Member Article

Social Enterprise - Moving Forward

The term ‘social enterprise’ seems to be on everyone’s lips at the moment. I myself have been a director of a social enterprise called Tyne Gateway for over a year now. Tyne Gateway was initially a collaborative project set up by North and South Tyneside Councils to combat child poverty in the North East. This project has now been ‘spun-out’ as its own social enterprise, independent from the councils, having established the crucial networks so important for new business formation and future success.

The Community Entrepreneurs are the essence of the ‘barefoot professional’. This rests on the principle that as well as drawing on the knowledge and skills of traditional professionals, the development of policy and practice has a major impact when approached from a different angle. In the Tyne Gateway case, the Community Entrepreneurs have experience of living and raising a family on benefits, low income and in poverty. They are passionate about making a difference in their communities, and they demonstrate this time and time again. This is because they understand the target market - they have previously been the target market.

There are many hurdles to overcome in setting up a social enterprise – for example the variety of legal requirements associated with setting up the structure of the enterprise. Do you become a Trust - a way of holding assets so as to separate legal ownership from economic interest? The assets are owned by trustees and managed in interests of the beneficiaries on the terms of the Trust. Or do you consider a Community Interest Company (CIC)? Here the structure is similar to that of a limited company but tailored to social enterprise with secure ‘asset lock’ and focus on additional regulation to ensure community benefit. There are several structures you might want to consider including that of a charitable incorporated organisation, which aims to provide some of the benefits of being a company but without some of the burdens.

In all cases I would recommend seeking professional advice before your organisation adopts any of the legal structures available – you might want to consider contacting the Student Law Office at Northumbria University who can assist you in the decision making here.

Social enterprises vary greatly – just as commercial businesses do in size, age, origin, purpose, complexity, vision, culture and ownership. What they do have in common is their need to be sustainable and ‘do good’- the double (or multiple) bottom line. This calls for balancing objectives as what is right for achieving profitability needs to be right for the community – challenging for the best of us! Some tips to achieve this: just as in a commercial business make your vision clear internally and externally, think about the resources required to move the social enterprise forward, consider the wider environment (and the competition) and as always, remember to plan, plan and plan!

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