Community Services Programme Traded Income and the Community Services Programme Paul McLaughlin Development Co-ordinator

Social Enterprise – A Definition “An enterprise that trades for social/societal purpose, where at least part of its income is earned from its trading activity, is separate from government and where the surplus is primarily re-invested in the social objective” Forfas: Social Enterprise in Ireland, Sectoral Opportunities and Policy Issues. (July 2013)

Social Enterprise and CSP In our view…. “Social enterprises are directly involved in the production of goods and services to people on a continuous basis and are defined by the continuous economic transactions i.e. the sale of the service or product”. This is one of the reasons that sets CSP supported organisations apart from other not for profit organisations as you (should!):- Operate as a business Generates a traded income which is used for social purposes

Why Focus on generating traded income? CSP is only a contribution to wages. Min wage > to €9.25 per hour in 2017. Aim for Living wage of €11.50! Overheads such as rent/utilities etc. Maintenance costs To fund development of new or expanded services Build up of reserves – guarantee your sustainability

2016 recontracting Strand 2 Analysis 131 Strand 2 companies reviewed. Traded income - 38% of turnover in 2015 For every €1 CSP support provided, traded income of €1.63 is generated.   2015 2014 2013 Turnover €72 million €80 million €77 million CSP €16.8 million €17.2 million €16.7 million Traded income €27.5 million €27 million Fund raising €1 million €850k €1.3 million Public funding €26 million €33 million €30 million

Stable ratios Your service finances should aim to be within these ratios: Why? Viability concerns if traded income too low Need for current staffing levels questionable If v high, possibly fully commercially viable without CSP support. Source of Income Turnover Traded income Not less than 30% CSP contribution Not more than 50% Public funds / fundraising / other The balance

Challenges you face. Your Board may view you as a social service. Geography - sparsely populated rural area or deprived inner city location Pricing: Affordability Potential for commercial competition Declining market – e.g. Basic ICT services

What can you do practically? Ensure paid staff are focussed on the income generating services e.g. Friendly call vs Meals on Wheels? Make better use of work placement programmes TUS, CE or RSS Pricing: regular research and review. Identify new markets – e.g. Educational ICT services in conjunction with ETB’s. Maximise usage of facilities Marketing and Promotion Activity

What more can you do? At a Strategic Level Request access to any available training initiatives e.g. “Growing your Social Enterprise” and our mentoring programme. Social Inclusion Community Activation Programme (SICAP) has a social enterprise objective. Approach your Local Development Company. Board membership – fit for purpose? Improve Corporate Governance

Corporate Governance

Corporate Governance What do we want to see? Each organisation to have a robust Internal Procedures Manual in place. This documents Financial & non-Finance procedures Organisations are encouraged to apply Pobal’s Managing Better Volume 1: Good Governance toolkit – www.pobal.ie And to adopt the Code of Practice for good governance of Community, Voluntary and Charitable Organisations. www.governancecode.ie.

In summary CSP is an investment in your social enterprise supporting viable community service delivery. Our support is a contribution towards wage costs - Sustaining your business is up to you. Act like a business - plan, review, market, adapt. Use any help/support/resources available Improve your corporate governance.

Thank you for listening Questions?