Although much misunderstood, Social Enterprise in Scotland has been growing and developing steadily since the 1990s. In order to understand why you really have to understand what it is really all about.
Social Enterprises are really charity and business working together. A Social Enterprise is a business whose primary purpose is to achieve social and/or environmental benefits. Profits are invested into community benefits and cannot be taken out by owners, shareholders or other individuals.
Social Enterprises trade in all markets, selling goods and services to individual consumers, local authorities, government and private businesses. Social Enterprises exist to make a profit just like any private sector business. However, profits or surpluses are always reinvested into their social and environmental purposes. Social Enterprises also have an “Asset Lock”on buildings, land or other assets. Without making a profit social enterprises can’t meet their social or environmental mission; they must be sustainable. The term Social Enterprise should not be confused with private businesses who trade in an ethical way, charities that don’t do business (or trade very little) or public sector arms-length companies.
Social Enterprise UK defines social enterprise as follows.
Social Enterprises should:
Have a clear social and/or environmental mission;
Generate the majority of their income through trade;
Reinvest the majority of their profits;
Be autonomous of state;
Be majority controlled in the interests of the social mission;
Be accountable and transparent.
The social enterprise model has particularly taken off in Scotland from Cafe’s such as Social Bite which are social enterprises, they employ people from disadvantaged groups within the local community they operate in and give profit to charity. To local energy co-ops that sell their energy production to a local community. These businesses operate generally as green or clean energy co-ops. The energy is produced locally and sold locally making the whole system more efficient, clean and cost-effective (cheaper to the consumer). Again these companies will employ local people and profit is invested back into the community and energy production. Other Social Enterprises in Scotland include Community Food Initiatives North East (CFINE), Grampian Housing Association Limited, Instant Neighbour Furniture, Mixed Fish in Aberdeen, The Care Training Consortium, Castle Douglas IT Centre, The Creetown Initiative, Dalbeattie Community Initiative in Dumfries & Galloway, The Big Issue, etc.
Social Enterprise is a diverse and the more-than-profit approach is used by a huge range of organisations, of every size, operating in every corner of Scotland and in most sectors of the economy. A Social Enterprise is quite often a company limited by guarantee with an appropriate “asset lock” and social mission. It could also be registered as a charity (of which there are over 23,000 in Scotland), or a SCIO.
So why is Social Enterprise important for the future of Scotland?
Quite simply, a social enterprise works for the good of everyone, not for profit. It can generate income and provide goods and services all at local community level. Social Enterprise employs local people and does not rely totally on volunteer staff. Everyone gets paid.
The diversity of Social Enterprises being set-up in all areas of business in Scotland is formidable and it is the younger generation who are leading the way. There is so much development and innovation in this sector, it is the buzz word of the younger generation entrepreneurship has very quickly become social entrepreneurship.
Just think of the advantages, a local social enterprise that is put together to provide goods and services to the local community, employs local people and through its social aims benefits the local community not just financially but also with healthy, productive life-styles.
Social Enterprise plays a very important part in Scotland’s economy going forwards. It will provide sustainable, developing business that will outlast large conglomerates and corporations because Social Enterprise is living, and directly working with the individuals and organisations it is there to serve.
If you create a strong more successful local community and let it grow sensibly and sustainably the local community will make the larger community stronger and more successful. Will Social Enterprise play an important part in Scotland’s future?