IS SOCIAL ENTERPRISE FOR YOUR CHARITY?
While some charities have been embracing the social enterprise model as part of their work for years, many are not and others are still in the dark about what social enterprise is. Trading to generate income is not for every charity and even though it can make an organisation more sustainable and help it grow, becoming a social enterprise is a gradual process with lots to consider. But there has never been a better time to do so.
The Social Value Act has the potential to open up public services markets to social enterprises. The Act requires public sector agencies – including councils and parts of the NHS – to consider wider social value when they’re commissioning services. They are now expected to consider the social benefits offered by organisations such as charities and social enterprises.
We’re also witnessing the rise of social investment. The UK is home to the world’s fastest-growing market for social investment –investment in businesses that offer both a financial and social return. Earlier this year, the Government launched Big Society Capital – a finance institution that has £600 million to invest. It invests in social investment intermediaries – specialist organisations that, in turn, invest in social ventures.
Read more in Why social enterprise? which aims to help you explore if social enterprise is right for your charity. For senior managers, chief executives and trustees.
FROM CHARITY TO SOCIAL ENTERPRISE: London Early Years Foundation
When June O’Sullivan joined Westminster Children’s Society in 1996, it was a traditional charity running nine small nurseries in the London Borough of Westminster.
Founded in 1903, the charity had a long history of working to give children the best start in life and a staff team committed to the charity’s objectives. As more funding became available under the New Labour government, the organisation was able to access new income streams but it remained dependent on a block grant from the local authority to support its work.
When she became chief executive in 2005, O’Sullivan decided that the charity had to become a social enterprise. She told Social Enterprise Live: “I was determined to move us away from the charitable model. I really didn’t like it at all. I didn’t want to ruin the ethos and the fantastic history the organisation had but I didn’t feel that if we were to rely on our charitable model we would survive."
The challenge was to turn the organisation from a grantdependent charity into a sustainable business while continuing to provide a service for children and parents who couldn’t afford to pay for it.
Part of the answer was expansion. The charity, renamed London Early Years Foundation (LEYF) in 2009, began to move beyond Westminster and opened nurseries in other London boroughs creating economies of scale: “Our business model is quite simple: increase occupancy; increase revenue; reduce costs. That’s it. It’s what you have to do.”
Initially, many LEYF staff were worried that the changes would mean they could no longer provide a service to the poorest children. It required a shift in culture and thinking to enable staff to understand the new approach and the benefits it would bring:
“What I had to explain to them is that we had to balance the business model so that you had a level of cash cow and a level of mixed-market – which is our majority – and that way we would actually be producing enough profit to give many more children a free offer.”
Where voluntary sector organisations delivering children and young people's services keen to know more about social enterprise can find: business support guidance; news about events workshops, surgeries and training opportunities; and best practice examples of social enterprises providing CYP services.
GUIDE: An Enterprising Future is for anyone working to provide children and young people’s services in the voluntary sector, interested in finding out more about the social enterprise model. You may have heard people talk about social enterprise and be wondering what it’s all about, or you might want to explore operating as a social enterprise, especially if traditional funding streams are drying up, or if you’re looking to generate income in new and innovative ways.
You're alone if you've never heard of social enterprise, or don't really know what it means. So we've written a very short document to help you make sense of it - What makes a social enterprise a social enterprise?
If you're a charity, measuring your social Impact is important. Find out how to measure yours. Find out more