Understanding Social Enterprises


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Understanding Social Enterprises

  2. 2. Overview of the social economy<br /><ul><li>Collection of organisations between the traditional private sector and the public sector (some times called ‘Third Sector’)</li></ul>Social Economy<br />Social Enterprise<br />Socially Resp.Business<br />Private Sector<br />Gov.<br />Charities<br />VCOs<br />
  3. 3. Why is the social economy important?<br />Job creation in new enterprises<br />Contributes to efficient competition <br />Offers potential for new forms of entrepreneurship<br />Meets new needs especially of marginalised communities<br />Favors local participation and voluntary work <br />Enhances solidarity and cohesion <br />Provides training and employment to disadvantaged communities<br />
  4. 4. Common Characteristics of Social Enterprises<br />Enterprise Orientation- directly involved in producing goods or providing services to market, part of third sector but characterised as more entrepreneurial and self financing<br />Social Aims- have explicit social aims such as job creation, providing goods or services.<br />Social Ownership- based on participation by stakeholder groups <br />(DTI- Strategy for Success & SE Coalition 2002)<br />
  5. 5. The accepted definition…<br />“……businesses 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”<br />DTI, 2002<br />
  6. 6. The Locus of social enterprise<br />Source: AMION Consulting 2001<br />
  7. 7. Types of Social Enterprises (1)<br />Employee-owned business : creates and preserves jobs<br />Co-operative : association of persons united to meet common economic and social needs through jointly owned enterprise<br />Social Firm : commercial enterprise that employs and trains disadvantaged or disabled people<br />Intermediate Labour Market Company: provides training and work experience for the long term unemployed<br />Community Business: social enterprise focusing on local markets and services<br />
  8. 8. Types of Social Enterprises (2)<br />Charity Trading Arm: enable charities to meet their objectives in innovative ways<br />Social Business: not-for-profit business, supports the work of a charity or non-governmental organisation<br />Credit Union: provide access to finance<br />Development Trust: focus on community based regeneration<br />Housing Association: provides social or low cost housing to people in need<br />
  9. 9. Characteristics of Social Enterprises<br />Social Enterprises:<br />9<br />© Third Sector Enterprise Ltd (3SE) 2006<br />
  10. 10. So where do they fit?<br />Socially Responsible Businesses<br />Charities & Voluntary Sector<br /> Government<br />Private Sector<br />Social Enterprises<br />‘The Social Economy’<br />Income from Sales<br />Grants<br />Taxes<br />Private Goals<br />Social Goals<br />Political Goals<br />Source : Social Firms Scotland<br />
  11. 11. Challenges faced by Social Enterprises<br />Social enterprises have to compete in the commercial market and face the same challenges and risks as more traditional businesses. <br />To succeed in competitive markets, social enterprises need to be as good as, if not better than, traditional businesses working to a purely financial bottom line.<br />One needs to use entrepreneurial drive to achieve social and/or environmental and financial aims without relying on grants to succeed. <br />However, one’s independence will help to avoid excessive bureaucracy and allow one to change and innovate more quickly. <br />Success can bring reasonable financial remuneration, but also an interesting and fulfilling business career.<br />
  12. 12. Summary<br />Social Enterprise are Enterprising, deliver Social good, work towards Sustainability<br />They provide:<br />goods and services in underserved markets and communities<br />alternative models of public service delivery <br />‘ethical’ goods and services<br />goods and services to private businesses and consumers<br />
  13. 13. Summary<br />Accountable to their membersandstakeholders<br />Usetrade to achieve Social Aims (e.g. job creation, training, capacity building, address social exclusion) <br />Doubleor Triple Bottom LineAccounting<br />Provide goods or services in response to community need<br />Profits (surpluses) are reinvested in the enterprise / communityto enable the achievement of Social Aims<br />Operate as businesses to ensure long term viability and sustainability<br />
  14. 14. Social Enterprise Success Stories<br />http://www.youtube.com/watch?v=jk5LI_WcosQ<br />
  15. 15. Social entrepreneurs are not content just to give a fish, or teach how to fish. They will not rest until they have revolutionized the fishing industry.<br />- Bill Drayton (Ashoka)<br />