What is a Social Enterprise?
Social enterprises are businesses that trade for the common good rather than unlimited private gain. They address social needs, strengthen communities, improve people’s life chances, enhance culture or protect the environment. “Social Enterprise” has no legal definition in Scotland but is defined through a Voluntary Code of Practice. (http://www.se-code.net/ ) developed in 2013 by a group of leading social enterprise stakeholders in Scotland. The Code emphasises that an organisation is considered a social enterprise as long as it seeks to gain financial independence through trading.
The status of being regarded as a ‘social enterprise’ has become increasingly important for many third sector organisations in the light of increasing funding programmes’ support of social enterprises, public sector cuts, and increasing public sector contracting.
In May 2014 the BIG Lottery commissioned EKOS to do a mapping of the SE community in Scotland. They found over 3,500 social enterprises; 57% generating more than 50% of income through trading; over 120,000 staff; and a joint turnover (2012/13) of almost £7bn. Please note that a 2015 Social Enterprise Census is taking place to provide an official count of the entire population of non-profit-distributing organisations that are carrying out some level of trading for the good of Scotland.
The following graph (SE graph developed by EKOS – http://www.senscot.net/docs/EKOSStudy.pdf ) provides a check-list for any organisation to see if they are in principle a social enterprise (without specifying the extent of income that needs to be generated from trading – thereby allowing for aspiring social enterprises to be considered).