The resilience of Social Enterprises

The resilience of Social Enterprises


Ben Higham talks to some survivors about opportunities and challenges.


Photo courtesy of Sunnyside Rural Trust

The last four years have seen a challenging economic environment for many businesses. A recent consultation with some social enterprises revealed a fascinating range of experience and response describing a variety of perspectives and approaches to these testing times.

The most consistent message is one of increased commitment to the social benefit purposes of these very different organisations. A common stubborn belief, borne out by the reality of ever reducing central and local government investment in welfare, physical and mental health services and employment and training, that the people who benefit from these social enterprises need their support even more than before, and in greater numbers.

A key aspect of responses has been the potential to develop significant contract income in order to grow and diversify the business. In some cases the prospect of such income has enabled some capital and capacity building investment to be secured. This has been a particularly successful strategy where there is an existing statutory service demand or expectation that a more cost efficient entity might continue, either as a spin out or an associated provider.  For some grasping such opportunities has been a stepping-stone to a much more diverse income stream enabling a range of linked services - for instance expanded employment and training supporting increased retail and catering outlets - suggesting a comforting financial balance. For others significant contracts can provide vital income and investment but the level of dependence could prove a risk.

For some enterprises, particularly those organisations that have an established track record of impact and success in a particular niche, dramatically increasing the size of the organisation is a significant challenge to the quality of experience for their beneficiaries. Such organisations will recognise the current demands of commissioners and funders who want 'a lot more for their money (when they do pay)' insisting on greater evidence of impact, and consequently administration and effort, that could, and some say does, detract from and distorts a more responsive beneficiary-focused approach.

A range of challenges came up in the discussions. Significant to maintaining contracts in the context of spin outs is a recognition that the creation of the new organisation can represent a significant loss of expertise and knowledge to the local authority, a loss of valuable professional memory if you like, and this may have a particular impact in the area of informed commissioning priorities and decisions in the future.

Coping with change was also identified as a challenge. The most prepared (and probably best resourced) had invested a lot of time in preparation for a spin out that had proved valuable for the development of a considered vision and strategy for the organisation and a recognition of a realistic expectation by the local authority. Expectations of growth as a crude measure to justify continued existence are also a great concern. The experience of pursuing contracts and investment evoked frustration over a perception of the simplistic expectations of commissioners and investors that expansion leads to greater viability and cost effectiveness. These demands of 'more for less' suggest a desire for quantity over quality and present a challenge to organisations unable or unwilling to grow because they believe that quality will be compromised. Securing investment to continue rather than significantly change or increase a valuable service does seem almost impossible in these circumstances.

Finally, when considering changing perceptions of ethical business and the value of a social enterprise identity to customers, clients, commissioners, investors and so on the responses were quite varied.  For some their identity as a social enterprise expressed their values and mission and they believe that their customers (generally not beneficiaries) and commissioners appreciated this understanding as a key added value. Whilst emphasising that the quality of service and product was key one view was that 'we trade on abilities not disabilities' and another made it clear that their marketing emphasised 'buying a product .. and supporting disadvantaged people'.

Others see the social enterprise identity as confusing for their customers (who are generally beneficiaries) and they 'still think of us as a charity with social aims'. One revealed a frustrating process of trying to convince funders to recognise their particular case and suggested that 'people see (social enterprise) as a scam'. One final comment on shifting perceptions of ethical business suggested that the proposition of the Big Society, as promulgated by government, has led to a 'willingness to accept the fact that
faith-based groups achieve far more in terms of outcomes and changed lives than
secular ones do'.

I look forward to your letters ……..

Realise Futures -

Sunnyside Rural Trust -

Andy's Ark -

Lighthouse Furniture Project -