There are 55,000 social enterprises in the UK, with a combined turnover of £27bn annually. Yet according to the government, only one in four people in Britain knows what a social enterprise is.
They are businesses trading for a social purpose. That purpose could be social, environmental or both, but profits made are ploughed back into the business. It's business with a conscience.
The first social enterprises were cooperatives. They grew up in the 19th century centred on the provision of food and housing. After some very public failures - such as the Scottish Daily News in the 1970s and Triumph Motorcycles in the 1980s - cooperatives gained a bad name, and by the end of the 1980s, the talk was all about social enterprise. But the principle remained the same.
Today, social enterprises are springing up all over the UK and in various guises: from care homes to football clubs (Telford United), and construction companies. Among the most well-known ones are Jamie Oliver's Fifteen restaurants, the Eden Project and the Big Issue.
The government's Office of the Third Sector recently announced several Social Enterprise ambassadors, including Tim Smit of the Eden Project, who are to spread the message that this kind of entrepreneurship is good for business, as well as highlight the opportunities of social enterprises.
The government published its Social Enterprise Action plan last year, boasting of a forthcoming increase in funds for the sector. In 2007-08, £500,000 was given to the regional development agencies to improve the performance of these businesses through local support and advice. This figure will rise to £1.8m in the next few years. A further £10m has been earmarked to invest in individual social enterprises. The government is trying to create the conditions for social enterprises to succeed.
Creating social value
This month, the London Development Agency will host a one-day conference on how to develop London's leadership status in social enterprise. In November, Social Enterprise Day takes place as part of Enterprise Week. Organised by the Social Enterprise Coalition (SEC) and Enterprise Insight, it will invite organisations to put on events to raise their profile.
Jonathan Bland, the chief executive of the SEC, says the government's burgeoning interest is because "social enterprises are a way of creating wealth and opportunity in areas where pure market forces are failing".
But for the 55,000 social enterprises out there, economics is not the only issue. Putting something into the community and making a difference to the environment features as strongly. Importantly, social enterprises can engage and empower a local community. For other social businesses, being reliant on grants can be more hardship than help. "A lot of people are wanting to find sustainable ways of doing things, and not just relying on grants and philanthropy," says Bland.
Bill Ferris, the chief executive of Historic Dockyard Chatham and the chairman of the Association of Independent Museums (AIM), realised about four years ago that social enterprises had begun to feature on the government's radar.
He says that museums, particularly independents, have been working as social enterprises from the beginning: "The raison d'etre of social history, community museums and industrial heritage has always been about the community. Museums ought to be well ahead of the game."
Unfortunately, Ferris adds, some museums haven't quite got the idea yet. "Some have not moved beyond the semi-dependency culture of expecting a grant because they are a museum," he says. "Culture cannot be funded anymore simply because it is a good thing." This year's AIM conference picked up on the benefits and challenges for the social entrepreneur.
In April, the Museum of East Anglian Life set up Abbot's Hall Enterprises. The social enterprise, which is a separate trading company, produces plants, flowers and vegetables to sell in the new farm shop on the premises. The idea for the social enterprise came from Angus McFadzean, the estate manager at the museum.
McFadzean wanted to consolidate the work the museum does with socially excluded people and to provide a more structured approach to skills development and training. Before the social enterprise began, the museum attracted between 50 and 80 volunteers. Within six months, the figure had risen to between 80 and 100.
Volunteers at the museum include prisoners on probation and people with learning difficulties. The skills training has, on occasion, led to employment.
Tony Butler, the director of the museum, says the social business was set up because it helps people with special needs and brings money in. But the idea of voluntary and charitable bodies looking to social enterprises to move away from the dependency on local and government funding may be unrealistic.
Abbot's Hall expects to bring in an income of £12,000 in its first year and hopes to break even within three. "I don't think it is realistic to expect the enterprise to be making a mint," says Butler. "We are dealing with some of the most vulnerable members of society, and I think it is reasonable to expect that this work requires some form of public subsidy."
At Chatham Historic Dockyard, Ferris says one of the most important things to achieve sustainability is to provide the services that people want. On the dockyard site, there are 120 businesses and 112 homes. Ferris likens it to "running a small town or village".
There are also services on offer that will never make a profit, but have vital social benefits. The ropery, for example, covers its own costs, and has added value by keeping a traditional craft alive and training youngsters, while also being a visitor attraction.
Identify your strengths
Ferris also believes that as social enterprises become more popular and successful, some regulation may need to be introduced.
Bev Meldrum is a partner in the Tool Factory, a company that designs software for social enterprises, and runs the social enterprise course for the cultural sector at City University, London. She agrees that some museums have been social enterprises from early on, but says, "The challenge now is how to be even more clever and build on that."
She adds that a museum shouldn't make the mistake of thinking that it must have a shop and cafe just because all the others have. "If it is going to take resources away from what you are excellent at, then think again," says Meldrum.
She says there could be opportunities for museums in health and social care enterprises, or using a social enterprise for educational purposes. The government's Social Enterprise Action Plan has stipulated that from 2008, social enterprises will become part of the national curriculum and there is an indication that it might become part of the GCSE business studies course.
Ferris says: "Being a social enterprise is more an approach to doing business, than a construction or a formal way of working." Becoming savvy at this could make all the difference in winning funding from local authorities.
"Social enterprises say that we are museums and provide a range of services that meet your agenda as a local authority," he adds. "[It shows] that we are selling a service, rather than just asking for money."
They are businesses trading for a social purpose. That purpose could be social, environmental or both, but profits made are ploughed back into the business. It's business with a conscience.
The first social enterprises were cooperatives. They grew up in the 19th century centred on the provision of food and housing. After some very public failures - such as the Scottish Daily News in the 1970s and Triumph Motorcycles in the 1980s - cooperatives gained a bad name, and by the end of the 1980s, the talk was all about social enterprise. But the principle remained the same.
Today, social enterprises are springing up all over the UK and in various guises: from care homes to football clubs (Telford United), and construction companies. Among the most well-known ones are Jamie Oliver's Fifteen restaurants, the Eden Project and the Big Issue.
The government's Office of the Third Sector recently announced several Social Enterprise ambassadors, including Tim Smit of the Eden Project, who are to spread the message that this kind of entrepreneurship is good for business, as well as highlight the opportunities of social enterprises.
The government published its Social Enterprise Action plan last year, boasting of a forthcoming increase in funds for the sector. In 2007-08, £500,000 was given to the regional development agencies to improve the performance of these businesses through local support and advice. This figure will rise to £1.8m in the next few years. A further £10m has been earmarked to invest in individual social enterprises. The government is trying to create the conditions for social enterprises to succeed.
Creating social value
This month, the London Development Agency will host a one-day conference on how to develop London's leadership status in social enterprise. In November, Social Enterprise Day takes place as part of Enterprise Week. Organised by the Social Enterprise Coalition (SEC) and Enterprise Insight, it will invite organisations to put on events to raise their profile.
Jonathan Bland, the chief executive of the SEC, says the government's burgeoning interest is because "social enterprises are a way of creating wealth and opportunity in areas where pure market forces are failing".
But for the 55,000 social enterprises out there, economics is not the only issue. Putting something into the community and making a difference to the environment features as strongly. Importantly, social enterprises can engage and empower a local community. For other social businesses, being reliant on grants can be more hardship than help. "A lot of people are wanting to find sustainable ways of doing things, and not just relying on grants and philanthropy," says Bland.
Bill Ferris, the chief executive of Historic Dockyard Chatham and the chairman of the Association of Independent Museums (AIM), realised about four years ago that social enterprises had begun to feature on the government's radar.
He says that museums, particularly independents, have been working as social enterprises from the beginning: "The raison d'etre of social history, community museums and industrial heritage has always been about the community. Museums ought to be well ahead of the game."
Unfortunately, Ferris adds, some museums haven't quite got the idea yet. "Some have not moved beyond the semi-dependency culture of expecting a grant because they are a museum," he says. "Culture cannot be funded anymore simply because it is a good thing." This year's AIM conference picked up on the benefits and challenges for the social entrepreneur.
In April, the Museum of East Anglian Life set up Abbot's Hall Enterprises. The social enterprise, which is a separate trading company, produces plants, flowers and vegetables to sell in the new farm shop on the premises. The idea for the social enterprise came from Angus McFadzean, the estate manager at the museum.
McFadzean wanted to consolidate the work the museum does with socially excluded people and to provide a more structured approach to skills development and training. Before the social enterprise began, the museum attracted between 50 and 80 volunteers. Within six months, the figure had risen to between 80 and 100.
Volunteers at the museum include prisoners on probation and people with learning difficulties. The skills training has, on occasion, led to employment.
Tony Butler, the director of the museum, says the social business was set up because it helps people with special needs and brings money in. But the idea of voluntary and charitable bodies looking to social enterprises to move away from the dependency on local and government funding may be unrealistic.
Abbot's Hall expects to bring in an income of £12,000 in its first year and hopes to break even within three. "I don't think it is realistic to expect the enterprise to be making a mint," says Butler. "We are dealing with some of the most vulnerable members of society, and I think it is reasonable to expect that this work requires some form of public subsidy."
At Chatham Historic Dockyard, Ferris says one of the most important things to achieve sustainability is to provide the services that people want. On the dockyard site, there are 120 businesses and 112 homes. Ferris likens it to "running a small town or village".
There are also services on offer that will never make a profit, but have vital social benefits. The ropery, for example, covers its own costs, and has added value by keeping a traditional craft alive and training youngsters, while also being a visitor attraction.
Identify your strengths
Ferris also believes that as social enterprises become more popular and successful, some regulation may need to be introduced.
Bev Meldrum is a partner in the Tool Factory, a company that designs software for social enterprises, and runs the social enterprise course for the cultural sector at City University, London. She agrees that some museums have been social enterprises from early on, but says, "The challenge now is how to be even more clever and build on that."
She adds that a museum shouldn't make the mistake of thinking that it must have a shop and cafe just because all the others have. "If it is going to take resources away from what you are excellent at, then think again," says Meldrum.
She says there could be opportunities for museums in health and social care enterprises, or using a social enterprise for educational purposes. The government's Social Enterprise Action Plan has stipulated that from 2008, social enterprises will become part of the national curriculum and there is an indication that it might become part of the GCSE business studies course.
Ferris says: "Being a social enterprise is more an approach to doing business, than a construction or a formal way of working." Becoming savvy at this could make all the difference in winning funding from local authorities.
"Social enterprises say that we are museums and provide a range of services that meet your agenda as a local authority," he adds. "[It shows] that we are selling a service, rather than just asking for money."
