Social Enterprise an option to diversify your income stream

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Social Enterprise- an option to diversify your
income stream?

• Workshop leader Sheron Ferguson

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Overview of workshop

• Definition of Social Enterprise
• Key characteristics of Social Enterprise
• Types of Social Enterprise
• Income Categories
• Benefits and Difficulties of Social Enterprise
• Social Enterprise Development
• Useful sources of information and networks

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What is a Social Enterprise?
A social enterprise is a business 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. Office of the Third
Sector
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What is a Social Enterprise?
Social Enterprises stand out from the rest of
the social economy as organisations that use
trading activities to achieve their goals and
financial self-sufficiency. Social Enterprise
London
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What is a Social Enterprise?
A social enterprise is not defined by its
legal status, but by its nature its social aims
and outcomes, the basis on which its social
mission is embedded in its structure and
governance, and the way it uses the profits it
generates through its trading activities. The
Social Enterprise Coalition
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Social Enterprise key characteristics

• trading
• social aims
• independence of the organisation
• participation of its stakeholders
• reinvestment of profits back into meeting
• its social aims

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Exercise 1 Which of the following organisations
are Social Enterprises?

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Types of Social Enterprise

• Employee-owned businesses
• Community businesses
• Credit Unions
• Co-operatives
• Development Trusts
• Social Firms
• Social Businesses
• Intermediate Labour Market Companies

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Social Enterprise as an option

• Why charities might HAVE TO consider social
  enterprise activities
• Much of the statutory grant sector is becoming
  contract-driven as Government more and more
  outsources public services to the Third Sector
• Pressures on the Third Sector are seeing more
  and more charities looking seriously at
  supplementing grant funding and donations with
  earned income

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Income Categories
Healthy organisations need to develop a
broad-based income
 
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Individual Exercise
Income Categories What is the breakdown in
terms of income for your organisation in the
categories
 
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Exercise 2 What do you think are the
potential
a) benefits of an existing charity engaging in
Social Enterprise activity? b) difficulties of
an existing charity engaging in Social Enterprise
activity?
 
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Exercise 3
In what ways do you think these potential
difficulties can be addressed?
 
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Social Enterprise Development

• Clarify idea and get people on board create a
  team
• Innovate develop your seed idea with
  stakeholders
• and research your market
• Assess feasibility market, resources,
  cost-v-income,
• risk and funding
• Be realistic if it doesnt look feasible
  dont pursue it!
• Develop the business plan and funding strategy
• Pilot and evaluate
• Alls well? launch
• Evaluate and celebrate success!
• Continue to monitor and evaluate and adjust as
  needed

 
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Social Enterprise Development
One of the first things to be aware of when
thinking about setting up a social enterprise, is
that a social enterprise is not a legal entity in
itself. It is defined by what it does and how it
does it. However, in order to carry out any
trading activity, it must have some sort of legal
structure or identity.
 
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The main options for legal status available to
a Social Enterprise are
 
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Charities and Social Enterprise

• Charities Commission Publication CC35 - Trustees,
  trading and tax - How charities may lawfully
  trade
• It is important to be aware of Charities
  Commission restrictions on trading and the
  benefits
• Trading must be allowed within governing document
• Charities may not engage in trading which risks
  assets
• Primary purpose trading benefits from tax
  benefits including exemption from corporation
  tax, discretionary business rate relief and gift
  aid from trading subsidiaries

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Useful sources of information and networks for
Social Enterprises

• NCVO - The Sustainable Funding Project encourages
  and enables voluntary and community organisations
  to explore and exploit a full range of funding
  and financing options to develop a sustainable
  funding mix
• www.ncvo-vol.org.uk/sfp/
• The Finance Hub - making sense of finance and
  funding in the Third Sector www.financehub.org.uk
• Social Enterprise Coalition www.socialenterprise.o
  rg.uk

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Useful sources of information and networks for
Social Enterprises

• Social Enterprise London www.sel.org.uk
• Office of the Third Sector Social Enterprise
  Action Plan http//www.cabinetoffice.gov.uk/third_
  sector/social_enterprise/action_plan/
• Charities Commission publication Trustees,
  trading and tax How charities may lawfully trade
  
• http//www.charity-commission.gov.uk/publications/
  cc35.asp

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Useful sources of information and networks for
Social Enterprises

• Sources of finance
• Esmee Fairbairn Foundation www.esmeefairbairn.org.
  uk/
• Futurebuilders www.futurebuilders-england.org.uk
  
• Adventure Capital Fund www.adventurecapitalfund.or
  g.uk
• Charity Bank www.charitybank.org
• Community Development Finance Institutions
  http//cdfi.org

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Reference should be made toCharities
CommissionProfessional advisors (where
appropriate)The Red Foundation makes every
effort to ensure that information contained in
this presentation is up-to-date and accurate at
the time of being printed. However, legislation
is continually changing and all delegates are
encouraged to use the many published sources to
keep themselves abreast of new developments and
trends. These notes are not designed as a
stand-alone document but are intended to
accompany a facilitated programme of
training/workshop.