“ any private activity conducted in the public interest, organised with an entrepreneurial strategy but whose main purpose is not the maximisation of profit but the attainment of certain economic and social goals, and which has a capacity of bringing innovative solutions to the problems of social exclusion and unemployment” (OECD, 1999 p10).
“ have legal structures which ensure that all assets and accumulated wealth are not in the ownership of individuals but are held in trust and for the benefit of those persons who are or areas that are the intended beneficiaries of the enterprise's social aims”.
took the “view that not all social and community enterprises need to have social ownership”.
Ecotec report for DTI
Test A: Enterprise Orientation: Direct involvement in the production of goods and the provision of services to the market, seeks to be viable trading concern, makes a surplus from trading. 50% income from trading was presented as a common cut-off.
Test B: Social Aims: Explicit social aims such as job creation, training and provision of local services. Values include a commitment to local capacity building, accountability to members and the wider community for social, environmental and economic impact.
Test C: Social Ownership: Autonomous organisations with a governance and ownership structure based on participation by stakeholder groups (users or clients, local community groups, etc.) or by trustees. Profits are distributed as profit sharing to stakeholders or used for the benefit of the community. Social ownership does not form part of the Government definition, although it can be seen as a way to achieve social objectives and to ensure surpluses are re-invested
Small Business Service provides an authoritative definition for the sector “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”.
Key Characteristics GHK et al., 2006
Linear descriptions Seanor, P., Bull, M. & Ridley-Duff, R. J. (2007) "Contradictions in Social Enterprise: Do they draw in straight lines or circles?" paper to 30th ISBE Conference, Glasgow, 7-9th November, Drawing 1
Spectra Social Enterprise London, 1999
Social Enterprise London, 1999
Linear Definitions of Social Enterprise
Is a one dimension ‘spectrum’ sufficient?
What if social enterprise is multi-dimensional / multi-purpose?
How is state / public sector involvement to be theorised? (Somers, 2007)
Is the private sector affected too? (Ridley-Duff, 2008)
Where is democracy in this debate? (Nyssens, 2006).
So, more dimensions need exploring:
Public Sector social entrepreneurship (supporting market development and welfare reforms)
Private sector social entrepreneurship (partnerships / collaborations / innovations)
Public - Third Sector Spectrum
Hybridisation (Nyssens, 2006:318)
"…we argue that social enterprises mix the economic principles of market, redistribution and reciprocity, and hybridize their three types of economic exchange so that they work together rather than in isolation from each other."
Leadbeater's Model (1997)
First theorisation of social entrepreneurship as cross-sector.
Recognises private and public sector influences.
Does not see social enterprise as a distinct sector.
Does this lead to hybrid forms of organisation?
Cross-Sector Theories Seanor, P., Bull, M. & Ridley-Duff, R. J. (2007) "Contradictions in Social Enterprise: Do they draw in straight lines or circles?" paper to 30th ISBE Conference, Glasgow, 7-9th November, Drawings 8 and 10
Composite Theory of Social Enterprise
EMES -Fuzzy Set EMES Criteria for judging social enterprises (from Curtis et al 2008) Progressive employment conditions Limited distribution of profit Participatory decision-making Decision making NOT based in other financing Decision making NOT based on capital ownership Beneficiary-led initiative Citizen-led Initiative Explicit community benefit aim Paid workers Significant economic risk High level of autonomy Continuous production capacity EMES CRITERIA