Social Enterprise What is it?

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Social EnterpriseWhat is it?

• David Lane
• Operations Manager

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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

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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

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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

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What do they look like
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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

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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

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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.

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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)

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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.

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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

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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

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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

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Questions and Answers
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