In 2007 a YouGov poll found that over 60% of the British public would prefer their local services to be run by a social enterprise – instead of private profit businesses, the government or traditional charity.
Social enterprises are businesses trading for social and/or environmental purposes. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social and/or environmental purpose is absolutely central to what they do.
So now you’re probably asking “what is the difference between a Social Enterprise and Ethical Business?” The answer is this. The two are distinct business models although an ethical business will try to achieve its financial goals while trying to minimise any negative impact on the environment or society. They always aim to adhere to acceptable standards of professional behavior. Where as a Social Enterprise’s main purpose is to fulfill its environmental or social goals. Some times both. This is achieved by reinvesting the majority of its profits back into the business – reinvested to sustain and further their mission for positive social change.
As with all businesses, a Social Enterprise will compete to deliver goods and services. The difference is that social purpose is at the very heart of what they do, and the profits they make are reinvested towards achieving that purpose. Social enterprise has proven successful for many organisations in the tertiary sector that have expertise in specific areas, and great understanding of the groups they represent. They understand how services should be delivered to best meet peoples’ needs, both customer and community. Involving customers, staff and service users in designing services, they gain a moral edge over competitors. The government defines social enterprises as “businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.” Yet it is always very important for social enterprises to make a profit. They need to make a profit to compete in the market, to ensure their continued survival and to invest in their social or environmental aims. The requirement to manage this ‘multiple bottom line’ – financial, social and environmental – can result in unique challenges.
However, the ability to bring about positive change to people and communities can be enormously satisfying. As a case study in the success of Social Enterprise operating and successfully managing a ‘multiple bottom line’ we need to look at the internationally recognisable brand “Ben & Jerry’s Ice Cream”. As a company their mission statement is clear and dedicated to social and environmental improvement, locally and globally. Founded on a concept of sustainable corporate prosperity, their three tired mission statement includes;
Product Mission: To make, distribute and sell the finest quality all natural ice cream and euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment.
Economic Mission: To operate the Company on a sustainable financial basis of profitable growth, increasing value for our stakeholders and expanding opportunities for development and career growth for our employees.
Social Mission: To operate the company in a way that actively recognizes the central role that business plays in society by initiating innovative ways to improve the quality of life locally, nationally and internationally.
“Underlying the mission is the determination to seek new and creative ways of addressing all three parts, while holding a deep respect for individuals inside and outside the company and for the communities of which they are a part.”
They strive to minimize the negative effect that they have on environment. All of this is achieved through a system of Social Enterprise and reinvested profit. And according to the Global Reporting Initiative (GRI) for 2009 Ben and Jerry’s revenue was between $200 and $500 million.
The Skoll Foundation defines a social entrepreneur as “society’s change agent: a pioneer of innovation that benefits humanity.”
Social enterprises operate in almost every industry in the UK, from health and social care to renewable energy, from retail to recycling, from employment and training to marketing & advertising, from housing to education. They have statistically shown and repeatedly been proven to be a positive and productive business model, especially for small to medium enterprises. The State of Social Enterprise Survey, released November 2009 found that despite the recession, social enterprises are twice as confident of future growth as typical SMEs, with 48% of social enterprises responding positively as opposed to just 24% of SMEs. Additionally, since the economic downturn began, 56% have increased their turnover from the previous year whilst less than 20% have seen it go down. This is a considerably better performance than SMEs in the UK, where only 28% increased their turnover and 43% saw it go down.
Further Social Enterprise seems be challenging and breaking the glass ceiling. 41.1% of all board members are women, compared to just 11.7% of board members in FTSE 100 companies and 4.9% in AIM-listed companies. Additionally 26% of social enterprises could be described as ‘women-led’ – almost twice as many compared to small businesses (26% compared to 14%). (2005-2007 data from the Annual Survey of Small Business UK).
As it stands Social Enterprise is clearly a winning formula, a constant source of business growth and employment opportunities. Driven by their social or environmental purpose, there are over 62,000 of them in the UK, contributing over £24bn to the economy and it is estimated that social enterprises employ about 800,000 people and that number is growing. According, also, to YouGov of a group of 2,000 people surveyed and asked what kind of company they would like to work for. A clear majority, 30%, picked Social Enterprise, with only 16% of respondents saying they would like to work for a traditional business, 13% choosing a government institution and 13% a traditional charity.
The best way to get involved is to look into your local business communities for Social Enterprises and give them your custom. Support them and Support positive change.
There is a definite buzz around Glasgow this week. Glasgow is taking part in Social Media Week (SMW) which is a global platform that connects people, content, and conversation around emerging trends in social and mobile media. The event is being held this week in 11 cities around the world
