We’re often asked about social enterprise by local women who’d love to do something positive for the local community, but also need to earn a living. Often the realities of needing to earn a wage stops people from getting involved in social enterprise, but it really doesn’t need to. Social enterprise is the same as any business, in that it can employ people (including the business owner) – the key difference is that as well as being a business it also adds value to society in some way too, so it really is win win!
We ran a short workshop at Local Women Local Enterprise last week with the help of Acumen, to help local women to get to grips with social enterprise. Our aim was to improve awareness and understanding of social enterprise, and reveal the opportunity that it might hold, as a way to start women on their journey to financial independence.
It was a really positive event, with fantastic, enterprising ideas discussed amongst the women who participated, and loads of enthusiasm for giving back to the local area at the same time as finding a way to move away from benefits.
What’s the difference between a Charity and a social enterprise?
One of the first questions we had the chance to answer during our workshop was the difference between a Charity and a social enterprise.
A social enterprise is a business that is motivated by social objectives. Money is generated from selling a service or a product but unlike a typical business, all profits generated will go back into the business to impact the community or cause. Social Enterprise UK use this description for a social enterprise: “Social enterprises are businesses that trade to tackle social problems, improve communities, people’s life chances, or the environment. They make their money from selling goods and services in the open market, but they reinvest their profits back into the business or the local community. And so when they profit, society profits. ”
A Charity differs as their main source of income tends to come from grants and donations. Social enterprises may also be eligible for some grants and funding support.
How can you earn an income through social enterprise?
Both social enterprises and Charities have paid and voluntary workers. By working as part of or for a social enterprise, your income will depend on your role and the hours that you work, just the same as with other companies and businesses. If you set up a social enterprise you would pay yourself a wage according to the work you’re doing, the time you’re spending and the profits you’re making.
How can a business help society?
There are 3 main models of social enterprise we talked about in our Getting to Grips with Social Enterprise workshop last week, providing us with loads of ideas about how you might set up and run a social enterprise.
- Selling a product or service that doesn’t have a direct social impact in itself, but the proceeds from the enterprise activity do. For example, the One Foundation sells bottles of water in shops and 100% of its profits are donated to fund water projects in Africa. (It’s probably worth pointing out again that the profits are what’s left after the salaries and other costs are covered – the people who work for the One Foundation do get paid).
- Undertaking a business activity that has a direct social impact, but doesn’t necessarily return all of the profit from the activity to society. For example, Divine Chocolate. Chocolate is sourced and produced fairly – the FairTrade activity is its social purpose – and profits go back into the business, and a proportion are then used to deliver community projects in Africa to empower women and children and provide education. The rest goes to the shareholders.
- Selling a product or service that has a positive impact on society, and where profits are also spent to benefit others. For example, Toms one for one campaign. Every time a pair of Toms shoes are sold, a pair is donated to a child who doesn’t have any shoes in Africa and South America. Toms have now expanded their activities into eyewear and coffee.
If you’d like to know more about setting up a business, to help you to make money for yourself as well as make a difference in some way to society, hopefully this may have given you a few ideas. If you’re a women in Newcastle who’d like some support to get your ideas into action, get in touch.