms to manage the relationships and to create distance between the
public sector agent and the social entrepreneur significantly cools the trust
relationship:
In turn, I understand guidelines, in terms of spending [. . .] funds, but I see no trust in this.
Not even a bit of trust in relation with those who carry out an undertaking. In a way
confrontation with this bureaucracy, formal, financial, or else essential-financial, it is
sometimes disastrous.
But on the other hand we are burdened with this disastrous number of inspections. This is
already a joke, but the first reportage published in Rzeczpospolita resulted with five
inspections.
There is simply plenty of bureaucracy, reports, clearings, and thus making the same things
using different printed forms, even simply focusing on these issues, I do not know what type
of result this benefit should bring about. And thus instead of focusing on this training (we fill
out) a questionnaire, if it had some social effect.
Mistrust mediated through bureaucratic relationships is demotivating and trust is hard
to establish, but easily damaged:
This means that this lack of trust is painful to me. It is painful to explain things, which are that
obvious, explaining them ten times and each time the same thing, this causes some doubts
about common sense approach. And indeed it made us more rigid.
 I honestly tell you that our cooperation with the local government is not going perfectly [. . .] Social economy
We continuously fear that along with the development of the investment projects, we shall
receive a renunciation of the lease. of trust
These shifts from trust relationships to communication mediated by documentation
and audit result in political assemblages (Allen and Cochrane, 2007) and power shifts.
This is often an attempt to codify (Bruni, 2005, p. 79) the relationship but critically shifts
the participants from trust to reputation which must be managed through systems, 203
procedures and audits. The social entrepreneur is disempowered by these shifts:
“And only now has it all turned against us, so suddenly” and “I have no idea. This is simply a
theory of conspiracy. We are getting lost.”
Bureaucracy in itself does not create mistrust, but seems to follow behind the initial
trust relationship, stabilising and building on the trust, binding the partners together:
I mean even – for us, as well, some of these guidelines related to in fact document
management, will be useful. As we have learnt a lot during the execution of these projects [. . .]
And:
[. . .] we are currently transferring these procedures, which are required by the European
Programs, automatically to other entities.
Bureaucratic relations do not outlast trust – the relationship breaks down once trust is
lost and a loss of trust leads to failed communication, especially when they follow the
shift of power that comes from the bureaucratisation of the relationship:
But they are becoming increasingly suspicious of us. I do not know why.
[. . .] they ordered such an inspection service with a fully external institution. And we received
a congratulation card at that time, which was ignored by NAME. It stated that this protocol
was missing guidelines. We were continuously explaining, but a representative of the
Regional Development Ministry was also explaining that they cannot provide guidelines.
It seems that trust relations always remain informal. These are similar to “contrats
moraux” reported by Lorenz (2003):
Well, apart from the credentials, it is based on such good will of cooperation. We have not
signed a contract, but there was even such situation that I was entrusted this year with
organizing such “Day of Solidarity” with mentally sick person.
Most importantly in all this is that trust precedes performance – trust can be
established even though the partnership is not yet adequate:
[. . .] as Ms. Director visited us, we received a subsidy for institutional support. So they trusted
us. So it is ok, it is good, something can be improved and we received money.
In one case, the public authority trusted the emerging social enterprise and provided
institutional support from the start (when hardly anyone believed that it would
succeed) which strengthened and mobilized the nascent social enterprise. The leitmotiv
running through the interviews (especially when the beginning of the association is
described) is the trust that was put to the association “on credit” (the entrepreneur feels
that they have been given benefit of the doubt). It obliged and mobilized them to work
harder – “to meet expectations”. In other interviews, the public administration did not
SEJ trust the emerging social enterprise. This sort of relationship seemed to manifest itself in
6,3 excess of bureaucracy (for example, connected with structural funds). Simultaneously,
however, the social enterprise appreciated such bureaucratic procedures (in reasonable
scale), which they had to implement – transferring these procedures, required by the
European Programmes, to other entities and projects.
Too much trust put on the social enterprise, however, could also cause problems.
204 In Poland, the local government “trusted” the effectiveness of the social enterprise
so much that it left them alone with problems they should have dealt with together.
The partnership definition was formulated by the one respondent – sharing benefits,
but also the risk – showing an “entrepreneurial” way of thinking and understanding of
cooperation. There were other proofs of an attitude characterising the “model” social
entrepreneur: conceiving public finance as supporting organisation’s budget (i.e. not
main source of income), specialisation, formalization of cooperation (signing contracts)
and taking a “client-oriented” perspective during planning actions.

Conclusions
The outcomes of this exploratory research, whilst confirming insights from wider social
capital, social embeddedness and trust literature, indicate that in some circumstances
trust precedes performance, that mechanisms of what Lorenz (2003) calls “encapsulated”
and “calculative” trust do not operate, but rather than a sense of a commonly shared ethic
(or social objective) forms an “austere basis of trust” (Blackburn, 1998). The findings add
to Sako’s (1992) model of trust. Competency trust was not demonstrated and in the
cases studied the relationships were too immature for contractual trust to have been
developed. Good will trust may represent a robust pre-requisite, but the research
provides some insights into how goodwill trust is structured. These theoretical insights
that have been derived from in-depth field studies of a small number of cases do not
provide for robust theories, as yet, but form the basis for ongoing work in other cases in
other contexts. The insights do, however, provide some guidance to public sector agents
working with social entrepreneurs to understand the trust resources required, and the
limits to that trust, and the impact of bureaucratisation on the socially entrepreneurial
startup.

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Appendix Social economy
of trust
Code Quote

Trust builds from deeply embedded relations “Yes, this is in a way his private land – his former
students whom he was teaching”. And “We have 207
been working in Portsmouth and this area for the
last – for the previous seven years”
Trust is mediated and developed through [. . .] by 2000 – and we’ve been very successful. We
calculative trust processes started off slowly with the voluntary community
centre. We did a few jobs for HomeStar
Weak links are evident And I had this sort of conversation with a few
people, and eventually I made contact with a
woman [. . .] through a contact I knew through a
charity I’m a chair of. And it was – you know, it
just went from there
Community embeddedness also creates And what I didn’t appreciate at that time, it was
substantial trust with the public sector just come subsequently, is just sort of the amount
of trust – and automatic door opening you get
because you are part of the CVS network
Social entrepreneurs are not always embedded From there, we – where we’d actually found it
in communities and can be mistrusted quite difficult to sort of make an inroad into the
voluntary business – because they all suspect –
they were all very suspicious of us
Trust from the public sector can motivate When we started our adventure with tourism,
the social entrepreneur hardly anyone believed that it will take off at all
and there were many persons who were not
against the project, but they were observers and
plenty of such joy, so ironic [. . .]. However, the
Poviat county was providing institutional support
from the start. They believed in the project
Trust from an entredonneur/boundary This is an enormous achievement. He trusted,
spanning agent is of strategic importance took a risk and I believe he does not regret this
decision, as a substantial part, at least half of
Poland heard about Bałtów
We had very good relations with the acting
director for environmental protection in Warsaw
And T has got great – I mean, she understands
how everything hangs together where I don’t have
an idea about how the whole [. . .]. side works, how
charities work with funding and everything else.
And T had the vision to see that. So, she has been
a fundamental part of getting this off the ground
Trust involves risk taking on both parts – not just This results with – an understanding of the
the entredonneur in the public sector concept of partnership that is what partnership is
for me. We share benefits, but also the risk
Trust reinforces obligations and performance “And the time passing by proves people that the
involvement in a good undertaking, conviction,
but not in terms of chatting, but rather actions, it
took us three years.” – somebody trusted them so Table AI.
they felt obliged to prove he didn’t make mistake Codes arising from
(continued) the transcripts
SEJ Code Quote
6,3
Trust mobilizes action For me personally, but also for the Association in
this conceptual sense, this was an enormous boost
of such energy proving that the things we do
simply make sense
208 Trust is more important than the funding that the “[. . .] these were small amounts of money, ten,
public sector can provide fifteen thousand. But these were the first funds.
We still remember these amounts” – small
amounts of money but important because it
proves somebody trusted them (when they were
small and unknown)
Trust is communicated symbolically to other And since the start, similarly to the Poviat
organisations County, the Marshall’s Office was also with us.
Sometimes they were only cutting the ribbon,
sometimes they provided some small funds, but
we always co-existed (own italics)
Being focussed helps the development of trusted Well I mean – we do not want to catch a few birds
relationships by the tail
We do not want to save the whole world, but only
this area, which is interesting for us, in which we
believe we are good at
Partnerships can be just functional – like a [. . .] it depends on whether we mean partnership
contractual relationship, and should not be contributing to development or we mean
confused with trust transactions partnership as on the basis of business
partnership. These are two different things
Bureaucracy seems to be a significant initial block Regretfully I must say that these funds, in
to the development of trust particular the most recent ones have extremely
burdened us with bureaucracy
And a lack of trust leads to inspections and In turn, I understand guidelines, in terms of
greater bureaucratic burdens, further separating spending European funds, but I see no trust in
the two parties – signalling of a lack of trust this. Not even a bit of trust in relation with those
who carry out an undertaking. In a way
confrontation with this bureaucracy, formal,
financial, or else essential-financial, it is
sometimes disastrous
But on the other hand we are burdened with this
disastrous number of inspections. This is already
a joke, but the first reportage published in
Rzeczpospolita resulted with five inspections
There is simply plenty of bureaucracy, reports,
clearings, and thus making the same things using
different printed forms, even simply focusing on
these issues, I do not know what type of result this
benefit should bring about. And thus instead of
focusing on this training (we fill out) a
questionnaire, if it had some social effect
Mistrust mediated through bureaucratic This means that this lack of trust is painful to me. It
relationships are demotivating is painful to explain things, which are that obvious,
explaining them ten times and each time the same
thing, this causes some doubts about common sense
approach. And indeed it made us more rigid
Table AI. (continued)
Code Quote
Social economy
of trust
Trust is hard to establish and easily I honestly tell you that our cooperation with the
damaged local government is not going perfectly [. . .] We
continuously fear that along with the development
of the investment projects, we shall receive a
renunciation of the lease 209
“And only now has it all turned against us, so
suddenly” and “Each manipulation with the
disabled persons” act results with the fact that we
do not sleep at nights, as it is unknown what they
will come up with
I have no idea. This is simply a theory of
conspiracy. We are getting lost
Bureaucracy in itself does not create mistrust, “I mean even – for us, as well, some of these
but seems to follow behind the initial trust guidelines related to in fact document
relationship, stabilising and building on the management, will be useful. As we have learnt a
trust, binding the partners together lot during the execution of these projects” and “we
are currently transferring these procedures, which
are required by the European Programs,
automatically to other entities”
Bureaucratic relations do not outlast trust – But they are becoming increasingly suspicious of
the relationship breaks down once trust is us. I do not know why
lost and a loss of trust leads to failed
communication
[. . .] they ordered such an inspection service with
a fully external institution. And we received a
congratulation card at that time, which was
ignored by PFRON. It stated that this protocol
was missing guidelines. We were continuously
explaining, but a representative of the Regional
Development Ministry was also explaining that
they cannot provide guidelines
Trust relations always remain informal – Well, apart from the credentials, it is based on
“contrats moraux” such good will of cooperation. We have not signed
a contract, but there was even such situation that I
was entrusted this year with organizing such
“Day of Solidarity” with mentally sick person
Trust precedes performance – trust can be [. . .] as Ms. Director visited us, we received a
established even though the partnership is subsidy for institutional support. So they trusted
not yet adequate us. So it is ok, it is good, something can be
improved and we received money Table AI.

Corresponding author
Timothy Curtis can be contacted at: tim.curtis@northampton.ac.uk

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