Social enterprise is a business model that puts people and community first, ahead of private or personal gain, while operating in a commercially viable and sustainable way.What are Social Enterprises?
- Social Enterprises are organisations or businesses set up to tackle social, economic or environmental issues.
- Driven primarily by social and/or environmental motives, they engage in trading or commercial activities to pursue these objectives and produce social and community gain.
- Profits or surpluses generated by the enterprise are reinvested to further their social objectives.
- Ownership of the enterprise is within a community, or amongst people with a shared interest.
- Social enterprises have a strong job creation focus to help local people and communities.
- Social Enterprises are committed to social justice and social inclusion.
Two other key components of the wider Social Enterprise ecosystem are Social Innovation and Social Finance.Social Innovation
Social innovation means new strategies, ideas, concepts and organisations that meet social needs. Social innovation aims to save or better lives, improve social ills and solve problems. Social innovation is often undertaken by social entrepreneurs and social enterprises. Social Entrepreneurs Ireland
defines 'social entrepreneurs' as individuals involved in the development of new, creative and innovative solutions to address the needs of specific communities or society in general. Social entrepreneurs are risk-takers with the commitment and drive to effect social change. The rate of growth in Social Enterprise Awards
and the number of applicants to the Arthur Guinness Fund
are just two indicators of a surge in interest in social innovation.Social Finance
Social finance is a means of providing support to social enterprises by way of repayable investment loans. Credit unions can be classified as social finance providers, although they are restricted in their lending to individuals and co-operatives. Clann Credo
was the first social finance provider in Ireland, established specifically to service the borrowing needs of community and voluntary groups and social enterprises.
The case for a national system of social finance was first made by the Dublin Employment Pact
and Clann Credo
in their document In the Common Interest – The Case for Social Finance
. In 2006, then Minister for Finance, Brian Cowen - established the Social Finance Foundation
(SFF) with funding from the Irish banks, to provide accessible and affordable finance. Since the creation of the SFF, securing development loans is no longer an issue for suitable projects in the social enterprise sector. However, access to appropriate start-up, equity and other building capital remains a significant challenge.Social Enterprise in Ireland
Social enterprise has a strong and growing presence in Ireland, building on deep roots of community organisation, self help and a native enthusiasm for enterprise. There is a wide diversity of Irish social enterprises, ranging in size from small childcare operations to large organisations like Rehab. They are active in virtually all spheres and address a range of unmet needs: environmental services, housing, sport and recreation, heritage and arts, training and education, childcare and transport.
Excluding credit unions, which are considered to be social enterprises, one estimate places the annual revenues generated by the sector at over €240 million and its annual spend in the economy at over €230 million. The sector employs over 9,300 people directly and indirectly supports a further 5,100 jobs. In addition, it is estimated that for every one person employed at least one other person works on a voluntary basis.
A high proportion of the expenditure of social enterprises goes directly into the local economy: both in wages and for supplies of goods and services. They are estimated to be at least 50% more labour intensive that the average enterprise. This has direct and indirect positive spin-offs for the local and national economy.
The credit union movement alone has almost 3 million members, over 500 local organisations, employs some 3,000 people, has combined assets of €15.1 billion and combined savings of €11.9 billion.