Partner Article

Social Enterprise ? What’s the Hype?

Last week saw the launch of Fast Forward Now’s ‘Doing it for Our Community’ event, bringing together local business people to share their experiences of Social Enterprise. It was inspiring to hear from those who are changing the way business is done and changing their communities for the better. This was the first event of its kind that we’ve organised, but it is one of increasingly more across the country recently.

Social Enterprise is a real buzz word at the moment. David Cameron’s ‘Big Society’ vision hinges on the development of businesses that look to tackle social needs and create change. But you’d be forgiven for thinking ‘social what?’! The area is fast growing, ever changing and it could be argued that is has come to mean different things to different people.

For me, Social Enterprise is to apply business principles to social problems. Whilst many organisations have a sense of social responsibility, the difference lies in the fact that they are ultimately driven by profits. Social Entrepreneurs are driven by a passion or desire to make a mark, no matter how big or small that mark may be. Rather than profits or surpluses going into a shareholder’s pocket, the focus is on reinvesting profits or surpluses into the organisation’s social objectives. It can also be in the not-for- profit sector, such as trading arms of charities. The important thing to remember is that it still must be enterprising.

Very few social entrepreneurs have the ambition of managing finance, but it is critical to ensure the growth and sustainability of businesses. With the lack of funding available following the economic downturn, many organisations are becoming more creative, trading goods and services instead of applying for grants. Whilst social entrepreneurs have a cause or a mission that drives the business, it must be remembered that the creation of profits or surpluses is an absolute necessity. Take the Grameen Bank, for example. Developed by Bangladeshi economics professor Mohammed Yunus in 1976, the bank pioneered ‘micro-financing’, extending small collateral-free loans for self-employment to some of the world’s poorest people. By 2007, the bank had lent 6.1 billion dollars to 7.1 million Bangledeshi villagers and allowed entire communities to better feed their families, build houses and send their children to school.

The success of the organisation is Yunus’ understanding that growth and good financial management mean that you can give back on an even greater scale. Social enterprises that recognise this make solutions to social problems a real possibility. It allows for creativity and innovation in a time of
economic and financial crisis that can foster sustainable growth and create new jobs. Whilst it might be a buzz word, and certainly isn’t a panacea, it’s definitely a step in the right direction. What do you think?

This was posted in Bdaily's Members' News section by Anelise Siddle .