Dave Thornett Social Enterprise

The term Social Enterprise describes an ethical framework rather than being an industrial classification such as manufacturing and so there are social enterprises operating in the fields of health, retail, energy, leisure, construction, ICT, sport and many others, alongside private and public sector organisations. The Government definition of 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 profits for shareholders and owners”

Creating Social Change 1844: As a result of exploitative factory owners and shopkeepers who charged extortionate prices, 28 working men in Rochdale scraped together £28 to open their own shop – so heralding the beginning of the modern co- op movement. 1980s: ‘Community development’ became well established with a range of government grants and initiatives. Recent years: growth of community enterprise, where businesses have evolved in poor and disadvantaged areas with the specific aim of improving the economic fortunes of their neighbourhoods. The voluntary sector, too, has become more innovative and enterprising. 1990s: ‘Social Enterprise’ had become familiar in the UK. This signalled the shift from grant dependency to income generation. In October 2001 the government launched the Social Enterprise Unit to champion social enterprise and spread good practice.

Social Enterprise Stats Approx, 55,000 social enterprises Employing 500,000 people Combined turnover of £27 billion Contribute almost 1% of GDP (Social enterprise coalition 2006)

Legal StructureOverlay (additional characteristic to basic legal structure) Badge Company Ltd by Guarantee Company Ltd by Shares Industrial and Provident Society Cooperative Company Ltd by Guarantee Charitable Incorporated Organisation (coming soon!) Charity Community Interest Company (CIC) Social Enterprise Social Firm Development Trust

Form Follows Function IPS for Community Share Issues (Settle Hydro, George and Dragon Hudswell) Company Limited by Shares for Commercial Joint Venture Company Limited by Guarantee for Trading Subsidiary

Whatever the theme or formal legal structure they take social enterprises are bound by common principles such as: Social mission is interwoven in the fabric of the business rather than being an add-on. For example his may manifest itself in a fair trade relationship, the provision of important services not otherwise available or job creation. Social ownership and interest should drive the business model rather than simply profitability for private shareholders. There are some legal models that allow private shareholding, but dividends and returns are capped to ensure the community benefit remains dominant over private profit.

National Policy Framework The Think Smart…Think Voluntary Sector document produced by OGC and the Home Office in June 2004 Right to Request Community Investment Tax Relief Community Interest Companies Asset Transfer Social Enterprise Investment Fund

Rise of the Social Entrepreneur Jeff Skoll E-bay to Skoll Foundation Muhammad Yunus Banker and economist to Grameen Bank Dr. Larry Brilliant Google to Urgent Threat Foundation (via eradicating smallpox)

Case Studies1 SOAR Build Motivation Employment, local control, income, quality Ownership Share capital private/social joint venture Impact Jobs Created, input to HMR, links to private sector Future Link to mainstream employment programmes, geographic expansion

Case Studies 2 Bay Broadband Motivation Internet access for the village Ownership Mutually owned by local people Impact Cheap broadband, real connectivity, reinvestment Future Regional network, sell model on, invest in new services

Case Study 3 Fresh Pastures Motivation Employment, drive from local authority Ownership Share capital community interest company Impact Employment for people with disabilities (25% workforce) business turning over £5m in year 3. Strong SROI Future Increase employment, supply to new areas, support local dairies

Social Investment Houses Yorkshire Key Fund Charity Bank Social Enterprise Investment Fund Community Builders Adventure Capital Fund Unity Trust Bank Triodos Bank

Companies House Co-operatives UK Governance Hub CICs Charity Commission Social Enterprise Coalition Social Enterprise Yorkshire and Humber Business Link Yorkshire