What Is Social Enterprise PDF Print Email

What is A Social Enterprise?

 

There is currently no legal definition of a Social Enterprise. Listed below are some definitions that can be applied to Social Enterprise.  Many organisations' governance and activities may fit one or more of these, but they may nevertheless choose to describe themselves as a community organisation or as a business rather than as 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 (Source - DTI 2002)
    • uses a business model to deliver its social aims, has no shareholders and invests all its profits back into the enterprise or community
    • is a commercially run, profit making organisation that is driven by social aims and the profits are reinvested into social, community or environmental objectives
    • operates like a business, produces goods and services for the market, but manages its operations and redirects its surpluses in pursuit of social and environmental goals

 

Social Enterprise has six key characteristics

1. Having a social purpose or purposes

2. Achieving a social purpose by, at least in part, engaging in trade in the market place

3. Not distributing profits to individuals

4. Holding assets and wealth in trust for community benefit

5. Democratically involving members of its constituency in the governance of the organisation

6. Being an independent organisation accountable to a defined constituency of beneficiaries and to the wider community

 

What is the Social Economy?

 

The Social Economy can be defined as the trading between Third Sector organisations and the private, public and voluntary sectors.

 A successful social economy can play an important role in helping deliver many key policy objectives by:

 

  • helping to drive up productivity and competitiveness
  • contributing to socially inclusive wealth creation
  • enabling individuals and communities to work towards regenerating their local neighbourhoods
  • showing new ways to deliver public services
  • helping to develop an inclusive society and active citizenship
  • allowing third sector organisations to be less grant dependent

One of the key aims of the Social Economy is to keep as much as possible of monies generated by the Third Sector within the Third Sector