Supporting Social Enterprise in Herefordshire Shropshire and Worcestershire.
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What is a Social Enterprise?
A social enterprise is a business with a social purpose. Social enterprises include local community enterprises, social firms, mutual organisations such as co-operatives, and large-scale organisations operating nationally such as the Eden project in Cornwall and the Big Issue Magazine. Examples of successful social enterprises in the three counties include Whitbourne Community Shop, Halo Leisure, Oak Farm, Hope Family Centre.
Whatever the size, origin or nature of social enterprise, it will be pursuing one or more of the following activities:
- Offering social or environmental goods and services (for example recycling or childcare)
- Trading to improve (or cross-subsidise) social or environmental goods and services (for example the trading arms of charities) and
- Using processes or ways of working that have a significant social benefit, (for example co-operatives, social firms and fair trade organisations).
Social enterprises meet three key tests:
PURPOSE: have a social purpose or objectives, and are accountable to external
Stakeholders
FORM: have an appropriate legal form (e.g. community interest company, industrial
and provident society, company limited by guarantee)
MONEY:
a) returns any surpluses generated to benefit their social activity, or to their
constituent stakeholders, or to another social purpose; OR
b) more than 50% of their income is earned (including contracts for services
but not grants)
Social enterprises are similar in many ways to regular commercial businesses and
community/voluntary organisations, however because they seek to balance economic sustainability with a social purpose they face particular challenges and display particular characteristics.
Research shows that successful social enterprises:
- Gain independence and autonomy through trading
- Display entrepreneurial, innovative risk-taking behaviour
- Adopt flexible and adaptable practices
- Maintain a customer and community focus
- Engage stakeholders
- Adopt a democratic and participative management style
- Deliver socially and/or environmentally as well as financially
- Remain financially viable, gaining their income from selling goods and services.
Their key differences from regular commercial business are their drive for social
change, governance and stakeholder accountability i.e., directly accountable to
stakeholders, users, funders, partners, communities - rather than shareholders. Their key differences from community and voluntary organisations are their commercial activity and entrepreneurial nature. Whilst they seek to be sustainable businesses, generating income, their driving motive is more than just for profit.