Social enterprises have been in existence for quite some time, with the first of these in the UK being mutual societies and co-operatives. In more recent years, the social enterprise has enjoyed a surge in popularity as more and more social and environmental entrepreneurs choose to establish businesses that directly help communities, disadvantaged groups and the environment. You can find some interesting statistics about social enterprises in the UK by watching the short video attachment to this post. Fiyaz Mughal OBE has been instrumental at the highest levels in terms of establishing social enterprises both within the UK and overseas. Fiyaz Mughal is currently the director of Faith Matters, a social enterprise he founded with the aim of working on reducing extremism and facilitating interaction and discourse between those of different faiths. Fiyaz Mughal has previously founded several other organisations including Tell MAMA, an independent monitoring service for reporting anti-Muslim abuse in the UK and establishing support for victims.
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What is a Social Enterprise?
With social enterprises, the primary purpose for existing is a specific social or environmental objective. A social enterprise will have a clear and specific social or environmental mission that will be set out in its governing documents. The majority of income will be generated through trade, while the majority of profits will be ploughed directly back into the business or related projects.
Who Starts Social Enterprises?
Social enterprises are generally started and run by people who want to make a real difference in the world, in their local communities and to the environment. Founders and leaders are motivated by the drive for real change and are mould-breakers, often breaking down established business patterns and models in order to achieve explicit goals. While social enterprises must naturally compete in today’s market alongside other businesses, making money for founders and shareholders is not at the heart of the model. Most profits will be continually reinvested. Some are founded by individuals or groups seeking to meet specific needs, others emerge from organisations within the voluntary sector and yet others are created by local authorities outsourcing.
Social Enterprises, Charities and Ethical Businesses: What’s the Difference?
There can be lots of similarities between social enterprises, charitable organisations and ethical businesses, but there are also differences. Many charities that generate most of their income through the trade or sale of goods or services are actually already social enterprises, just with charitable status. To turn a charity into a social enterprise requires a re-evaluation of income-generation practices to focus more on trade than donations and grants. The difference between a social enterprise and an ethical business is less to do with how income is generated and more to do with core values. Social enterprises are established specifically to achieve a certain goal related to society or the environment and everything is geared towards that objective. Ethical businesses do try and minimise any negative effects they have on society and the environment, but this is not the central objective of the business.
What Social Enterprises Might I have heard Of?
There are many social enterprises in the UK and some are big names that almost everyone has heard of. The Big Issue is one example, as is the Fifteen restaurant chain established by well-known celebrity chef Jamie Oliver. Café Direct, Divine Chocolate and The Eden Project are all social enterprises as well. The Co-operative supermarket is another well-known example.
How Can I Start a Social Enterprise?
There are several ways in which a social enterprise can be started using a variety of legal structures. Until quite recently, most would either be the industrial and provident society or the company limited by guarantee. The Community Interest Company (CIC) is a new legal structure that is making it easier than ever before to start a social enterprise. While still in their early days, CICs offer a straightforward, relatively cheap and easy way to establish a social enterprise that is becoming increasingly attractive. You can find out more about how to set up a Community Interest Company by clicking on the PDF attachment.
Social Enterprise UK
Social Enterprise UK is the leading social enterprise global authority, having led public policy for fifteen years. As the largest network of social enterprises in the UK, Social Enterprise UK is the membership body with the biggest commitment to social procurement in the world, through the Buy Social Corporate Challenge. Members not only include social enterprises but also a wider network of charities, businesses and organisations from the public sector. By joining Social Enterprise UK, these entities demonstrate a commitment to supporting a vision of choosing social enterprise as the main way of doing business on a global level.