CEEDR Centre for Enterprise & Economic Development Research (CEEDR), Middlesex University Business School Professor Fergus Lyon and Dr Leandro Sepulveda Mapping social enterprises: past approaches, challenges and future directions

CEEDR Introduction and objectives  Confusion and lack of clarity despite the resources allocated to ensuring a common set of methodologies  The issue of mapping continues to grow in importance  Loose definitions result in mapping exercises making political decisions about what is included and excluded, without clear explanation  Research questions What are the approaches to mapping in the past? What are the different definitions used and how have these been operationalised? What are the implications for future mapping exercises?

CEEDR Why map?  Establish the scale of social enterprise activity especially for delivery of public services  Identify a baseline to measure impact in the future  Identify different segments of the social enterprise sector and develop targeted support  Know how many organisations are entitled to public sector benefit and fiscal incentives  But Some argue that social enterprise defy definition Weariness of the continued debate Mapping examines what is present- not those thinking of moving into social enterprise activity

CEEDR Definitions  A starting point “A social enterprise is a business with primarily social objectives, whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profits for shareholders” (DTI, 2002).  Loose definition allows those that define themselves as social enterprises to be included  Others define by using examples “Including development trusts, community enterprises, housing associations, football supporters’ trusts, social firms, leisure trusts and co- operatives  Ecotec (2004) identifies definition tests based on ownership, trading and social aims

CEEDR Research on mapping social enterprise  Local studies, building on directories and networks Variable definitions based on interpretations of compilers  National mapping: IFF 2005 study: A survey of Social Enterprises across the UK. Survey of Companies Limited by Guarantee and Industrial and Provident Societies only, not included charities Asked respondents if they p ursue a social, including environmental, goal Identified 15,000 social enterprises- but likely to be an underestimate  Annual Small Business Survey Sample of 8640 small enterprises, 5% of those with employees and 5% of those without employees said they were social enterprises. 55,000 social enterprises based on 5% of all enterprises with employees

CEEDR Defining ownership  DTI (2004) define social ownership as “autonomous organisations with a governance and ownership structure based on participation by stakeholder groups and trustees”  CIC, CLG, IPS, housing associations, and charities  Annual Small Business Survey (DTI, 2006) set a level of 50% of profit to be put to social aims  But: Difficult to identify those that are Co Ltd by shares Are branches registered separately different organisations Defining autonomous- when large proportion of income from public sector

CEEDR Defining trading income  ‘Income from sale of goods and services’ and ‘payments received in direct exchange for a product, service’  But Arbitrary cut off at 25% or 50% Distinguishing contracts from grants Membership subscriptions: distinguishing between donations and paying for ‘significant benefits’ Data on sales and fees in Guidestar and other sources reliant on how accountants have allocated

CEEDR Defining social aims  ‘Primarily social objectives’ – open to degree of interpretation  CIC test: social benefits that should extend beyond a membership group, unless these are socially disadvantaged/excluded – the reasonable person test  Charitable status test : 'charities must benefit the community at large or a substantial section within it. They must not entirely exclude those of limited means‘

CEEDR Difficult cases I  Sports clubs improving health – but what level of fees make them exclusive, and does this exclude them  Residents associations difficult to ascertain if they have a social inclusion agenda  Faith based organisations many are trading through renting out space etc. Are they widely accessible and have social aims  Cooperatives are they exclusive, is benefiting members a social objective, potential anti-social impact on non members

CEEDR Difficult cases II  Educational activities are parent teacher associations, and other school trusts widely accessible. Do independent schools with charitable status have social aims Universities- are they autonomous of the public sector?  Cultural organisations, theatres and art galleries  Trade associations and professional bodies  Clubs and hobby groups  Trade unions and political parties

CEEDR Conclusions  Political origins of the term social enterprise result in politically sensitive attempts to keep the definition open  So not just technical data collection issues  Each mapping exercise has to make political decisions about what is included. This is a socially constructed process and decisions should be explicit  Need for greater clarity and transparency

CEEDR Conclusions : future directions  Fragmentation of research through regional mapping exercises with no common approaches and different interpretations of the definition  Include or exclude certain types of organisations that do not feel like social enterprises, despite meeting the tests  Policy makers need to specify the parts of the social enterprise sector where they will focus their resources rather than excluding certain types from their definition  Future opportunities to be grasped: regional mapping exercises, local economic assessments, Third Sector Research Centre