Social Enterprise for the 21st century

Transcription

1 Social Enterprise for the 21st century Social enterprises are social mission driven organisations which trade in goods or services for a social purpose. They are aiming to accomplish targets that are social and environmental as well as financial is often referred to as having a triple bottom line. Social enterprises are profit-making businesses set up to tackle a social or environmental need. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose is central to what they do. In Britain and North America, there is less emphasis on generating a surplus and more on the double bottom line nature of the enterprise. Social enterprises are generally held to comprise the more businesslike end of the spectrum of organisations that make up the third sector or social economy. A commonly-cited rule of thumb is that their income is derived from the business trading rather than from subsidy or donations. Social enterprises are community organisations but with a particular strong geographical definition and focus on local markets or services. Social enterprises have the knowledge and the expertise and also they have developed personal ties with other community organisations in the area they operate. They provide significant benefits, including increased income, a diversified funding base, great flexibility in allocating income, improved organisational planning, management and efficiency, improved relations with philanthropic donors, increased and improved benefits for stakeholders, increased self-confidence, great value placed on work. Social enterprises provide tailored services to various stakeholders by involving patients, staff, and service users in designing the service they provide. They have the knowledge and the expertise to meet the patients and service users needs on particular areas. They reinvest any surplus profits into the community or into service developments.

2 Regarding the health and social care organisations, social enterprises offer them the opportunity to deliver high quality services in ways that are flexible, non-bureaucratic and have the potential to deliver good value for money. The member of staff in social enterprises are highly qualified, have the experience and they are committed to the aims of the service. Third sector social enterprises have expertise in specific areas and great understanding of the groups they represent. They understand how services should be delivered to best meet peoples needs. Social enterprises are businesses with primarily social or environmental 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. Many social enterprises have used the cooperative model. In other words, while the size of the non-profit sector is exploding, philanthropy has only just kept pace with economic growth. To make matters worse for the non-profit sector, government grants to the sector are vanishing while our social needs have never been higher. Organizations that have a social mission must operate in a way that is fiscally beneficial but they cannot just engage in off-shoot ventures that may drain capital essential to funding programs. In this way, non-profits cannot operate like a for-profit start-up. A social enterprise venture by any other name is still designed to generate additional income for a non-profit organization. It is just one of the many shades of Social Entrepreneurship, an emerging topic of discussion in the sector as a response to its current climate. The best established European research network in the field, EMES, works with a more articulated definition - a Weberian 'ideal type' rather than a prescriptive definition - which relies on nine fuzzy criteria: Economic criteria: 1. Continuous activity of the production and/or sale of goods and services (rather than predominantly advisory or grant-giving functions).

3 2. A high level of autonomy: social enterprises are created voluntarily by groups of citizens and are managed by them, and not directly or indirectly by public authorities or private companies, even if they may benefit from grants and donations. Their shareholders have the right to participate ('voice') and to leave the organisation ('exit'). 3. A significant economic risk: the financial viability of social enterprises depends on the efforts of their members, who have the responsibility of ensuring adequate financial resources, unlike most public institutions. 4. Social enterprises' activities require a minimum number of paid workers, although, like traditional non-profit organisations, social enterprises may combine financial and non-financial resources, voluntary and paid work. Social criteria: 5. An explicit aim of community benefit: one of the principal aims of social enterprises is to serve the community or a specific group of people. To the same end, they also promote a sense of social responsibility at local level. 6. Citizen initiative: social enterprises are the result of collective dynamics involving people belonging to a community or to a group that shares a certain need or aim. They must maintain this dimension in one form or another. 7. Decision making not based on capital ownership: this generally means the principle of 'one member, one vote', or at least a voting power not based on capital shares. Although capital owners in social enterprises play an important role, decisionmaking rights are shared with other shareholders. 8. Participatory character, involving those affected by the activity: the users of social enterprises' services are represented and participate in their structures. In many cases one of the objectives is to strengthen democracy at local level through economic activity. 9. Limited distribution of profit: social enterprises include organisations that totally prohibit profit distribution as well as organisations such as co-operatives, which may

4 distribute their profit only to a limited degree, thus avoiding profit maximising behavior. Ongoing research work characterises social enterprises as often having multiple objectives, multiple stakeholders and multiple sources of funding. However their objectives tend to fall into three categories: integration of disadvantaged people through work (work integration social enterprises or WISEs) provision of social, community and environmental services ethical trading such as fair trade Social Enterprise explained Social enterprises are competitive businesses that trade for a social purpose. They seek to succeed as businesses by establishing a market share and making a profit. They emphasise the long-term benefits for employees, consumers and the community. They bring people and communities together for economic development and social gain by combining business excellence with action for change. Social enterprises share three common characteristics: Enterprise orientation they are directly involved in producing goods or providing services to a market. They seek to be viable trading concerns making an operating surplus. Social goals they have explicit social aims such as job creation, the provision of local services, or combat of social exclusion. They are accountable to their clients and the wider community for their social, environmental and economic impact. Non-private profit distribution they use their operating surplus, or profit, to enable them to achieve their social goal. This is often reflected in a social ownership structure which protects profits from escaping elsewhere. Social ownership is common among social enterprises, but is not uniform and other approaches of profit distribution, (living wage, lower prices, reinvestment in new services), allow for goals to be met. The purpose of social enterprises is to create jobs in particular for the disabled and long-term unemployed.

5 Social enterprises are no different from other companies, as companies. They produce goods and services for the market and try to make a profit, the same as any other business. A social enterprise can operate in any sector or line of business. It pays all its employees a salary under a collective bargaining agreement and it always has an entry in the Finnish Trade Register. The difference form other companies lies in the fact that at least 30% of the employees in a social enterprise are disabled or all are disabled or previously unemployed in the long term. In addition, the company must have an entry in the register of social enterprises held by the Ministry of Employment and the Economy. Only a company with an entry in this register can use the name and business ID of a social enterprise in its business operations and marketing.