The organizational form of Social Enterprise in UK: practice and enlightenment 1 Ellen Li 5 FEB. 2015

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[2.1] What’s social enterprise? Social enterprise (SE) has been a growing global phenomenon for over two decades. Britain's social enterprise sector is one of the most successful and vibrant in the world, championed by government and growing in scope and scale. Social enterprises are helping to change society for the better. They tackle some of society’s most entrenched social and environmental challenges. They set new standards for ethical markets, raising the bar for corporate responsibility. They improve public services, shaping service design and pioneering new approaches. They increase levels of enterprise, attracting new people to business. 3

4 [2.1] What’s social enterprise? “businesses with primarily social objectives whose surpluses are principally than being driven by the need to maximize profit for shareholders and owners” (DTI 2002) “Social enterprises are businesses that are set up to tackle social problems, improve communities, people’s life chances, or the environment. They make and do things that earn money and make profits like any business. It is how they work and what they do with their profits that is different: working to make a bigger difference, reinvesting the profits they make to do more good.” （ Enterprise UK, 2011 ）

Charity Social Enterprise [2.1.1] What’s the difference between a charity and a social enterprise? What’s different? Charities traditionally aim to fund their social mission through grants and donations. Social enterprises aim to fund their social mission through trading activities – selling products and services to customers. 5

6 With the decreased economic growth and increased unemployment that began at the end of the 1970s and continued into the 1990s, many European welfare states experienced a crises. Budgetary constraints were the main cause, but the crises was also in terms of the effectiveness and legitimacy of state welfare programs. Legitimacy was particularly undermined in the area of unemployment as policies, especially for the long-term unemployed (including the disadvantaged and low-skilled),proved not very effective. (Borzaga ＆ Defourny,2001b) [2.2] History of the Recent Social enterprise movement

[ Ⅲ ] UK’s social enterprise status 62,000 social enterprises in the UK, contributing £24 billion to the UK economy ； 800,000 people employed by social enterprises in the UK ； 5,450 co-operative businesses in the UK ； 465 credit unions across England, Scotland and Wales ； 260 community owned shops trading in England, Scotland and Wales. 7

[ Ⅳ ] organization and structure of social enterprise 4.1 Community Enterprises which serve community of interest and have representatives from the community on their board of directors. 8

[4.1.1] Case Study 1 Community Energy Warwickshire It was set up by local people living in Warwickshire who wanted to reduce carbon emissions and increase the use of renewable energy. over £100,000 through Community Share Offers ； over 115,000 units of electricity over the last two years; saving around 58 tonnes of carbon. 9

provides direct benefit to its target population, cooperative members. market information technical assistance collective bargaining power economies of bulk purchase etc. 4.2 Co-operatives [ Ⅳ ] organization and structure of social enterprise 10

[4.2.1] Case Study 2 GLL (Greenwich Leisure Limited) GLL is registered as an Industrial and Provident Society as a society for the benefit of the community, a popular legal form for mutual enterprises. 11

4.3 Trading arms of charities set up to undertake trading activity in order to raise money for their charity parent company. e.g. charity shops, catalogues, training and consultancy. [ Ⅳ ] organization and structure of social enterprise 12

[4.3.1] Case Study 3 Age UK Age UK was formed from the merger of Help the Aged and Age Concern, creating an organisation with a combined income of around £160 million, including £47 million a year raised through fundraising, and over 520 charity shops, and income raised through its commercial services arm, Age UK Enterprises. 13

[ Ⅳ ] organization and structure of social enterprise 4.4 Community Interest Company( CIC) A community interest company (CIC) is a new type of company introduced by the UK government in 2005 under the Companies Act 2004, designed for social enterprises that want to use their profits and assets for the public good. CICs are intended to be easy to set up, with all the flexibility and certainty of the company form, but with some special features to ensure they are working for the benefit of the community. 14

[4.4.1] Case Study 4 GATEWAY FAMILY SERVICES started life as a department within South Birmingham Primary Care Trust, but became a Community Interest Company (CIC) in It was set up to tackle health and employment inequalities by helping the NHS and local authorities to identify the needs of communities and encourage local people to train to fill gaps in service provision. Talked to Chief Executive VICKI FITZGERALD about how the business has developed and its hopes for the future. 15

[ Ⅴ ] Supportive Institutions in UK supportive environment tax and administrative regulatory recommendations The Social Investment Tax Relief Social Enterprise Unit a three year program called “Social Enterprise: A strategy for success.” the Blair government the Department of Trade and Industry (DTI) 16

[ Ⅵ ] Enlightenment and Conclusion Opportunities Challenges Enlightenment 17

6.1 Opportunities 1 Social Entrepreneurs focus on key areas contributing to the creation of a harmonious society. 2 Social Enterprises grew over the past year and entrepreneurs have an optimistic outlook for the future. 18

6.2 Challenges 1 Less than half of social enterprises achieve financial sustainability. 2 access and retention of human resources. 3 government policy and the legal framework 19

6.3 Enlightenment Write better legislation for the charitable sector. Create a tax environment in which donations to charities are truly encouraged. Develop a more effective volunteer policy. Promote a more developed charitable sector. Make the sector more open, transparent, and better governed. 20

Social enterprise’s future will be better ！ 21