What the Third Sector Offers Paula Denison Social Enterprise Support Centre Pennine Camphill Community Boyne Hill, Chapelthorpe Wakefield WF4 3JH tel [phone] [e-mail] www.sesc.info

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What the Third Sector OffersPaula
DenisonSocial Enterprise Support CentrePennine
Camphill CommunityBoyne Hill, Chapelthorpe
Wakefield WF4 3JHtel 07714097544paula.denison_at_
sesc.infowww.sesc.info
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Aims

• Define the regional context
• Define the social economy
• what do they do?
• Definitions What is a SME? what is a social
  enterprise, added value? Social benefit?
• Trends
• Access
• Issues
• Further information

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Small to medium enterprise (SME)

• The definition of a SME (small to medium
  enterprise) is a business or company that
• has fewer than 250 employees
• has either (a) an annual turnover not exceeding
  50 million (approximately 24 million) or (b) an
• annual balance sheet total not exceeding 27
  million (approximately 16 million) and
• 25 or more of the capital or the voting rights
  are not owned by one enterprise, or jointly by
  several enterprises falling outside this
  definition of an SME

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The social economy

• consists of not for profit companies, charities
  and unconstituted groups engaged in trading
  activity to earn all or part of their income
• This trading activity is recognised as social
  enterprise however some groups may have their
  own reasons for not wanting to be known as one!

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What is a social enterprise?

• A social enterprise is a business with primarily
  social objectives whose surpluses are principally
  reinvested for that purpose in the business or in
  the community, rather than being driven by the
  need to maximise profit for shareholders and
  owners
• A social enterprise is, first and foremost, a
  business.

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Third sector?
Public Sector
Private Sector
Third Sector /Volcom
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Regional context some facts

• Population 5,854,357
• Employment Rate 73.8
• Unemployment Rate 5.1
• Number of businesses 130,960 (VAT Registered)

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Social economy activity

• Estimated 2,200 social enterprises in YH
  according to the recent SBS 2005 survey.
• Employ approx. 90,000 people in the Region
• Contribute approx. 1.5 billion to the Regions
  Economy
• Nationally the sector is equal to the UKs
  Agricultural sector

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Yorkshire Forwards priorities

• RES, Objective 1. b) ii.
• To support specific needs of new social
  enterprises through mainstream business support.
• RES Objective 4. d) i, ii.
• i) To utilise and build the capacity of the
  voluntary sector and social enterprises to
  deliver appropriate mainstream services.
• ii) To support successful Development Trusts, or,
  similar anchor bodies in local communities that
  give them a voice and route to improving their
  areas.

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Investment

• Over 20m investment up to March 2010 across the
  Region.
• 4 programmes funded via Sub-Regional Investment
  Planning process
• Partnership between existing Third Sector
  support organisations and Business Link Operators
  
• Enterprise focus
• Financial sustainability (asset development,
  private sector investment, procurement)
• Links to mainstream business support
• Building the capacity of the support
  infrastructure (two-way process)

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What we are doing

• High quality business support and advice
• Access to Finance emphasis on blended funding
  packages (Key Fund, PIF, Sirius, CDFIs)
• Investment/Contract readiness
• Procurement
• Skills Development
• Social Accounting/Auditing/SROI
• RD
• Networking

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What do they do?

• In trading terms, at the broadest level, social
  enterprises can be characterised as falling into
  five broad sectors, according to the principal
  trading income source
• Health Social Care 33 of all social
  enterprises
• Other Community, Social or Personal Services 21
  
• Real Estate / Renting 20
• Education 15
• Wholesale / retail 3
• A Survey of Social Enterprises Across the UK,
  Research Report prepared for The Small Business
  Service (SBS), by
• IFF Research Ltd, July 2005

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Trends

• Nationally, the charity sector is set to grow
  creating 10,000 new jobs year on year
• Locally, a massive decline in grant sources means
  20-50 of the voluntary/ community/faith sector
  will be gone by April 08
• Nationally 38 of earned income is from the
  public sector - regionally this figure could be
  as low as 22

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What makes a social enterprise different?

• 4 key areas
• Stated Social Aims
• Social Ownership
• Trading
• Profit distribution

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Social Ownership

• Who owns the company?
• Traditionally, Trustee/Directors were either
  voluntary or if paid non voting. This is changing
  with the introduction of new structures
• Directors should not seek to profit from
  membership of the organisation
• There are clear guidelines on the role of
  trustee directors from the Charities Commission
  which apply to organisations registered as
  charitable companies.

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Forms of incorporation

• Industrial and provident society (IPS)
• Regulated by the FSA
• Company limited by guarantee (LTD)
• Regulated by Companies House
• Company limited by shares (LTD)
• Regulated by Companies House
• Community interest company (CIC)
• Have own regulator

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Social Aims values driven

• Provide work opportunities to excluded groups
  (long-term unemployed, individuals with
  disabilities, ex-offenders, individuals with
  dependency problems)
• Core services have social benefits e.g. elderly
  care, combating obesity, reducing exclusion from
  school, reducing smoking, reducing teenage
  pregnancy
• Environmental

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Values measured in Social Auditing

• We talk about the triple bottom line
• Profit impact
• Environmental impact
• Social impact
• Used to measure the social return on investment
  (SROI)

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Added Value

• Economics term increasingly used in social
  accounting to refer to the social, environmental
  or economic benefits, which an organisation
  delivers, sometimes called social added-value

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Selling Added Value

• A new programme that identifies the additional
  value provided by an organisation when delivering
  services
• Measures incidental benefit
• You get it whether you want it or not!
• It has a value sometimes as great or greater
  than the contract value itself

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Harness the added value

• More for your money publication from SEC
• 1. Meeting more than one objective with the same
  expenditure
• 2. Having a competitive advantage in delivering
  particular goods and services (tend to be more
  competitive than statutory agencies)
• 3. Delivering innovative solutions and
  stimulating new markets
• Source More for your money, SEC

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CASE STUDY

• CASAC
• Values
• CASAC will strive to create efficient security
  services providing good value for money for all
  stakeholders.
• CASACs efforts should be ultimately targeted at
  those most vulnerable to crime and the fear of
  crime, and those with the least resources to
  respond on an individual and/or community basis.
• CASAC is in a constant process of learning and we
  will strive to improve our understanding and
  responses to vulnerable communities.

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Casacs social benefit/added value

• Staff 20
• Turnover over 1 million
• Key stakeholder WY police
• main service delivery community safety,
  response service to victims of burglary
• impact of delivering that service reduction of
  crime in targeted neighbourhoods, reduction of
  fear of being a victim

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Accessing the sector

• Use existing networks
• Social Enterprise Yorkshire and the Humber
  (www.seyh.org.uk)
• Social Enterprise Link has industry sector
  networks online at www.sesc.info over 1,000 third
  sector members
• Tender Alerts newsletter sent to network members
• CVS/ voluntary action groups have extensive
  mailing lists
• Specific member organisations such as Recycling
  Action Yorkshire (RAY), Keeping House, Volition

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Issues around access

• Recent focus group identified the following
• Large contracts are convenient for Departments
  etc but create barriers for smaller enterprises
  they also reduce procurers range of choice and
  competition. LAs urged to address this at high
  level as a way of supporting and developing the
  local economy and regeneration.
• Procurers in the public sector show mistrust of
  the Volcom/Social Enterprise and inflexibility by
  stipulating short term contracts and punitive
  payment terms e.g. 90 days.
• Procurers should operate a level playing field
  with suppliers e.g. if commercial suppliers are
  not required to show proof of spending then it
  should not be required from Volcom/Social
  Enterprise suppliers.
• Strategic co-operation by LA and the PCT over
  services with common features e.g. care could
  enable them to synchronize and issue contracts at
  the same time for the same period. This would
  help the sector to plan, develop capacity,
  improve sustainability and improve competition in
  tendering.

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Further information

• Social Enterprise Coalition
• www.socialenterprise.org.uk
• Office of the Third Sector
• www.cabinetoffice.gov.uk/third_sector
• Social Enterprise Link
• www.wyselink.co.uk