The Current and Changing Roles of Social Enterprises - Term Paper Example

Executive summary

Social enterprises can either be for-profit or not-for-profit organisations, whose primary aims are to make profits, as well as provide social, cultural and environmental sustainability of the locals. The following report focussed mainly on the developments through the social enterprise module. It highlighted the current and changing roles of the social businesses in the world, besides making the comparison of the changes to real case situations in some enterprises, majorly in the UK. The report found out that the social enterprises experienced new trends in their high focus on local development, improved innovation and experimentation and rise in reaching out to the socially excluded persons. Additionally, it recommended on the additional areas where the sector can put more focus to expand their goals of making profits and serving community social and cultural interests.

Chapter 1: Introduction

1.1 Definition of Social Enterprise

Social enterprises refer to the businesses that use revenue-generating approaches to make improvements in the human and environmental well-being (Defourny and Nyssens, 2010, p. 32). They operate as either for-profit or not-for-profit institutions, taking the form of mutual organisations, cooperatives, benefit corporations, charity groups or community interest based. The primary distinguishing factor of these enterprises is the fact that their core is that aspect of their social mission. The organisations have two foremost goals, comprising the achievement of cultural, social community economic and environmental results. The other goal is to earn revenue.

1.2 Working Definitions of Key Terms

• A social entrepreneur refers to a social innovator, one who addresses a critical social problem in a certain innovative or efficient way. The term could also refer to the entity that utilises entrepreneurial business activities to generate incomes, alongside furthering its mission.
• Capacity building is the development of the social enterprise’s fundamental capabilities and skills, which comprise; leadership, business planning, financing, infrastructure, impact measurement and systems, so as to facilitate its effectiveness and capacity to advance its mission plus sustainability.
• Self-sufficiency is the capability of funding the future of a non-profit enterprise using the income earned only.
• Sustainability is the capability of funding the future of a not for profit organisation through a mix of earned income, charity contributions alongside other public sector aids.
• Dependency under this topic refers to the old traditional models for the not-for-profit organisations where they depend exclusively on donations and public sector subsidies, given that earned income is limited.

1.3 The Relevant Organisations

• The Big Issue – offers homeless people and those at risk of becoming homeless.
• The Camara – responsible for digital literacy training in educational facilities
• Charity Bank – gives loans to other social businesses on valuable terms.
• The Cooperative Group – provides retail business in food and financial services, legal and funeral care services
• The Technology Trust –provides charity while aiming to assist non-profit organisations to strengthen their impacts through the strengthening the use of Information Technology.

Chapter 3: Literature Review

When referring to social enterprise, it is an umbrella term that envelope many models and structures. The individual enterprises in this concept have various roles that are different from each other. Among them include the social firms, which have a primary role in the provision of employment opportunities and training for the disabled persons in the communities (Katz and Page, 2010, p. 59). For example, this is the chief purpose of the Concept Conference Centre, which is a social enterprise in the UK, and among their social roles includes the employment of not less than 25% of the blind. 50% of their income is from trade (Social Enterprise West Midlands, 2016, p. 1). Additionally, they train the blind that usually have difficulties acquiring employments in outside settings. Besides, development trusts are enterprises that emphasise on environmental, social and economic renewal of particular geographical locations in communities. For example, the All Saints Action Network, based in the UK, has an overall social role of bettering the quality of lives of the persons living in Wolverhampton’s All Saints area. Among the ways it uses to implement its social functions include working with the locals, engaging them in improving the services around their residential area. Additionally, the institution provides opens routes to the employment of the locals through training them to build their capacity and skills, besides reducing environmental impacts in and around All Saints, through advocating for the reduction in consuming of scarce resources.

Additionally, the credit unions are social enterprises that offer saving and lending services, for example, the 6 Towns Credit Union (Doeringer, 2010, p. 291). It is a UK based business that has the social roles of regulating the financial service industry in the country through adherence to the Financial Conduct Authority. Besides, its function also includes the prudential regulation of deposit taking, significant investments and insurances. Therefore, the social role of this institution is to ensure financial stability. The community Development Finance Initiatives give loans and aids to businesses and people who have problems in accessing the conventional economic systems, the Aston Reinvestment Trust being one of such. The organisation gives up to £150000 loans to banks and other financial institutions. Besides, they provide the facilities with specialist advice, fund small firms and invent communities wealth beyond welfare. Therefore, the social role of the enterprise is that it ensures that well-being of the people even if they have difficulties accessing funds through the provision of assistance to the financiers. Cooperatives operate according to the international co-operative principles (Defourny and Nyssens, 2010, p. 231). They are numerous in number assisting consumers, workers, food production and even agriculture.

Leisure trusts are also part of the wider umbrella of social enterprises, having the role of independently running the recreation systems of the local authorities (Defourny and Nyssens, 2008, p. 202). In the UK, several of them are present, running the museums, libraries, and sports facilities, like the Halo Leisure, which is a registered social enterprise that operates 19 leisure and sports centres in Bridgend County, Herefordshire and Shropshire, all on behalf of the local authorities. It is a not-for-profit organisation, and the money made gets ploughed back into the institution. The enterprise trains sportsmen and women daily, preparing them for national and regional competitions. Therefore, the social role of the organization is its purpose in ensuring that the cultural and social development of the athletes is of good standards. The football supporters’ trusts act to draw members from places where teams have their home grounds, having a role in making the links between the fans and the clubs stronger (Dart, 2004, p. 411). For instance, the Telford United Supporters Trust is one social enterprise that rallies the supporters of the club together, making strong links between them and the club, therefore making their social role apparent in ensuring social and community results. Housing associations are social enterprises and companies that manage housing stock. An example is the Aspire Housing in the UK that offers affordable mortgage services. It controls almost 85000 houses, majorly in Newcastle-under-Lyme, Stafford and South Cheshire (Dart, 2004, p. 412). Their social role, therefore, implies that the organisation assists the clients in managing their tenancies.

Chapter 4: Discussion

4.1 The Changing Roles of Social Enterprises

Social enterprises today are slightly becoming different from their traditional ways in several ways, which are of particular advantages to the community. For instance, today, they have a high capacity to innovate and conduct experiments compared to their previous practices of business (Defourny and Nyssens, 2008, p. 205). It is because they have the design to fill the gaps that exist in the services and those that the private and public sectors cannot provide. For the traditional enterprises, they conducted fewer experiments that could change their provisions to the community. For instance, they never participated in the programmes that would provide funds to the financial institutions, with fear of less profitability. The major factor that has contributed to their likeliness to experiment on such assistance is because of their shift to not for profit nature.

Additionally, currently, there is an increase in the rate at which social enterprises reach out to the socially excluded individuals in the society (Defourny and Nyssens, 2008, p. 207). It has considerably been on the rise by the provision of volunteering, training and job opportunities to such populations in the recent past. The poor people in the society currently have access to services that these enterprises provide, which include the housing facilities and financial support. Due to the current concentration of many social businesses in becoming not-for-profit oriented, their focus has considerably been on the role to ensure social equity to ensure community outcomes even to the poor by providing these services.

Another noticeable new trend in the social businesses is that currently, they mostly have the set up to retain and reinvest their profits back into the system of their local economy. Since their current focus revolves around the two goals of gaining profits and achieving cultural, environmental and social results, the today social institutions ensure that more than 50% of their profits are from the business they make (Defourny and Nyssens, 2008, p. 211). Additionally, they ensure that much of the revenue they obtain also aim to the achievement of the development of the residents. Compared to the traditional enterprises that majorly used their gained profits for their expansion, therefore, the new trend among the today social businesses is apparent that much of their ploughed back profit goes to the development of the locals.

4.2 Comparison of the Findings to the Literature

The capacity of today’s social enterprises should be innovative and participate in experiments that correspond to the practices of most of the current businesses that take consideration of communities, their cultures and social life into focus. For instance, the development trusts like the All Saints Action Network have to conduct the experiments on how they can do social and economic regenerations in various geographical locations (Social Enterprise West Midlands, 2016, p. 1). Additionally, the leisure trusts need to be more creative in the way they carry out the sports and recreational activities on behalf of the community local authorities. Hence, it becomes apparent that the change in the role of the modern social enterprises is evident on the innovative nature of these businesses and their willingness to experiment.

Additionally, the desire of social organisations to reach out to the socially excluded persons in the society is an emerging trend that most of the businesses indicate. For instance, the social firms like the Concept Conference Centre train the physically challenged people in the community to have their employments (Defourny and Nyssens, 2010, p. 43). Specifically, the blind or partially impaired people have limited access to jobs, therefore becoming socially neglected. However, the Concept Conference Centre provides the forum for enabling these populations build their capacities and have jobs. Alternatively, the Community Development Finance Initiatives give loans to people with difficulties obtaining funds. For this role, therefore, the likes of Aston Reinvestment Trust reach out to the needy in the community, maintaining their social roles.

Furthermore, the capacity of social enterprises to plough back their finances back to the business while at the same time reinvesting their profits to the local economy is a trend that most of them currently practice. Most social enterprises are self-sufficient and can fund their future activities using the income earned without external charities. Regarding the Aston Reinvestment Trust, it can give up to £150000 loans’ worth to the local populations (Doeringer, 2010, p. 297). In this case, it ensures that much of the profit it obtains from the business goes to the development of the community around.

Conclusion

Social businesses have the goals to make revenue as well as secure cultural, community and social economic and environmental results. They are numerous in number, and can fall in various classifications such as the social firms, development trusts, credit unions, cooperatives and leisure trusts. In the UK, examples include the All Saints Network, the Concept Conference Centre and the Big issue. Among the changing emerging trends in social businesses include their capacity to develop the local economy, their increased innovation and experimentation and reaching out to the socially neglected populations in the community. Therefore, these businesses have significantly assisted in the improvement of the society through supporting the communities and improving their environments.

Recommendations

• The determination of public policy that regards social cohesion and the development of local areas should involve more of multi-stakeholder cooperation and solidarity.
• It is crucial to make changes to the infrastructure eligibility criteria such that it includes a wider range of not-for-profit and community-based social enterprises that access the available financial provider.
• Creating tax incentives for social businesses can have the effect of encouraging the social business activities, in particular for the not-for-profit ones through cutting down their costs.