Memorandum from RISE (Regional Infrastructure
for Social Enterprise) (SW 02)
1. SUMMARY
1.1 Planning and activities in the SW aimed
at responding to current economic climate do not engage with a
wide enough spectrum of business models or challenge the "status
quo" that led to root causes of the credit crunch/recession.
The social enterprise model offers a "viable business solution"
that not only delivers profit, but reinvests this profit to benefit
environment and society as part of its "raison d'être".
In essence People, Planet, Profit are the key motivations for
social enterprise.
1.2 RISE as the regional strategic body for social
enterprise is working with a number of government agencies and
the social enterprise sector to raise the profile and improve
the working environment for social enterprises. Currently the
expertise of RISE and the sector are not being fully utilized
by the mechanisms that have been put in place by government partners.
1.3 RISE has a number of recommendations that
could help to address this situation, that do not have significant
resource implications:
— Awareness raising activities should be
carried out within the SW government agencies on Social Enterprise
including SWRDA, GOSW and other agencies such as the LSC.
— The regional business support service
for social enterprise should be fast tracked as a matter of priority
by SWRDA and Business Link.
— Social enterprise should be more closely
linked to the business agenda and embedded in all recovery plans.
— Partners should actively promote the
Social Enterprise Mark as the means of identifying social enterprises
that can prove that social and environmental benefit are integral
their core business objectives.
2. THE CASE
FOR SOCIAL
ENTERPRISE (FOR
MORE INFORMATION
ON SOCIAL
ENTERPRISE SEE
APPENDIX 2)
2.1 Social enterprise is a business model
which offers the prospect of a greater equity of economic power
and a more sustainable society by combining market efficiency
with social and environmental justice. As businesses with primarily
social or environmental objectives social enterprise can play
a key role in building a more sustainable and resilient economy
that addresses the social, economic and environmental challenges
we face.
2.2 The latest government data suggests there
are currently at least 55,000 social enterprises in the UK contributing
more than £8 billion to GDP per year—in the SW it is
estimated that there are at least 6,600 social enterprises. They
operate across an incredibly wide range of industries and sectors
from health and social care, to renewable energy, recycling and
fair trade and at all scales, from small businesses to large international
companies. They incorporate a range of business models including
cooperatives and mutuals, Development Trusts and community enterprises,
housing associations, credit unions, leisure trusts and Social
Firms.
2.3 Social enterprises are well placed to
play a key role in mitigating the impact of the recession and
creating a more sustainable economy. They also offer a model of
business that once established have a far higher survival rate
than standard SMEs in total (by a factor of 4).
2.4 They are powerful economic actors that
promote social inclusion, bring into use under-utilised assets
and foster greater levels of community cohesion. The offer a more
efficient and innovative model for public service delivery and
are innovating in the sectors of the economy identified as integral
to our recovery. Harnessing and supporting their growth could
enable social enterprises to play a key role in creating a sustainable
economy that is committed at its very core to the well-being of
its citizens and the environment.
2.5 Social enterprises are already directly
addressing many problems which have arisen out of the recession,
from Community Development Finance Institutions and Credit Unions
providing local finance; to social enterprises creating training
opportunities and employment in the areas of the country that
have been hardest hit.
2.6 In addition, the values embodied by
social enterprises have a key role to play in rebuilding confidence
in the British economy and in responding to the current thirst
for a more values based approach to business and as such, generating
a higher level of awareness among the public, investors and entrepreneurs
is of paramount importance. Recent research (December 2008) carried
out by RISE showed that in a poll of 1,000 consumers across the
UK 74% of respondents would rather buy from a company that makes
decisions based on concern for society and environment.
3. ROLE OF
RISE (REGIONAL INFRASTRUCTURE
FOR SOCIAL
ENTERPRISE—FOR
MORE INFORMATION
SEE APPENDIX
2)
3.1 RISE is the strategic regional body
for social enterprise. RISE and the SW social enterprise sector
are regarded as one of the leading regions in terms of numbers,
innovation and good practice. RISE has consistently operated at
a high level in terms of advising Ministers on good practice and
ensuring that where the SW leads, it informs national policy.
Most notable cases are in the arena of social enterprise business
support and in the development of the Social Enterprise Mark (a
Fair Trade style Mark to help social enterprises market their
unique business model to potential customers—for more information
see Appendix 1). The Social Enterprise Mark is being integrated
into the thinking of the Cabinet Office (OTS), in its "Real
Help for Communities" plan in activities to promote social
enterprise. It would follow that there is scope for endorsement
of the Mark more widely by partners in the region as the badge
to promote businesses that deliver social and environmental benefits
as well as delivering economic outcomes.
4. EFFECTIVENESS
OF THE
CURRENT GOVERNMENT
RESPONSE IN
THE SW
4.1 The social enterprise business potential
is not currently being sufficiently recognised or realised by
the structures, government bodies and policies in their implementation
in the SW, particularly around its role in the current economic
climate and perhaps even more importantly in planning for the
recovery of the SW economy.
4.2 To date RISE has had very limited input into
any discussions and actions which seem to have been limited largely
to government agencies and the "traditional business sector"
eg FSB, CoCs, CBI, IOD etc on the one hand. On the other, there
has also been a tendency for government agencies to categorise
social enterprise into a wider "Third Sector" remit
which has focused on grants and charities rather than the business
potential in areas such as:
— Delivering on social and environmental
needs alongside wealth creation—the triple bottom line—and
to create social justice through an enterprising approach.
— Delivering creative joined business approaches
to social cohesion and inclusion challenges eg reinvesting profit
to further social aims and objectives and creating greater business
viability and sustainability to local activities.
— The potential for communities to benefit
from acquiring assets whilst the demand in the market is low.
This will create financial sustainability and provide long term
investment in these communities.
— The potential to encourage existing businesses
to convert or set up as social enterprises particularly in areas
where the mainstream market has failed in community and employee
buy-outs eg village shops, transport facilities, managed start-up
units and office space etc.
— Preserving and creating employment and
skills (the Government has announced that 10% of the £1 billion
Future Jobs Fund will be targeted at Social Enterprises)—during
a recession it is likely that those that were previously excluded
will be further disadvantaged, social enterprises are well placed
and have experience in this arena eg Pluss who provide a number
of employment opportunities to those who are disadvantaged in
the labour market (including those with disabilities).
— Leading innovation and alternative business
models in the field of public service delivery (eg Mid Devon Community
Recycling—recycles more waste as it is not motivated by
shareholder profit and also creates employment of people with
learning disabilities).
— Being at the cutting edge of business
creativity in the open market eg leading social enterprises such
as COSMIC and the Big Issue were all business models conceived
during previous recessions.
— The use and promotion of alternative
ethical finance institutions eg Triodos, Co-operative Bank and
CDFIs such as Wessex Reinvestment Trust and SWIG.
4.3 RISE has worked extensively with SWRDA
and Business Link on the social enterprise agenda, and together
has designed a support service that has the potential to scale
up and increase the numbers of effective businesses in the SW.
However, this has been frustrated by the length of time and processes
that have been put in place leading to constant delay. This has
been very frustrating for all concerned—there is an urgent
need to progress this to ensure that social enterprises have a
chance of becoming sustainable businesses in that current climate.
We are also concerned that there is no social enterprise input
into the Support for Business Action Group which feeds into the
Regional Economic Task Group—at present none of the agencies
that contribute cover the social enterprise perspective.
5. RECOMMENDATIONS
5.1 In order to progress the social enterprise
agenda in the region to its full potential we would recommend
the following activities:
— That there is awareness raising activities
within the SW government agencies including SWRDA, GOSW and other
agencies such as the LSC.
— That the regional business support service
for social enterprise is fast tracked as a matter of priority
by SWRDA and Business Link.
— That social enterprise is more closely
linked to the business agenda and is embedded in all recovery
plans.
— That partners promote the Social Enterprise
Mark as the means of identifying social enterprises that can prove
that social and environmental benefit are integral to their core
business objectives.
APPENDIX 1
THE SOCIAL ENTERPRISE MARK
The Social Enterprise Mark is the ethical label
being used by social enterprises on their products and promotional
material. It communicates effectively with their customers that
they do business a different way—trading for people and
planet.
Social enterprises are:
"Businesses with primarily social objectives
whose surpluses are principally reinvested for that purpose in
the business or community"
Office of the Third Sector
RISE has developed the Social Enterprise Mark,
owns the intellectual property and is responsible for the implementation
in the South West. RISE is a not for profit company established
to strategically improve the business environment for social enterprises
in the South West region. The need for the Social Enterprise Mark
arose out of this work.
THE CONCEPT
Our vision is of a society where customers
identify and choose to purchase the products and services available
from social enterprises, aware of the ethical benefits these bring.
Currently social enterprises are "the missing
piece of the capitalist system" says Mohammad Yunus, Nobel
Peace Prize Winner. Actually, Government statistics indicate that
there are 55,000 established social enterprises in the UK. However,
the exciting ethical offer of social enterprises is still missing
from the market place.
There is no understanding that a business can
"trade for people and planet" (as opposed to a traditional
business that trades for profit), and no easy way for customers
to recognise social enterprise products or services with confidence.
This is true for all social enterprise customers—whether
the public sector, the private sector or individuals. This damages
the effectiveness of social enterprises in making and reinforcing
customer relationships in their market. It limits their ability
to access preferential finance and also impacts more broadly,
for example on their ability to access quality Board members,
and to develop coherent partnerships/collaborative approaches.
The Social Enterprise Mark is changing this—and
has been heralded within the movement as the new "fairtrade
style" mark for social enterprises. This new ethical label
is now being used by social enterprises on their products and
services to communicate with their customers.
CURRENT POSITION
The Social Enterprise Mark was launched in November
2007 at the RISE AGM at Eden Project in Cornwall.
Since then a key development has been to establish
an "Independent Panel" which validates decisions regarding
applications to the Social Enterprise Mark. The panel is independent
from the social enterprise movement and can therefore effectively
police the application of the criteria, ensuring that the Social
Enterprise Mark is giving a clear and consistent message to the
customer.
The independent panel consists of a lawyer,
a solicitor, the National Consumer Council, a public sector procurement
officer and an academic. The RISE assessment manager reports to
this panel regarding latest applications to the Social Enterprise
Mark and their findings regarding likely eligibility or any issues.
This is then discussed by the panel, which may ask for further
information or make a decision.
There are currently (May 2009) 30 SEM holders
in the South West and one organisation outside of this region,
the first of a series of regional and national champions who will
assist in the Mark's roll out into their region and across the
UK. RISE has been in discussions with all the regions and devolved
nations of UK and working with the national Social Enterprise
Coalition is aiming to start a national roll out in November 2009.
For more information on the Social Enterprise
Mark see www.socialenterprisemark.co.uk
APPENDIX 2
INFORMATION ABOUT RISE AND SOCIAL ENTERPRISE
DEFINITION OF
SOCIAL ENTERPRISE
Social enterprises are businesses with primarily
social objectives whose surpluses are principally reinvested for
that purpose in the business or in the community, rather than
being driven by the need to maximise profit for shareholders and
owners (OTS).
CHARACTERISTICS OF
SOCIAL ENTERPRISE
Enterprise Orientation—produce goods or
providing services to a market.
Social Aims—eg job creation, or service provision,
with ethical values & are accountable to members/stakeholders
and the wider community.
Social ownership—independent organisations
whose governance and ownership structures are normally based on
participation by stakeholder groups.
Social enterprise is an embracing term that
includes for example:
Development trusts and community enterprise.
VISION OF
RISE
"Social enterprise to be recognised as
a successful business model at the heart of communities".MISSION
"RISE will work to help the trading and operating
environment for social enterprise development in South West England".STRATEGIC
AIMS
S1 Social enterprise is promoted as a significant
trading option.
S2 Social enterprises grow, thrive and become
better businesses.
S3 There is wider understanding about the
added value of social enterprises in South West England.
S4 RISE is a well run, effective social
enterprise.
For more information on RISE see www.rise-sw.co.uk
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