Governmental influences on Social Enterprise (1)

As well as reading books and journals by independent sources I also find governmental publications extremely interesting when looking at the outlook and future plans for social enterprise. The UK government focuses very much on using social enterprise as a ‘force for change’ by this they mean social enterprises investing into the communities, they very much notice the need not just for small ‘village shop’ type enterprises but also large multi national companies with large turnover investing into the community. Social enterprises currently have an overall turnover of around £27billion and contributing more than £8billion to the GDP each year. This fact alone proves that social enterprise is not just a fad or an unfeasible idea but in fact it highly supports the idea that social enterprise is not just a sustainable idea but is in fact a large part of the economy today.

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What is the Social Stock Exchange???

NASDAQ

NASDAQ (Photo credit: Wikipedia)

The Social Stock Exchange (SSE) is a new platform where ” we (The Social Stock Exchange) connect Social Impact Businesses with investors looking to generate social or environmental change as well as financial return from their investment”. Social Enterprise in essence is all about creating business that make a difference for good in the World weather that would be at a Local, National or International level, they all have the same goal to make lives and environments better.

At 7attention we see the SSE as a new and pioneering way to promote and help Social Enterprises to provide help across the World.

The need for good management in the 3rd sector is even more crucial than the private sector

Performance measurement is a difficult topic when it comes to social enterprise and that is why I have decided to cover it for my dissertation. There is not one way to measure performance like you can measure in private sector for-profit businesses as they can be measured on the amount of profit they make.

Looking to the future is extremely important for social enterprises because planning ahead needs to be done not just to accurately measure financial success but also measuring how the financial success will measure positively on the social side of the enterprise.

Rob Paton (2003) is professor of Social Enterprise at the Open University business school and gives a fantastic insight into how to measure the success of Social enterprise in his book ‘Managing and Measuring Social enterprise’. Paton (2003) asks the question what is the return on £100million of assets owned by a social enterprise? When we are talking about Social enterprises there is almost no clear answer, ‘of course an enterprise of this size gave around £150,000 to charity every year such as the Scott Bader commonwealth’ (Paton, 2003). So therefore an enterprise of this size is giving around 0.15% of its wealth to charity per annum, from this point the author is suggesting one way to measure the success of the enterprise is by a percentage of how much cash ends up in the hands of charities. This technique cannot be done with all enterprises as some enterprises do not work by funding a charity but work in ways such as employing people at an employable disadvantage.

The barriers of growth

Forex Money for Exchange in Currency Bank

Forex Money for Exchange in Currency Bank (Photo credit: epSos.de)

One of the main issues with enterprises trying to start up is the ability to gain funding, I have mentioned earlier in this document of the type of financial institutions which are able to apply funding to social enterprises but the cabinet office (2006) states that ‘The office of the Third Sector will make available up to £10million for investment in social enterprises’ as gaining investment can be the first stepping stone as well as the hardest task for social enterprise, if they are able to gain this funding then it means they will be able to reinvest their assets later on into the social causes they wish to.

 

The UK government are currently running their own scheme to measure the success of Social Enterprises and the aim to do this by the following points of measurement;

 

–        ‘If the numbers of social enterprises increase, as measure by the Annual Small Business survey;’

–        ‘If more people are aware of social enterprise, as measured by the Small Business Service Household Survey; and’

–        ‘If Social enterprises report fewer barriers to growth.’

 

Hybrid – Local Councils Helping Local Social Enterprises

English: Council offices of Westgate in Wether...

English: Council offices of Westgate in Wetherby, Leeds, West Yorkshire, UK. These were originally used by the council of the Wetherby Rural District, now by Leeds City Council. Note the balcony used for election counts. Taken on the evening of the 30th April 2009. (Photo credit: Wikipedia)

With Local Councils within the United Kingdom (UK) seeing a decrease in their budgets, perhaps ‘Social Enterprises’ will be the way for these Councils to provide more help in the Communities they are responsible for.

“Many of those third sector organisations are coming together in Cardiff today for the Social Enterprise Wales Conference and councils will almost certainly be looking at how much bigger a role they can play in future provision of services” (Brian Meechan, BBC, 2013)

 

 

 

 

In a way for a Council to approach to the ‘Social Enterprise’ concept would be in many respects a logical step for these kinds of organisations to go for. The Council doesn’t have to become a ‘Social Enterprise’ throughout the organisation, but they can look at the services that they provide which are needed but could be taken and made in to ‘Social Enterprise’ structures. By doing this they will be able to save money of the Tax payer and also provide a service for the community that the Council is responsible for.

“Leeds has a vibrant social enterprise sector which the Council is committed to helping to grow”

Many Local Councils in the United Kingdom have already started to help ‘Local Social Enterprises’. For example Leeds City Council provides funding to a number of ‘Local Social Enterprises’ such as (www.leedscf.org.uk).

Why not take the aspects of a private organisation and use it for helping Local Communities?

Changing the way we conduct business

Changing the way we conduct business

If we don’t change the way we conduct business, if we encourage greed and destroying our fragile environment we are ultimately going to destroy all the good in the world. If we improve the way we build our industries so they actually build communities and improve the life of millions then the human race will flourish.