Social Enterprise Dictionary

GENERAL

LEGAL

PUBLIC SECTOR

FINANCE & INVESTMENT

GENERAL

Acquisition

An acquisition is the takeover/purchase of one company (the target) by another (the acquirer).

All Party Parliamentary Group (APPG)

A grouping in the UK parliament that is composed of politicians from all political parties interested in particular issue.  Social Enterprise UK is the secretariat for the APPG on social enterprise.

Carbon footprint

A measure of the impact our activities have on the environment, and in particular climate change. It relates to the amount of greenhouse gases produced in our day-to-day lives through burning fossil fuels for electricity, heating and transportation etc.

Civil Society

Civil society is the space between the state, the market and the ordinary household, in which people can debate and tackle action. By this definition, civil society includes charities; voluntary and community organisations, faith groups, non-governmental organisations and trade unions.

Community Development Finance Institutions (CDFIs)

Community Development Finance Institutions (CDFIs) lend money to businesses, social enterprises and individuals who struggle to get finance from high street banks and loan companies. They help deprived communities by offering loans and support at an affordable rate to people who cannot access credit elsewhere.

Community enterprise

Social enterprises that are committed to bringing about change in a specific community.

Community Shop or Pub

Shops or Pubs owned by the community. Often these are established by groups of community members in response to shops or pubs closing in order to revitalise the community.

Consortia

Two or more partners working together to deliver a Service, in order to access more or larger procurement and tender opportunities, and to compete in the open market.

Co-operatives

Businesses that are fully or majority-owned by their members – who may be employees, consumers, others in the community or a mix of these.  An organisation with a democratic structure which trades for the benefits of its owner-members.

Development Trusts

Development trusts are a type of social enterprise which focus on the regeneration of particular geographic areas. They are community owned and led organisations which use self-help, trading for social purpose, and ownership of buildings and land, to bring about long-term social, economic and environmental benefits in their community.

Employee owned businesses

Companies where employees own a significant or controlling stake in the business.

Housing Associations

Housing Associations are voluntarily managed companies that provide affordable housing for rent and for sale. Any surplus income is reinvested into land and housing stock to maintain a portfolio of property and land to continually increase and perpetuate housing provision. Many Housing Associations also support other forms of social enterprise through 'wider' community regeneration activity.

Joint venture

A joint venture is when two or more businesses pool their resources and expertise to achieve a particular goal. The risks and rewards of the enterprise are also shared. This can be the development, for a finite time of a new legal entity or a less formal partnership agreement.

Reasons you might want to form a joint venture include business expansion, development of new products or moving into new markets, particularly overseas.

Legal structure

An essential part of the framework of all organisations. A legal structure combines an organisation’s legal form - the type of organisation it is in the eyes of the law, and governing document - how it plans to work and govern itself.

Local Enterprise Partnerships

Local enterprise partnerships are locally-owned partnerships between local authorities and businesses and play a central role in determining local economic priorities and undertaking activities to drive economic growth and the creation of local jobs.

Merger

A merger happens when two or more organisations become one organisation, and do not retain their original status.

Mutuals

Businesses owned by their members. The term has more recently been used to cover a range of organisation forms including co-operatives, employee-owned businesses and social enterprises

Non profit or not-for-profit

Terms used to describe companies which may well make a profit, but do not distribute this profit to shareholders. They instead reinvest this money to further their social aims.

Office for Civil Society (OCS) 

The Office for Civil Society (OCS) holds responsibility for charities, social enterprises and voluntary organisations in the Cabinet Office. It replaced the Office of the Third Sector following the general election in 2010.

Quango

Quango or qango is an acronym (variously spelt out as quasi non-governmental organisation, quasi-autonomous non-governmental organisation, and quasi-autonomous national government organisation). It is used to label an organisation to which government has devolved power. The official term is "non-departmental public body" or NDPB.

Social Auditing and social accounting

A process which enables an organisation to assess and demonstrate its social, economic, and environmental benefits and limitations. The social audit looks at the whole organisation and is a way of measuring the extent to which an organisation lives up to the shared values and objectives it has committed itself to.

Social Business

Social business, is a term defined by  Nobel Peace Prize laureate Prof. Muhammad Yunus.  He describes it as “a non-loss, non-dividend company designed to address a social objective within the highly regulated marketplace of today. It is distinct from a non-profit because the business should seek to generate a modest profit but this will be used to expand the company’s reach, improve the product or service or in other ways to subsidise the social mission”. Social Enterprise UK recognises this term as interchangeable in the UK with the term ‘social enterprise’, although social enterprise is the more commonly used term in the UK.

Social Capital

A term used to describe those resources (trust, reciprocity, and the sharing of values), which allow a community to function more effectively.

Social enterprise

A business driven by social and/or environmental purpose. They are trading organisations (their main income streams are revenues for goods and services provided, not grants or donations). Successful social enterprises generate surpluses or profits which are reinvested towards achieving their social mission. Their assets are often locked for community purpose.

Social Enterprise Mark

The Social Enterprise Mark is awarded to social enterprises by the Social Enterprise Mark Company. The Mark is intended to guarantee that a business is trading for people and the environment. Social enterprises must prove that they meet a set of qualification criteria, which is overseen by an independent Certification Panel to ensure fairness and consistency.

www.socialenterprisemark.org.uk

Social entrepreneur

An individual who recognises, launches and leads new business opportunities but is motivated by social goals rather than increasing their personal wealth.

Social firms

Social enterprises set up specifically to create jobs for people severely disadvantaged in the labour market.

Social footprint

This is an idea that is taking hold and is of great interest to Social Enterprise UK.  We plan for it to be a way of measuring the social change an organisation creates.  We aim for it to support organisations to become more sustainable businesses (social enterprises or otherwise) through better supply chains, employment policies and environmental behavior.   

Social franchising

Social franchising is the use of a commercial franchising approach to replicate and share proven organisational models for greater social impact. For more information on this topic read the Social Franchising Manual, published by Social Enterprise UK.

Social finance

Social finance is an approach to managing money that delivers a social as well as an economic return. Social finance includes community investing, microlending, social impact bonds, and sustainable business and social enterprise lending.

Social Impact Measurement

Social impact measurement is the process of trying to provide evidence that your organisation is doing something that provides a real and tangible benefit to other people or the environment.

Social Innovation

Social innovation refers to new strategies, concepts, ideas and organisations that meet social needs of all kinds - from working conditions and education to community development and health.

Social Licensing

The permission to replicate a social enterprise model, with the ‘parent’ social enterprise still defining the ethos and activities, but with less prescribed boundaries than a franchise and fewer obligations on the part of the licensee than would be required of a franchisee.

Social purpose business

Social purpose business is a term that has been coined by a number of large corporations working in public service delivery (for example the well-known welfare-to-work company A4E described itself as a social purpose business). They use the term because their ‘product’ i.e. the delivery of education, training or employment relates to society and how it is organised. This does not mean that they are driven by a social mission, in the way that social enterprises are. They are usually simply private businesses seeking to maximise profit – it is their product or the market they are working in that is ‘social’, rather than their reason for existence.

Social Return on Investment (SROI)

A form of social impact measurement. SROI is an approach to understanding and managing the impacts of project, organisation or policy. It is based on stakeholders and puts financial value on the important impacts identified by stakeholders that do not have market values.

Social Value

The environmental and social value as well as the economic value of any intervention.  

Supply chain

The network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers.

Third sector organisations

Organisations driven by a social or environmental mission rather than profit, including voluntary and community organisations, charities, social enterprises, faith groups and mutuals.

Triple bottom line

A company has a triple bottom line if it attaches equal importance to social and environmental objectives alongside financial objectives.

Work Programme

The Work Programme is a government initiative developed as a result of the Spending Review 2010 in order to create a single welfare to work programme to help the unemployed get back into work.

 

LEGAL

Charity

An organisation set up exclusively for charitable purposes and the public benefit.

Charities Commission

The regulator and registrar of charities in England and Wales.

Community Interest Company (CIC)

A relatively new type of company introduced in 2005 designed specifically for social enterprises that want to use their profits and assets for the public good. It combines the features of a conventional company form with elements of a charitable organisation, including a lock on assets to ensure they are held for the community benefit. Community Interest Companies can be limited by share or guarantee.

CIC Regulator

The Regulator of Community Interest Companies.  She is an independent official and her powers are set out in the Act and the Community Interest Company Regulations 2005. The Government expects the Regulator to be a “light touch regulator” who will encourage the development of the CIC brand and provide guidance and assistance on matters relating to CICs.

Companies House

The official UK government register of UK companies.

Company Limited by Guarantee (CLG)

A registered company with members rather than shareholders. A form of company used primarily for non-profit organisations.

Company Limited by Shares (CLS)

A registered company that is controlled by its shareholders. CLS shares may be privately held or, in the case of a public company, available to trade on the open market.

Exempt charity

A charitable industrial and provident society that is registered with the Financial Services Authority and therefore ‘exempt’ from registering with the Charity Commission.

Financial Services Authority

The Financial Services Authority (FSA) is the regulator of the financial services industry in the UK 

Industrial and Provident Society (IPS)

A legal form commonly used by co-operatives. IPSs fall into two categories:

  • bona fide co-operatives – these trade for the mutual benefit of their members
  • societies for the benefit of the community – these trade to benefit the broader community

Memorandum and Articles of Association

Together these two documents set out the constitution of a company.

Rules

The governing documents for an Industrial and Provident Society

PUBLIC SECTOR

Any qualified provider

Any Qualified Provider is a procurement model that clinical commissioning groups will use to develop a register of providers accredited to deliver a range of specified services within a community setting. The model aims to reduce bureaucracy and barriers to entry for potential providers and increase choice.

Asset transfer

The transfer of under-used land and buildings from the public sector to community ownership and management. 

Clinical commissioning groups

Clinical Commissioning Groups are groups of GPs that will, from April 2013, be responsible for designing local health services In England. They will do this be commissioning or buying health and care services including, elective hospital care, rehabilitation care, urgent and emergency care, most community health services, mental health and learning disability services

Commissioning

The cycle of assessing the needs of people in an area, designing and then securing appropriate service

Care Quality Commission

The health and social care regulator for England

Direct Payments

Payments made directly to patients in place of social care services allowing them to decide how their care is delivered.

Foundation trusts

Independent public benefit corporations that deliver healthcare (currently hospital or mental health services) and are modelled on cooperative and mutual traditions. Created to devolve decision making from central government to local organisations and communities.

Health and well-being boards

Health and wellbeing boards will be a forum for local commissioners across the NHS, public health and social care, elected representatives, and representatives of HealthWatch to discuss how to work together to better the health and wellbeing outcomes of the people in their areas. 

Outcome based commissioning

Where a commissioning body agrees on the outcomes they would like a service to achieve rather than the specification of the service itself or outputs.

Monitor

Monitor is currently the financial regulator for Foundation Trusts but will become the regulator for all health providers.

Mutual pathfinder

The mutual pathfinders is a programme being run by the Cabinet Office.  It is a group of public sector organisations that are hoping to take control of their own services and establish mutuals or social enterprises.  The programme provides them with a mentor and is also designed to help the government establish what support and structures will be necessary for the mutuals system to work.

Patient and Public Involvement Forum

Patient-led organisations, shortly to be abolished, who monitor the quality of services and seek the views of patients and carers.

Payment By Results

Where a commissioning body agrees to fund a provider on the basis that they will achieve particular agreed outcomes.  It is intended to create incentives to drive improved performance from providers.

Personal budgets

These are an allocation of funding given to service users after an assessment which should be sufficient to meet their assessed needs. Users can either take their personal budget as a direct payment (see above), or – while still choosing how their care needs are met and by whom – leave councils with the responsibility to commission the services. Or they can take have some combination of the two.

Personal budgets have been rolled out in England since 2008, with a target of providing every service user with one by 2013.

Procurement

Procurement is the full range of activities related to purchasing goods, services and works.

Primary Care Trust

NHS trust responsible for all local community and primary care services and for commissioning hospital services from other NHS trusts.

QOF

See Quality and Outcomes Framework.

Quality and Outcomes Framework

Nationally negotiated quality framework that forms part of the contract PCTs have with general practices.

Right to Request

The first policy of its kind to give staff (in this case primary care trust staff) the option to move out of the NHS and establish social enterprises.  The policy has now ended but has resulted in more than 40 social enterprises accounting for 10% of community care.

Right to Provide

A policy to give public sector staff the opportunity to move out of the public sector and establish social enterprises to deliver services.

Right to Challenge

A policy introduced in the localism bill to give local communities the ability to register an interest to bid to take over a local public service which they would like to run better or differently.

Right to Buy

A policy introduced in the localism bill to give local communities new powers to bid to take over land and buildings that are important to them and to save facilities that may be threatened with closure.

The Right to Buy covers assets (land and buildings) only. Under it a community may bid to take over a building (e.g. a library) but it would need to use the Community Right to Challenge if they wish to bid to take over the service that operates from the building (e.g. a library service).

Social Enterprise Investment Fund (SEIF)

A fund established by the Department of Health to support social enterprises operating in health and social care

Social value procurement

When purchasers take social, economic and environmental factors into consideration in   public procurement. 

Spin out

The process of moving an organisation from the public sector into a social enterprise or mutual model – to ‘spin out’.

Specialist Provider Medical Services

Similar to a Personal Medical Services (PMS) contract but patients do not have to be registered with the provider to receive care.

Strategic Health Authority

Regional link between the Department of Health and the NHS responsible for ensuring national priorities are integrated into local plans and PCTs are performing well.

TUPE

The ‘Transfer of Undertakings (Protection of Employment) Regulations’ preserve employees’ terms and conditions when staff are transferred to a new employer. 

FINANCE & INVESTMENT

Angel investment

An angel investor or angel (also known as a business angel or informal investor) is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital.

Blended return

A return on investment that combines a financial return alongside a social and/or environmental return.

Business readiness

Business readiness is the process of ensuring that a social enterprise has everything in place to best ensure it is robust and effective.  This includes strong financials, business plans, governance and human resources and IT.

Big Society Capital

Big Society Capital is the world's first social investment bank that will fund intermedaries from which social enterprises can borrow finance. It has been capitalised with funds from dormant bank accounts.

Community share issues

Community share issues are a way of harnessing the collective investment powers of communities to raise medium to large amounts of capital often in small individual sums from members of the community themselves.  It is about engaging communities to invest in themselves be it in a small village shop, a large scale housing development, a community recycling project or major renewable energy scheme.

Community Investment Tax Relief

The Community Investment Tax Relief (CITR) scheme is designed to encourage investment in disadvantaged areas. It gives investors who invest in accredited Community Development Finance Institutions (CDFIs),  tax relief on the equivalent of 5% of the amount invested per year, for up to five years.

Credit Unions

Credit unions are a type of co-operative, providing financial services to their members, often in areas of social and financial exclusion. Members of a credit union pool their savings together, these savings then provide a pool of funds from which loans can be made.

Crowd Sourcing 

This is the act of sourcing tasks traditionally performed by specific individuals to an undefined large group of people or community (crowd) through an open call.

Crowd Funding

Crowdfunding is an approach to raising capital for new projects and businesses by soliciting contributions from a large number of stakeholders following three types of crowdfunding models (1) Donations, Philanthropy and Sponsorship where there is no expected financial return, (2) Lending and (3) Investment in exchange for equity, profit or revenue sharing.

Debt

Debt finance, usually in the form of loans, maybe obtained from banks, specialist finance providers or supporters. This source of finance is available to any legal form although an incorporated form is preferable as the obligation to repay the loan is a substantial liability. 

Dividends

Dividends are payments made by a company to its shareholder members. It is the portion of profits paid out to shareholders.  When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be distributed to shareholders. Many corporations retain a portion of their earnings and pay the remainder as a dividend.

Enterprise Investment Scheme

The Enterprise Investment Scheme (EIS) is a series of tax reliefs designed to encourage investments in small unquoted companies.  The EIS offers both income tax and capital gains tax reliefs to investors who subscribe for shares in qualifying companies.

Equity

Equity investment means a company ceding part-ownership and selling shares in itself to a third party in exchange for capital. Not all legal forms will allow a company to receive equity investment. 

Gift Aid

A tax relief through mechanisms designed to encourage donations to charities

Golden share

A Golden Share is a nominal share which is able to outvote all other shares in certain specified circumstances, often held by a government organization, in a government company undergoing the process of privatization and transformation into a stock-company.

Grants

Social enterprises often receive part of their funding through grants from charitable foundations, government or European funds. Any legal form is able to accept a grant although charities tend to find funders more receptive. 

Impact investment

Impact investing is an investment strategy whereby an investor proactively seeks to place capital in businesses that can generate financial returns as well as an intentional social and/or environmental goal. This concept of combined financial and other benefits is known as Triple bottom line or Blended value. Impact investing is differentiated from Socially responsible investing in that an investor will proactively seek investments that generate both financial as well as specific social and/or environmental returns.

Investment readiness

Investment Readiness is being in a position to credibly present your business to different investors and meet their requirements

Micro-finance

Microfinance is the supply of loans, savings, and other basic financial services to the poor

Patient capital

Patient capital is typically in the form of investments designed to give an organisation time to develop and grow.

PIBS (permanent interest bearing shares)

PIBS are permanent interest bearing shares issued by building societies. They are a type of deferred share.

Quasi equity

A category of debt taken on by a company that has some traits of equity, such as having flexible repayment options or being unsecured. Examples of quasi-equity include mezzanine debt and subordinated debt.

Social Impact Bond

Social Impact Bonds (SIBs) are a form of outcomes-based contract in which public sector commissioners commit to pay for significant improvement in social outcomes for a defined population. The first SIB was developed by Social Finance.

Social Stock Exchange

The social stock exchange is a unique venture that will allow investors to trade exclusively in companies with social and environmental goals. This exciting new development is due to go live in 2013.

Social venture capital

Venture capital funds which target organisations with clear environmental and social objectives.

Special Purpose Vehicle or Entity (SPV or SPE)

A legal entity (usually a limited company of some type or, sometimes, a limited partnership) created to fulfill narrow, specific or temporary objectives. SPV/Es are typically used by companies to isolate the firm from financial risk.

Venture capital

Funds made available for startup firms and small businesses with exceptional growth potential. Managerial and technical expertise are often also provided. also called risk capital.

Venture Capital Trust

A venture capital trust or VCT is a highly tax efficient UK closed-end collective investment scheme designed to provide private equity capital for small expanding companies and capital gains for investors.

Venture philanthropy

Aims to apply the hands-on management techniques of venture capitalists to grant-making, to improve the quality, efficiency and effectiveness of the services offered by the organisations they invest in.

Working capital

Current assets minus current liabilities. Working capital measures how much in liquid assets a company has available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general, companies that have a lot of working capital will be more successful since they can expand and improve their operations. Companies with negative working capital may lack the funds necessary for growth. also called net current assets or current capital.