GOSW Social Enterprise Workshop Oct 2010

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Slides from workshop delivered to GOSW and RDA staff in Bristol

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  • Put course in context. Refer to other 3X1 day modules that provide more detail from the advisor’s persective.
  • Introduce the concept of the third sector. Point out the dynamics between the sectors and current directions of change.
  • This definition is from the Concise Project, Middlesex University. Use this more detailed definition to go through the various aspects of the definition and their fit into practice and the issues around defining such a wide and diverse sector
  • Bring the group back to the core aspects of the definition
  • Bring the group back to the core aspects of the definition
  • Discuss in small groups and feedback to the class.
  • Refer also to the larger chart of the social economy at the back of the pack.
  • Introduce Case Study. Put Questions 1 and 2.
  • Discuss commercial risk, trade, and charity
  • Case Scenarios Question 4
  • GOSW Social Enterprise Workshop Oct 2010

    1. 1. Social Enterprise Workshop Government Office for South West & SWRDA Julie Harris RISE 22nd October 2010
    2. 2. Overview • RISE • Context and current reports • Social enterprise standards • Broad underpinning knowledge • Understanding social enterprise
    3. 3. RISE • RISE is the voice for South West social enterprise and supports the development of sustainable social enterprise in the region. • Membership • BAN • Newsletter • Projects – marketing, leadership, food, housing, health and social care
    4. 4. The Big Picture • Private Sector • Civil Sector/ Social Economy • Public Sector
    5. 5. What are they? • Social enterprises have 2 primary aims: – They trade – They apply profits to social purpose
    6. 6. What are they? • Some definitions: – 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 (dti) – Businesses that aim not only to make money, but also to have a positive effect on the communities they serve, the people with whom they work and their own employees (Co-active Ltd) – Social enterprises are businesses that trade in order to pursue a social aim (Business Link)
    7. 7. Social Enterprise Mark • National programme • 290 holders (and growing) • Marketing • www.socialenterprisemark.org.uk
    8. 8. Social Enterprise Mark
    9. 9. What are they? • Social enterprises are: – ‘More than profit’ organisations – Seek to meet social aims by engaging in economic and trading activities – Have legal structures which ensure that all assets are not in the ownership of individuals but are held in trust for the benefit of those persons and/or areas that are the intended beneficiaries of the enterprise’s social aims. – Have organisational structures in which full participation of members is encouraged on a co-operative basis with equal rights accorded to all members
    10. 10. What are they? • Characteristics – Enterprise orientation – they are directly involved in producing goods or providing services to a market – Social aims – they have explicit social ethical values including a commitment to local capacity building. They are accountable to their members/stakeholders and the wider community for their social, environmental and economic impact (RISE)
    11. 11. Example - COSMIC • Providing ICT support and services • Turnover £500k, 13 employees • > 50% income from trading • Membership • Focus on rural ICT, skills, employment • Digital Inclusion …and now .. leadership
    12. 12. Rural ICT
    13. 13. Digital Inclusion
    14. 14. Employment and Skills
    15. 15. Leadership Development
    16. 16. How are they different? How are social enterprises different from – ‘traditional business’? – voluntary and community organisations? – public sector? Clear focus on social objectives Trading and generating profits – financial, social, environmental
    17. 17. How are they different? • Measures of success – Traditional business • Operates in the interest of the owner or shareholders • To make profit – A social enterprise has broader measures • Profits are invested in social purpose • Local good-quality employment • Spending money in the local economy • Providing an alternative business model
    18. 18. How are they different? Social Enterprise / Community Sector Profit-driven trading Public service, non-trading
    19. 19. Where do Social Enterprises fit in Big Society? • Public services – delivery and support – Health and social care – Community Land Trusts – Free schools – Probation, rehabilitation and offender schemes – Worklessness – Asset Management and Community Buildings – Supply chains
    20. 20. Characteristics of a successful social enterprise – Gaining independence and autonomy through trading – Entrepreneurial, innovative, risk-taking behaviour – Flexible and adaptable practices – Customer and community focus – Stakeholder engagement
    21. 21. Their values – Not just to make a profit – having social purpose – To make a difference: • In the way they are managed, owned and accountable • In the way they deliver goods and services • In the way they work with their community and stakeholders • In the way they do business
    22. 22. Forms of social enterprise • Community Interest Companies (run by and for a particular community) – www.cicregulator.gov.uk • Co-operatives (businesses owned and run by a group of people for the benefit of their members) – www.coop.co.uk • Development Trusts (community based and owned regeneration enterprises) – ( www.dta.org.uk )
    23. 23. Forms of social enterprise • Social Firms (businesses that have a significant number of employees with a disability) – (www.socialfirms.co.uk ) • Trading arms of some charities – Charitable company with a community business that transfers surplus to the charity • Industrial and Provident Societies – Credit Unions, community owns shares in a shop or centre
    24. 24. What do they do? – Offer social or environmental goods and services • e.g. recycling or childcare – Trading to provide (or cross-subsidise) social or environmental goods or services • Trading arms of some charities – Use processes or ways of working that have significant social benefit • Care workers organise themselves as a co-operative in order to take control of their work environment
    25. 25. Why choose social enterprise? • Founders of social enterprises are motivated by – A desire to improve their community – Values that motivate partnership working – Member involvement – Concern for local services
    26. 26. Where do they come from? • Local residents are offered a community facility if a sustainable business plan can be written • A crèche is becoming large and parents would like to develop to a full-time nursery • Local residents in partnership with the local council develop a disused site as business units to improve employment opportunities • Community recycling project develops into sustainable business with local employment • Voluntary group wishes to expand its activities and become more commercial • A group of workers buys a business from their retiring manager
    27. 27. Where do they come from? • A community centre offers training and skills development through accredited courses • A group of workers creates a co-operative catering business • A funded project coming to the end of its funding package wants to continue by charging for services and delivering under contract • Regeneration activity has inspired a community to set up a development trust to continue managing community assets • Community composting through volunteers has grown and needs to become a community business
    28. 28. Social enterprise in the UK • At least 55,000 social enterprises in the UK (SEU, Summer 2006) • Represents 5% of all businesses with employees • Combined turnover of about £27 billion • Previous research (SEU, July 05) found that the South West was the 3rd largest region for social enterprise in the UK
    29. 29. Social enterprise SW – Around 6,000 social enterprises and growing – Social Enterprise Mark – Examples from local authorities – – Sandwell Community Caring Trust – Tone Leisure – Pluss – Selwood Housing – Community Foster Care
    30. 30. Social enterprises – the driving force! • Local needs – Village shop – Nursery – Business units • Local opportunities – Regeneration programmes – Community-owned assets – the community centre – Recycling • Voluntary sector – Sustainability issues
    31. 31. Setting up a social enterprise – the issues • Defining your mission and attracting others • Agreeing business and social purpose • Planning business viability • How to handle profits and assets • Democracy and accountability
    32. 32. Voluntary organisation to social enterprise • The big issues include: • Culture change • Business structures • Business planning • Accountability (funding bodies - stakeholders) • The workforce can be a mix of staff and volunteers
    33. 33. Incorporation • A social enterprise is usually an incorporated body (a company) – Protects individuals from personal liability – Winding up – debt – Something going wrong – Needs to be seen to be accountable and open – Difficulties of engaging people if no safeguards – Own legal identity – Limits of protection
    34. 34. Forms of Incorporation • Private sector company options – Company limited by guarantee – Company limited by shares (private or public) • Social enterprise sector company options – Company limited by guarantee – Community Interest Company – Industrial and Provident Society (IPS) Charitable or not charitable?
    35. 35. Forms of Incorporation • Social enterprise constitutions enable – One member one vote – Clear membership terms supporting the objects of the society – Surplus distribution for social purpose – Community assets to be safeguarded – Distribution of assets or bonuses evenly among the members of a co-operative
    36. 36. Models of social enterprise • Co-operatives – IPS – Workers own the business – worker co-operatives – Co-operative Consortium – self-employed people or other businesses come together to form a consortium or marketing co-operative • Community Business – CIC, Company Ltd by Guarantee – Owned and run by a community – Representation from the workforce, the locality, other organisations • Development Trusts – Asset-based development with community ownership – Often a range of projects under one umbrella organisation
    37. 37. Sources of start-up capital • Membership subscriptions or share capital • Start-up grants and loans • Borrowing from financial institutions • Community Development Finance • Leasing and hire purchase • Personal funds • Fundraising • Volunteer labour • Asset transfer
    38. 38. Sources of start-up capital • Commercial Loan • Community Development Finance Institutions: www.cdfa.org.uk –Bridges Community Ventures Ltd –Charity Bank –Cooperative and Community Finance –South West Investment Group –Triodos Bank –Wessex Reinvestment Trust Group
    39. 39. Trading Income • Consider: – Reinvestment in the social enterprise – Keeping adequate reserves – Looking beyond grants – Making use of tax incentives
    40. 40. Trading income • Robust financial management is needed Why? - Accountability - Communication between board and operational management - Trading income, managing cash flows, reporting on grant targets - A mix of trading income and other income - Impacts on profit/loss, health of the business
    41. 41. Support systems National • Co-operatives UK www.cooperatives-uk.coop • Social Firms UK www.socialfirms.co.uk • Social Enterprise Coalition www.socialenterprise.org.uk • Development Trust Association www.dta.org.uk
    42. 42. Support systems Regional • Regional Infrastructure for Social Enterprise (RISE) – or often equivalent in other regions • Networks for advisors (in the South West RISE runs the Business Advisors Network) • Business Links • Regional Development Agency Local • Look up your local support organisations. The RISE website gives a list of these in the South West. www.rise-sw.co.uk There is also a list on the Social Enterprise Coalition website www.socialenterprise.org.uk
    43. 43. Questions and Discussions • Contact details – • Julie Harris • 01392 435775 • julieharris@rise-sw.co.uk

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