A blog from our team on Social Enterprise Day 2023:
Hey, it’s Social Enterprise Day!
Well, it’s Thursday 16th November 2023 this year, to be precise – and it’s one more chance to celebrate Social Enterprise in Scotland following the highs of the recent Social Enterprise Awards, which had some truly inspiring nominees this year.
The day is about celebrating – but it’s also about Raising Awareness.
We recently attended the Social Enterprise Scotland annual conference – a great event with representatives from social enterprises, various agencies and funders, Scottish Government and local authorities, and TSIs like us – and raising awareness was a consistent issue discussed.
In helping social enterprise to navigate future challenges and opportunities there were calls for greater understanding of and engagement with Social Enterprise by:
- Scottish Government
- local authorities
- the private sector
- and the third sector – including TSIs like us.
We fully support these calls and think more needs to be done to make people across the board more aware of what social enterprise is and why it’s important.
Part of this lies in there not being one set definition of social enterprise (which in some ways is a good thing), but it’s not that complicated really.
So, what is Social Enterprise?
Social Enterprise is about a different way of doing business – of running private companies – to the benefit of people, communities or environment, rather than profit.
Various buzzwords such as “Social Economy” and “Wellbeing Economy” point to the central cause of social enterprise as seeking an alternative economic model to one purely focused on profit and growth.
But isn’t that just what charities do anyway?
Not really. Charities aren’t properly set up to trade competitively and lack the business agility of private enterprises. Their model is based on bringing in money from donations, not trading – although many are getting good at doing this (and there’s an argument that this sort of makes some of them border-line social enterprises…).
What’s the difference between a Social Enterprise and a normal business, then?
An individual social enterprise is a business that reinvests its profits into the community. As simple as that.
Some people would alter this definition to say that it’s any business with a social or environmental purpose – and in some cases, we’d accept that definition.
But the purest form of social enterprise is a business with a social or environmental purpose – that has an “Asset Lock” – which means the business can’t give away its assets, or profits, to directors or investors: it has to reinvest them into its social purposes, or give them away to the community in the event of closure.
(To answer a common question here: YES, YOU CAN STILL GET PAID!)
There are other types of organisation that still count, in certain important senses, as social enterprises. There are a lot of nuances to this and shades of grey…but let’s not get lost in the detail.
The most common form for asset-locked social enterprises to take is a Community Interest Company (CIC), though many larger social enterprises choose to take the form of being a registered charity and company limited by guarantee.
WHY SOCIAL ENTERPRISE MATTERS
The benefits that social enterprise offers society are obvious: reinvesting money spent by consumers for goods and services into local communities and good causes, rather than seeing it whisked away to line someone’s pockets is a good thing.
With our economy flagging it also represents another way to bring money into the service of important social issues or problems – when the funding that charities and the public sector have to deliver services is increasingly strapped.
It also goes well above the Joe Bloggs consumer on the high street – with Local and National Government, the Public and Private Sector, all looking for ways themselves to do business more ethically and responsibly, to do business with businesses who are going to bring added value by solving wider issues.
And – this is absolutely key – when the economy does pick up, if we have a strong, vibrant social economy teeming with well-connected social enterprises, who are doing business across sectors, across regions and borders, etc – we will be in a position to harness that opportunity and draw down significant profits to support the urgent causes thousands of social enterprises in Scotland are already working to solve.
It’s a no-brainer.
To date Scotland has been a world-leader in pioneering the Social Enterprise Model, for good reason. However, other countries are now catching up – and we need to do more to champion social enterprise, grow it and get it at the top of the, from the local high street to the corridors of power.
For further information on the support we can offer here at CVS Falkirk in setting up, establishing and running your social enterprise, please visit our dedicated Social Enterprise page, or check out our article for this year’s Social Enterprise Day.
Leave a Reply