Welcome to this …… module. These module resources have been developed by Sarah Stevenson from the Plymouth University.
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Essentially, Social Enterprises are commercial businesses, designed to make profit. The difference occurs with the profit, which is reinvested to meet the social aims of the business. There are many descriptions of Social Enterprises. It is important to understand that a Social Enterprise is not a legal structure
It is a misconception that Social Enterprise is a relatively new idea. Many long-established organisations qualify as Social Enterprises. Social Enterprise has been frequently found in the financial sector, including Mutuals and Friendly Societies. The Cooperative movement can be considered to be a major player in the field of Social Enterprise after providing benefits to members for many years.
In February 2010 the Social Enterprise Mark was launched as the brand for social enterprises. It requires a business to meet six defined criteria in order to qualify to receive the Mark. Many commercial businesses would consider themselves to have social objectives. Whether these objectives are central to the organisation determines whether they are indeed a social enterprise or a business with Social Aims
There are a number of significant differences between social enterprises and private enterprises, in both the way that they are developed and the way in which they continue to develop
The social enterprise movement is very diverse. In the UK, social enterprises can include:- Community Enterprises Credit unions Trading arms of Charities Employee-owned businesses Development Trusts Social Firms CICs Commercial business with a stated Social Purpose
There are increasing commercial opportunities for social enterprise where they may become ‘partners of choice’ in order for large organisations, both public and private sector, to demonstrate their social responsibility. Products and services offered by social enterprises may be aimed at markets quite aside from the areas in which they seek to offer social benefit. The products and services themselves may not contribute to achieving the stated social aims, but the profits generated will do so. Social enterprise has on many occasions been able to deliver results in areas of market failure for both public and private sector organisations.
If you are in a position where you are looking to develop your organisation into a social enterprise or start a new enterprise, there are a number of questions that need to be answered. Other modules in this series will look at a number of other themes that have a bearing on the development of a Social Enterprise, however they are not designed to replace business start-up advice that can be accessed from a number of support organisations. The culture, aspiration, resources, size, capacity and previous experience of your organisation will influence how you develop your social enterprise.
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Introduction to social enterprise
Social Enterprise Session 1Sarah Stevenson
Module Aims• to support the learner in identifying what makes constitutes a Social Enterprise and how they differ from other organisations• to facilitate exploration of the learners’ immediate and wider work context in order to promote professional developmentObjectivesBy the end of this session you will be able to:• Identify the key attributes of a Social Enterprise• Understand the diverse nature of businesses that operate as Social Enterprise• Contemplate the first steps needed to set up a Social Enterprise
What is a Social Enterprise?According to the Social Enterprise Coalition, SocialEnterprises are…“…businesses trading for social and environmentalpurposes. Social enterprises are distinctive becausetheir social and/or environmental purpose is absolutelycentral to what they do - their profits are reinvested tosustain and further their mission for positive change.”
What is a Social Enterprise?“We have described and keep on describingorganisations motivated by social objectives as non-profit organisations. We need to have anotherdescription: ‘non-loss ’organisations, because we don’twant to lose money and our objective is to address aparticular problem. So we are non-loss businesses withsocial objectives.”Muhammad Yunus. Founder of the Grameen Bank,Bangladesh
History of Social EnterpriseThe Social Enterprisemovement first emerged1840s. In Rochdale, a workersco-operative was set up toprovide high quality affordablefood in response to factoryconditions that were The Rochdale Society of Equitableconsidered to be exploitative. Pioneers est 1844In the UK, in the late 1990s, Social Enterprise started toreappear.
CharacteristicsSocial Enterprises:-• Operate as commercially run businesses• Aim to make profits• Generate the bulk of their income through sales of goods or services• Use good business practices and principles• Use the majority of their profits to further social or environmental goals• May hold the Social Enterprise Mark
Key DifferencesExplicit Social Private sector business primarily focus is on trading; socialAims (Triple enterprises too have a commercial focus but will also haveBottom Line) an explicit social and/or environmental purpose.Funding Social enterprises often have a complex composition of sales income, commercial contracts, service level agreements and grant support.Risk Social enterprises are usually governed by a Board of volunteers, which may mean that they are more risk averse in terms of pursuing business ventures.Scale Start up costs may be much higher because social enterprise usually has to operate on a scale that is large enough to sustain its social commitment from the beginning
Key DifferencesInvestment Social enterprises may have difficulty gaining access to traditional forms of investment such as loan finance.Leadership / Leaders of social enterprises are usually driven byEntrepreneurship the social potential of the venture and will need to find support for the other areas of the enterpriseStakeholders Social Enterprises usually have a wide range of stakeholders involved in their development, which can mean that there is a wide influence on the development process.Sweat Equity “sweat equity” is invested to grow and build the enterprise ,but the purpose is not financial gain but social
Who is a Social Enterprise? The Big Issue The Eden project Café Direct Fifteen Divine Chocolate Cooperatives UK Ethical Property Plc Green-works Activity Identify 2 local, 2 national and 2 international Social Enterprises and identify their social purpose
The Importance of Social EnterpriseCurrent government policy is to encourage thedevelopment of Social Enterprise with regards to the deliveryof public services in areas such as health, transport and leisure.Voluntary & Community Organisations are being encouragedtowards Social Enterprise where appropriate to help reducetheir dependency on grant fundingSocial enterprise achieve social benefits through standardbusiness practice & can help create strong and sustainablecommunities.Social enterprise is becoming the employer of choice
Developing a SocialEnterprise•Do you know why you are doing this?•Are you looking to sell a product or service to acustomer?•Have you identified who that customer is?•Do you know what the market rate is for theproduct or service?•Have you considered how you will convince thecustomer to buy from you rather than from yourcompetitors?•Do you know what success will look like?
ReferencesSocial Enterprise Coalition - www.socialenterprise.org.ukSocial Enterprise Mark - www.socialenterprisemark.org.ukThe Big Issue - www.bigissue.comCafé Direct - www.cafedirect.co.ukDivine Chocolate - www.divinechocolate.comEthical Property Plc - www.ethicalproperty.co.ukThe Eden Project - www.edenproject.com/Fifteen - www.fifteen.netCooperatives UK - www.uk.coopGreen-works - www.green-works.co.uk