Social Enterprise What is it? David Lane Operations Manager

What will be covered What is a social enterprise What social enterprises do What do social enterprises look like What kind of structure do they have What a social enterprise is not Opportunities Challenges

What is social enterprise A definition "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 profit for shareholders and owners. Social Enterprise A Strategy for Success DTI 2004

What do social enterprises do Social enterprises tackle a wide range of social and environmental issues and operate in all parts of the economy. By using business solutions to achieve public good, the Government believes that social enterprises have a distinct and valuable role to play in a helping create a strong, sustainable and socially inclusive economy. Social Enterprise - a strategy for success DTI, 2004

What do they look like

What do they look like Social enterprises are diverse. They include: – local community enterprises, –social firms, –mutual organisations such as co-operatives and –large scale organisations operating nationally or internationally. Social Enterprise - a strategy for success DTI, 2004

What legal structure do they have There is no single legal model for social enterprise. They include: –companies limited by guarantee, –industrial and provident societies and companies limited by shares; –some organisations are unincorporated and others are registered charities.” Social Enterprise - a strategy for success DTI, 2004

Removing the confusion Social enterprises are then diverse and come in a variety of shapes and forms. The key issue is that it is a ‘business model’ a way of doing things. They trade in goods and or services to make a profit and be a viable business They re-invest the profit into a social aim.

What social enterprises are not A Voluntary Community Organisation or Charity that does not trade – or is reliant on a disproportionate amount of grant funding (50%). A company that distributes its profits to shareholders (although social enterprises and particularly Community Interest Companies (CIC) can distribute 30% of its profit to shareholders – the remaining 70% must be re-invested in the social aims)

What social enterprises are not A profit making business which demonstrates its Corporate Social Responsibility. A business that does not give equal weight (in terms of performance) to its social goals as well as economical goals.

To re-cap Social enterprises have a social mission and invest their profits in that mission They are businesses which operate to make a profit by trading in goods or services There is not one legal structure for a social enterprise

Opportunities Social Enterprises are recognised as a sustainable ‘business model’ that can deliver public services –More flexibly and more locally –Tailored to the needs of communities –Have considerable added value and impact –Meet a number of priorities e.g. health; economy; employment; environmental etc. –There is then, significant opportunities within the modernisation of public service agenda for social enterprises of all types

Challenges There are however many challenges –Public sector procurement is contract related not grants, delivery of outputs and outcomes are key –Public sector have limited contract management resources and many favour ‘prime contractors’, there is a need to achieve appropriate scale –Balancing social aims and financial sustainability is not simple –Achieving full cost recovery is still a concept to many –Competition can come from the third sector, public sector and private sector

Questions and Answers

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