What is Social Enterprise?
Social enterprises are businesses that trade for social and environmental purposes. They operate in all markets competing against private firms selling good and services to local authorities, central government, private businesses and individual consumers.
Social Enterprises exist to make a profit just like any private sector business. However instead of paying dividends to share holders or inflated salaries to owners and managers any profits or surpluses they make are reinvested into social and environmental purposes; for example providing employment opportunities to the long term unemployed. Without making a profit social enterprises cannot meet their social and environmental objectives; they must trade, to be sustainable.
What types of social enterprise exist? Social enterprise is a broad church and the more-than-profit approach is used by a hugely diverse range of organisations. Below are some of common types of social enterprise.
Cooperatives and mutuals Cooperatives and mutuals are democratically-owned businesses which give employees, customers or members a stake in the business. There are now more than 400 coops, employing 27,000 people, turning over more than £4.6bn per year and with combined assets of more than £22bn.
Credit Unions Credit unions are a distinct type of co-operative which provide financial services to members, often in areas of social and financial exclusion.There are more than 130 Credit Unions currently operating across Scotland with over 170,000 members and assets of £185m.
Housing Associations Housing Associations are voluntarily-managed companies providing affordable housing for rent and for sale. They give priority to those in greatest need and reinvest any surplus income in maintaining or adding to their housing stock. Many Housing Associations also support other forms of social enterprise through 'Wider Role' community regeneration activity. There are over 200 Housing Associations in Scotland.
Social Firms Social Firms are commercial businesses that provide integrated employment for people with disabilities or other disadvantages in the work place.
Development Trusts Development trusts are community run organisations that are concerned with the economic, social and environmental and cultural needs of their community. They are owned and managed by the local community and aim to generate income through trading activity that enables them to move away from dependency on grant support.
Community Interest Companies CIC's are limited companies created for the use of people who want to conduct a business or other activity for community benefit, and not purley for private advantage.
