Intro To Social Enterprise

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  • Intro To Social Enterprise

    1. 1. INTRODUCTION TO SOCIAL ENTERPRISE UDAY THAKKAR & ROBERT FOSTER
    2. 2. INTRODUCTION <ul><li>What is Social Enterprise? </li></ul><ul><li>No legal definition </li></ul><ul><li>Anyone can call themselves a social enterprise – and many do </li></ul><ul><li>Organisations that have been practising social enterprise have been around for a long time though the term itself is new </li></ul>
    3. 3. GENERAL CHARECTERISTICS - 1 <ul><li>Social Enterprises are businesses that trade in order to fulfil social aims </li></ul><ul><li>They bring together people and communities for economic development and social gain </li></ul><ul><li>There are usually 4 defining characteristics, two of which are controversial </li></ul>
    4. 4. GENERAL CHARECTERISTICS - 2 <ul><li>Non-controversial </li></ul><ul><ul><li>Enterprise oriented </li></ul></ul><ul><ul><li>Social aims </li></ul></ul><ul><li>Controversial </li></ul><ul><ul><li>Social ownership </li></ul></ul><ul><ul><li>Restricted profit distribution </li></ul></ul>
    5. 5. GENERAL CHARECTERISTICS - 3 <ul><li>Enterprise means some form of trading or service delivery </li></ul><ul><li>Social aims means profits generated are used for the benefit of the community </li></ul><ul><ul><li>This could be that surpluses/profits are used directly for the community </li></ul></ul><ul><ul><ul><li>Or </li></ul></ul></ul><ul><ul><li>Reinvested in the business to grow it </li></ul></ul>
    6. 6. GENERAL CHARECTERISTICS - 4 <ul><li>Community ownership requires stakeholder participation in the ownership or indeed there is no ownership, but control of the business is under the Stewardship of individuals or organisations as representatives of the wider community </li></ul><ul><li>Restricted profit distribution means that shareholders are not rewarded through dividend distribution </li></ul>
    7. 7. OFFICIAL DEFINITIONS <ul><li>The DtI defined social enterprise as being: “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.” </li></ul>
    8. 8. PROFIT DISTRIBUTION <ul><li>Profit distribution causes a problem when defining social enterprise </li></ul><ul><li>Generally accepted that there should not be any profit distribution to the owners, unless the owner is a charity/voluntary/community body </li></ul><ul><li>However many recognised social enterprises distribute profits </li></ul>
    9. 9. PROFIT DISTRIBUTION - 2 <ul><li>Co-operatives claim to be the earliest form of Social Enterprise, yet they exist for the benefit of their members and they distribute profits to members. (Too big? Too powerful?) </li></ul><ul><li>Recently introduced legal structure, a Community Interest Company which is a company limited by shares, is allowed limited profit distribution </li></ul>
    10. 10. COMMERCIAL TRANSACTION
    11. 11. S E TRANSACTION FLOW
    12. 12. CONFUSION ISSUES - 1 <ul><li>Community </li></ul><ul><ul><li>What is the “Community”, for Co-Ops it is their members, what about the John Lewis “Partnership”? </li></ul></ul><ul><li>Legal Structure </li></ul><ul><ul><li>Able & Cole are a partnership – distribute organic produce through schools and contribute 25% of the turnover to the school. Are they a Social Enterprise? </li></ul></ul>
    13. 13. CONFUSION ISSUES - 2 <ul><li>Activity </li></ul><ul><ul><li>Is the Day Chocolate Company/Divine Chocolate a social enterprise? </li></ul></ul><ul><ul><li>Is Body Shop? </li></ul></ul><ul><ul><li>Is Innocent? </li></ul></ul><ul><ul><li>Grant funded charities vaguely playing at enterprise? </li></ul></ul>
    14. 14. CONFUSION ISSUES - 3 <ul><li>Funding </li></ul><ul><ul><li>Sari UK, sales to public, profits used for employment, training and recycling. High risk/High personal responsibility </li></ul></ul><ul><li>Powers that be are suspicious of enterprises that have not originated from the voluntary/ statutory sectors </li></ul>
    15. 15. ORGANISATIONAL TRANSITION
    16. 16. DIFFERENCES <ul><li>In USA social enterprises tend to be Value Driven Businesses </li></ul><ul><li>They do not get Government support on the whole </li></ul><ul><li>Have to be financially sustainable </li></ul><ul><li>Have to fund themselves by means other than grants </li></ul>
    17. 17. TYPES OF BUSINESSES <ul><li>Charities Trading Arms </li></ul><ul><li>Employee - owned businesses </li></ul><ul><li>Credit Unions </li></ul><ul><li>Co-Operatives </li></ul><ul><li>Development Trusts </li></ul><ul><li>Social Firms </li></ul><ul><li>Intermediate Labour Market Companies </li></ul><ul><li>Community Businesses </li></ul>
    18. 18. TYPES OF BUSINESSES - 2 <ul><li>Employee - owned businesses </li></ul><ul><ul><li>They range in size such that Greenwich Leisure employs over 1,000 people </li></ul></ul><ul><ul><li>Eaga partnership aims to get up to 10,000 with a turnover of £1 billion, and is also looking to get a stock exchange listing. </li></ul></ul><ul><ul><li>Don’t forget John Lewis Partnership </li></ul></ul>
    19. 19. TYPES OF BUSINESSES - 3 <ul><li>Community Businesses – trading organisation which is set up, owned and controlled by the local community. The aim is to be a focus for local development and to create self-supporting jobs for local people </li></ul><ul><li>The community defines itself through either </li></ul><ul><ul><li>Geography </li></ul></ul><ul><ul><li>Socially, i.e. ethnicity, marginalised groups </li></ul></ul><ul><ul><li>Shared interest </li></ul></ul>
    20. 20. Social Enterprise Organisations public Fashion and retail Sari UK public Delivery of organic fruit and vegetables Able & Cole public Retailing donated books, clothes, CD’s, DVD’s etc. Oxfam Shops public Marketing ethically produced chocolate Day Chocolate Company Businesses, public Telephone and communication services The Phone Co-Op Big business Recycling office furniture Green-Works Local government, business, public Kitchen units, door and window frames manufacture NewCo Business, public, other charities Training, manufacture, retail, recycling, employment creation Pecan Project Local government transport and recycling Ealing Community Transport Customer Service Organisation
    21. 21. OFFERING <ul><li>Ethical values </li></ul><ul><li>Environmental values </li></ul><ul><li>Commitment to the community </li></ul><ul><li>Skills retention </li></ul><ul><li>Multiple outputs </li></ul><ul><li>Work on the margins – excluded or marginal communities, unattractive markets, market trailblazers </li></ul>
    22. 22. MARKETING AND NETWORKING - 1 <ul><li>Use your ethical/social perspective to your advantage </li></ul><ul><li>General public, commercial and statutory support for this mode of operation </li></ul><ul><li>Specific interest from public sector in provision of public services </li></ul>
    23. 23. MARKETING AND NETWORKING - 2
    24. 24. MARKETING AND NETWORKING - 3 <ul><li>Use social enterprise value addition, meaning </li></ul><ul><ul><li>Relevant services due to closeness to beneficiaries and users </li></ul></ul><ul><ul><li>More responsive, dynamic and pro-active than traditional business models </li></ul></ul><ul><ul><li>Innovative service delivery models due to wider stakeholder engagement (similar to open source development model) </li></ul></ul>
    25. 25. MARKETING AND NETWORKING - 4 <ul><li>Use your status as a social entrepreneur to market your organisation, yourself and your vision </li></ul><ul><li>Martin Luther King said “I have a …” </li></ul><ul><li>Believe in the power of dreams, and others will follow </li></ul><ul><li>Heads, Hands and Hearts </li></ul>
    26. 26. MARKETING AND NETWORKING - 5 <ul><li>Heads: Back up your idea with solid figures </li></ul><ul><ul><li>Demonstrate the need </li></ul></ul><ul><li>Hearts: Appeal to the emotions </li></ul><ul><ul><li>Use stories and case studies to affect changes in attitude </li></ul></ul><ul><li>Hands: Be specific when you ask help </li></ul><ul><ul><li>It does not have to be financial, it could be a contract, access, speaking opportunity etc. </li></ul></ul>
    27. 27. POLITICAL IMPERATIVE <ul><li>Government push towards social enterprise as a delivery mechanism </li></ul><ul><li>Government push for voluntary and community organisations to reduce grant dependency </li></ul><ul><li>Grant making trusts also looking for “Exit” strategies </li></ul>
    28. 28. FUNDING BENEFITS <ul><li>Having even a partial self generated income stream tends to make it easier to get funding </li></ul><ul><li>Retain greater control over the projects </li></ul><ul><li>Ruralnet is a charity that set up a social enterprise. The SE now generates more in grant income than the charity. </li></ul>
    29. 29. LONG TERM <ul><li>Currently a lot of free support </li></ul><ul><li>Many people jumping on the band wagon </li></ul><ul><li>Will have to learn to pay for support </li></ul><ul><li>Will have to work hard at being competitive – not only commercial organisations but large charities and indifference poor knowledge from procurement officers </li></ul><ul><li>BECOME SUSTAINABLE </li></ul>
    30. 30. Contact details <ul><li>Red Ochre 020-7785-6295 </li></ul><ul><li>Uday Thakkar [email_address] </li></ul><ul><li>Robert Foster [email_address] </li></ul>

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