What is a Social Enterprise?

The Department of Trade and Industry offers this definition:

A social enterprise is, first and foremost, a business. That means it is engaged in some form of trading, but it trades primarily to support a social purpose. Like any business, it aims to generate surpluses, but it seeks to reinvest those surpluses principally in the business or in the community to enable it to deliver on its social objectives. It is, therefore, not simply a business driven by the need to maximise profit to shareholders or owners.

Social enterprises are diverse and operate at many levels. They include local community enterprises, social firms, mutual organisations such as co-operatives, and large-scale organisations operating nationally or internationally. What they have in common is a commitment to meeting the social and financial double bottom line, with some adding a third - environmental.

While some social enterprises start off as businesses, most are in transition from their beginnings as voluntary sector organisations, dependant largely on grants and volunteers, and working to increase traded income. A recent National Council for Voluntary Organisations' (NCVO) report said that up to 35% of general registered charity income is derived from trading activities.

There is no single legal model for social enterprise. They include companies limited by guarantee, industrial and provident societies, and companies limited by shares. Some organisations are unincorporated and others are registered charities. Whatever the size, origin or nature of a social enterprise, it will be pursuing one or more of the following activities:

"Social enterprises embrace a variety of ways of working and the Government believes that successful social enterprises embody the following characteristics"