Businesses run not for profit and shareholder returns but for social purposes are an increasingly important fact of life, writes Theresa Shearer
The UK’s social enterprise sector is growing. Government data estimates that there are approximately 70,000 of them, contributing some £18.5 billion to our economy.
Social enterprises are businesses with a social purpose. They operate in a commercial marketplace, generating income through trade, whilst also achieving a social mission. They have the power to enhance communities and improve lives.
ENABLE Scotland runs a number of social enterprises, including Darling’s, a thriving coffee shop in Arbroath that has a training academy for young people. Launched in 2012, 70 young people have already graduated from its training programme, many of them moving onto work or college.
Driven by social purposes
Comparing the Darling’s model to a high street coffee chain such as Starbucks or Costa Coffee is interesting. While social enterprises must ensure profitability to be sustainable, they are driven by social purposes and outcomes, not shareholder return.
They benefit the community and have a different outlook to businesses run for shareholders. They are more likely to engage with local communities, have a desire to improve things locally and bring people together. They embrace collaboration and are more likely to support other organisations and increase the use of community-based assets.
While Darling’s was set up to aid employment opportunities for people furthest removed from the labour market, the wider local community is also hugely important.
Art Moves is a group for people with learning disabilities, and Darling’s provides space for its artists to exhibit and sell their work. Darling’s also provides a comfortable place for a youth group to meet weekly. Darling’s supports local events and charities, recently holding an awareness event with Cardiac Risk in the Young. This community hub facilitates gatherings and builds community capacity through various classes. Darling’s recent venture is African drumming classes.
Social enterprises have this great opportunity to provide preventative outcomes, as their roots lie in preventative spend – that is money spent now to benefit the community, so reducing social care spend in the future. Importantly, their funding models will see them become more sustainable and provide efficient alternatives to certain state services.
The Scottish Government has pledged its support – John Swinney, Cabinet secretary for finance, employment and sustainable growth, said: “The Scottish Government is committed to doing all that it can to ensure that the social enterprise sector continues to flourish across the country during times of economic challenge. Social enterprises play a key role in our social and economic well-being. They help create employment and skills opportunities, improve public services and support some of our hardest to reach individuals and communities.”
Not all social enterprises survive, and we must learn from their failure. There is often confusion about what a social enterprise is. Social Enterprise Scotland suggests: “The term ‘social enterprise’ should not be confused with, for example, private sector businesses that operate in an ethical way, charities that do not trade or trade very little, or public sector arms-length companies.”
Social impact through employability skills
ENABLE Scotland has a social enterprise arm that delivers opportunities for training and employment, while developing new income streams to run sustainable businesses delivering social impact.
Darling’s, and more recently Hazeldene Horticulture in Ayrshire, were launched with support from the Big Lottery and the People’s Postcode Lottery. Both deliver social impact through employability skills and will also generate profits that will be reinvested into future social enterprises. They compete on price and quality, are sleek in design and meet consumer demand. Their offers are as good as, if not better than others already trading in the markets.
The recognition Darling’s has received has built confidence. In November, it won STV’s Real Heroes Community Project of the Year. Our enterprise manager, Doreen Walkinshaw, who developed the concept, was named as Women Ahead Business Woman of the Year 2013. Darling’s also received an Outstanding Achievement award at the Scottish Home Baking Awards.
Social Enterprises must also be “scalable”. This may not be realistic for all, but some third sector organisations will be able to think bigger and build scale into their plans. To be efficient and make best use of initial seed-funding, the sector must work collaboratively so that social enterprises can be scaled and developed in the same way as the private sector’s franchising model.
It is not about becoming the next Starbucks, but about a sound business model and well defined social objectives, so that such enterprises can develop to benefit the greatest number of people and have the biggest social impact. Attracted by the social purpose of Darling’s, it’s more than our excellent lattes that leave a good taste with our customers.
• Theresa Shearer is chief operating officer, ENABLE Scotland www.enable.org.uk