What is a social enterprise?

PROFIT + SOCIAL PURPOSE = SOCIAL ENTERPRISE

A social enterprise is first and foremost a business that has a social purpose.

 

Profit

Profitability is important for sustainability, and the reason social enterprises seek to make a profit is to reinvest to achieve their social purpose. Unlike other businesses, profit is the fuel for the journey, not the destination. For social enterprises, the social and environmental objectives are their reason for being.

 

Social enterprises aspire to make a profit, but it's what happens to that profit that distinguishes a social enterprise from other businesses. With the exception of a Community Interest Company Limited by Shares, where some profit distribution is allowed, and some co-ops - all profits are re-invested in the company or the community.

 

Social Purpose

The social purpose of a social enterprise is key, and can be defined in a number of ways, including: 

 

Closeness to the community: Social enterprise is not a quick or easy new solution to old problems but, by harnessing untapped resources in communities, they can sustain products and services that private businesses cannot easily make profitable.

Most social enterprises are rooted in the communities they service, commanding strong and trusted relationships with sections of the community often regarded (by outside agencies) as 'hard to reach'. Reaching the parts other providers cannot gives a route by which such groups can then access mainstream services.

 

Added value: Social enterprises often locate where need is greatest - rural locations and areas of urban disadvantage - going the extra mile to offer products and services for individual and community benefit.

 

Inclusion and empowerment: Social enterprises employ people traditionally excluded from jobs by their ability, age, and other barriers. These staff members often also have direct influence over how the organisation is run, sometimes at director level.

 

Resilience: Where social enterprises combine good business practice, with a clear focus on customer need and closeness and accountability to the wider community, they compare very favourably with small businesses in the private sector on growth and business confidence.

 

What do social enterprises do?

 

Social Enterprise East of England (SEEE) is a richly diverse network with members of all sizes operating across the economy - from health and social care, to transport, retail, housing and recycling, to sport, leisure and the arts.

 

The smallest members may have only part-time staff, relying on a cohort of volunteers and/or trainees to develop the business, while one of the largest of SEEE members operates in the retail sector employing 3,000 staff and a turnover of £300M.

 

A SEEE member trailblazing the externalisation of health service provision is Anglian Community Enterprise CIC (Community Interest Company) in Clacton-on-Sea which transferred out of the NHS on January 1st 2011, with 1,082 staff and a budget of £35M to provide 40 service lines.

 

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