Social enterprises mean big business

Social enterprises are playing a key role in the provision of public services, with over a third deriving at least half of their income through contracts with local councils and Whitehall, according to a survey published yesterday.

Both the Conservatives and Labour are keen for social businesses to provide more public services, to tap into their reputation for innovation, flexibility and success in working with deprived communities.

Last week, Tory leader David Cameron promised to outsource social programmes in poorer areas to social enterprise in the case of his election next year.

The Social Enterprise Coalition’s survey claims to be the largest of its kind and is based on phone interviews with 962 senior figures in social enterprise. It estimates there are 62,000 social enterprises in the UK, and purports to be the most comprehensive look at the size, structure, motivations and prospects of the sector.

Among its findings are:

– Women have more leadership positions in social enterprises than other parts of the economy. Some 41% of all board members are women, compared to 11.7% in FTSE 100 companies and 4.9% in smaller listed private companies. Women lead 26% of social businesses, compared to 14% of small private businesses;

– Most social enterprises are small to medium size, with an average turnover of £2.1m, and work in defined local areas, although one in 10 operate on a national scale with turnover of up to £100m

– They are proving resilient in the recession, with more than 80% saying they are making a profit or breaking even, and almost half confident of future growth, despite problems in raising finance and getting tailored business support.

Social businesses differ from conventional firms in that they operate a “double” bottom line – social and environmental value as well as profit – with many companies reinvesting profits into expanding or providing new services.

Claire Dove, chair of the Social Enterprise Coalition, says in a foreword to the survey: “The survey demonstrates what those of us in social enterprise have always believed, but can now demonstrate with evidence: social enterprises are a growing sector of profitable businesses, distinct from both private business and the voluntary sector, and agents for positive change defined by their social and environmental missions.

“We also learned that they are bucking the trend in the midst of the recession, are focused on giving people meaningful work, and first and foremost work for their communities.”

Source: www.guardian.co.uk