What is a social enterprise and how can I get involved?

Hollywood star George Clooney hands over a five pound note to Ciara Whelan during a visit to Social Bite, a social enterprise cafe in Edinburgh. Picture: Getty

Hollywood star George Clooney hands over a five pound note to Ciara Whelan during a visit to Social Bite, a social enterprise cafe in Edinburgh. Picture: Getty

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IT’S A term increasingly used in glowing terms by politicians and community groups. But what exactly is a social enterprise?

They rely on selling goods or services that customers want and work to make a profit just like any other business, but where these firms differ is they plough all of their profits back into chosen social or environmental purposes rather than pay dividends to shareholders.

More than 200 new social enterprises are established each year in Scotland, with over 5,000 currently in business. They provide over 112,400 jobs in Scotland and contribute approximately £1.7bn to the Scottish economy.

Women hold senior positions in around 60 per cent of social enterprises.

WHAT ARE THEY?

Most social enterprises in Scotland sign up to a voluntary code of conduct. Social Enterprise Scotland states: “They must have an ‘asset lock’ on all their buildings, land and other assets. Without making a profit, social enterprises can’t meet their social and environmental mission; they must be sustainable”. Social enterprises should not be confused with businesses that operate in an ethical manner or charities that don’t do business. There is currently no legal definition of social enterprise, but a five-point criteria was set-up in 2010.

WHAT EXAMPLES ARE THERE?

Social Bite, The Big Issue, The Wise Group, Divine Chocolate, Cornerstone, Kibble Education and Care Centre, media co-op, Glasgow Housing Association, Isle of Eigg Heritage Trust, Link Group Ltd, the Eden Project in Cornwall, Capital Credit Union, The Grameen Foundation and the Homeless World Cup are all registered social enterprises. The directory of Scottish social enterprises will detail which are located near you.

WHAT TYPES ARE THERE?

Social enterprises take many different models are used by a variety of organisations. Co-operatives and Mutuals have been around for more than a century. Co-ops are democratically-owned businesses which give employees, customers or members a direct stake in the business. There are around 600 co-ops in Scotland with a turnover of more than £4bn a year and employing 28,600 people. Community Interest Companies (CICs) are limited companies created for the use of people who want to conduct a business or other activity for community benefit. Credit Unions and housing associations are also types of social enterprise.

READ MORE: New social enterprises add £1.7 billion to Scotland

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