What is a social enterprise?

 

As you know, iT4Communities helps charities, community groups and social enterprises access free IT support from volunteers like you, but what is a social enterprise ?

A social enterprise is a community business, which does not distribute profits/surpluses to individuals but uses them to meet their social aims. The community can be geographical or of common interest. As their profits are reinvested for that purpose in the business or in the community, they're not driven by the need to maximise profit for shareholders or pay high salaries to directors. Social enterprises tackle a wide range of social and environmental issues and operate in all parts of the economy.

Unlike charities they tend not to be funded by national or local government or donations, but instead have to get the income they need to be sustainable by providing services and/or selling goods.

They're also less restricted and regulated than charities, but their profits are taxable.

There are lots of different legal structures including companies limited by guarantee, industrial and provident societies, and community investment; some organisations are unincorporated associations and others are registered charities. Frequently, start-up social enterprises are comprised of two or three people with a common community idea.

There are lots of well known social enterprises, for example, the Co-Op, and lots of organisations that we see all the time, many charity shops, housing associations, playgroups, or outsourced local council services, many of which don't realise that they're classed as social enterprises. Some small charities are also social enterprises, or have social enterprises as trading arms.

Most of the social enterprises helped by iT4C volunteers are small in size, and many are start-ups, and they tend to be involved in recycling, or other environmental issues. It's usually quite exhilarating working with social enterprises, because the founders or managers are good entrepreneurs, and are buzzing with new ideas or because they have innovative ideas about delivering services which often need the help from IT to leverage the innovation.

Social Enterprise Day 2009 is the 21st November.

Peter Munro, Project definer