Is social enterprise a charity? Social enterprises are businesses that aim to tackle social or environmental problems, improve communities or people’s livelihood. They trade like commercial businesses however their surplus is reinvested into the business for community benefit. Social enterprises are set-up to create positive change in the community they operate in. Charities are non-profit businesses who aim to ‘aid’ communities and not ‘trade’.
Social enterprise is not a new paradigm, in fact, it has existed for many years. The pioneers of social enterprise can be traced to Rochdale in the 1840s where a worker’s co-operative was established to provide high quality and affordable food in response to factory conditions that were considered to be exploitative (Social Enterprise UK, 2014). The evolution began in the 90s when different interest groups like enterprising charities, co-operatives, community enterprises and social businesses united in the hope of doing business for social change.
Social enterprise WHY?Why should anyone set-up a business for the purpose of not making profit? Let’s just say someone or group of individuals have to take the lead to tackle problems many communities face as the austerity measures tightens. Although social enterprises are not immune to the economic downturn, research has shown that they are largely concentrated in the most deprived communities. Social Enterprise UK report (2013) revealed that, 38% of all social enterprises work in the most deprived 20% of the communities in the UK, 58% reported growth in 2011 and 57% predicted growth in 2013. The more deprived the community, the more likely a social enterprise will be established there. Evidently social enterprises are on the rise, there is an estimated 70,000 operating across different sectors and regions in the UK (Social Enterprise UK, 2013). The rise offers an opportunity to strengthen communities by improving standard of living, creating employment opportunities, supporting vulnerable people (including children and young people), improve health and wellbeing, protecting the environment, promoting education and literacy and addressing social exclusion.
Social enterprises have also helped to break down barriers in many areas of employment. For instance, 38% of social enterprise leaders are women and only 9% of social enterprises have male only leadership teams. 15% of social enterprises are from Black, Asia, Minority Ethnic communities (BAME) and 28% of the leadership teams have BAME directors. Equally important, social enterprises employ people who are at a disadvantaged- ex-offenders, disabled people or long-term unemployed (Social Enterprise UK report, 2013).Social enterprise WHO?
Who can set-up a social enterprise? Anyone with a clear social and/or environmental mission can set up a social enterprise. However, the mission must be clearly defined on how the business will operate to meet its aims- through trading, community inclusion and reinvesting profits back into the business.
There are a number of social enterprises who have made significant changes through their services over the years- The Eden Project, The Big Issue, Jamie Oliver's restaurant Fifteen, Divine Chocolate, a fair trade chocolate company co-owned by the cocoa farmers’ cooperative KuapaKokoo in Ghana and Timewise, which connects professionals with flexible employment opportunities. Other emerging social enterprises are Eighteen Forever, a fashion design company set-up to create employment opportunities and promote diversity in fashion and Jekkah Clothing a social enterprise fashion brand from The Gambia.
Social enterprise HOW?
How can I set-up a social enterprise? First, you need to do some research about your mission and funding available specifically to social enterprises. You can contact Social Enterprise UK for advice or read through their FAQs for useful information. There are a number of School for Social Enterprises across the UK that would be of use to you, I advise you to contact them and seek guidance.
Social enterprises tackle community problems through social and/or environmental objectives. They are on the rise but not immune to the economic headwinds. Unlike commercial enterprises, they are managed and led by people as diverse as the communities they serve.
Social Enterprise UK (2013) The People's Business [online] http://www.socialenterprise.org.uk/
Author: Sally Kah