Frequently Asked Questions

New to social enterprise? These FAQs might be able to help answer some of your questions

What are social enterprises?
 

A social enterprise is a business that trades for a social and/or environmental purpose. It will have a clear sense of its ‘social mission’: which means it will know what difference it is trying to make, who it aims to help, and how it plans to do it. It will (or will strive to) bring in most or all of its income through selling goods or services. And it will also have clear rules about what it does with its profits, reinvesting these to further the ‘social mission’.
 

Social enterprises come in many shapes and sizes from large national and international businesses to small community based enterprises (see question 2). But they all:

• Are businesses that aim to generate their income by selling goods and services, rather than through grants and donations
• Are set up to specifically make a difference
• Reinvest the profits they make in their social mission. Like any other business, social enterprises need to generate income and make a profit. But it's what they do with these profits that makes them difference.

Are there any social enterprises I would have heard of?
 

The Big Issue, John Lewis and Credit Unions, which provide low cost loans to people on low incomes often at a more favourable rate than High Street banks, are well known examples of social enterprises. In Wales Glas Cymru, the company that operates Welsh Water (Dwr Cymru) is a social enterprise.
 

The social enterprise community in Wales has a long history, with a number of established social enterprises and a strong record of community-led, grassroots development. Social enterprises operate in almost every industry, from health and social care, finance and retail to recycling, employment and even football clubs.

What is the Welsh Social Enterprise Coalition?

The Welsh Social Enterprise Coalition was established in 2010 as the national collective voice for social enterprise in Wales. As a representative body we work closely with our members and with them are helping to:

• Create a better environment for Welsh social enterprises to do business
• Enable and support the growth of the social enterprise sector in Wales
• Build networks so that Welsh social enterprises are able to share and learn from each other and to create new business opportunities

We do this by: listening to our members and acting on what they have to say; champion social enterprise as a dynamic business model; run campaigns to raise awareness of social enterprise and the benefits it offers, conduct research to build the evidence we need to postively affect change, inform the policy-making process and help shape future legislation concerning social enterprise, build networks so that our members can share knowledge and understanding and provide practical advice and support on a wide range of issues.

As a membership-led organisations, members are the heart of everything we do. Membership is open to all social enterprises in Wales, social enterprise networks and intermediaries and those who support social enterprise.
 

Please contact us for more information.

How big is the social enterprise sector?

According to research carried out by the Welsh Government, there are approximately 3,000 organisations carrying out social enterprise activity in Wales with a combined turnover of some £2.2 billion. They account for around 50,000 full and part-time jobs and over 100,000 volunteering opportunities across Wales.

Research by the UK Government suggests that there are around 62,000 social enterprises in the UK contributing at least £24 billion to the economy and employing 800,000 people.

Social Enterprise UK's 2011 Fightback Britain report into the state of social enterprise found that 39% of social enterprises are concentrated in the most deprived communities, 58% of social enterprises reported growth last year compared to just 28% of SMEs, and 57% predicted growth next year compared to 41% of SMEs.

What is the difference between a social enterprise and an 'ethical' business?

The two are distinct ways of doing business. A social enterprise's primary purpose is its social and/or environmental mission – it tries to maximise the amount of social good it creates balanced against its financial goals.

An ethical business however, concentrates on making a profit while at the same time looking to minimise its negative impact on society or the environment.

I'm interested in starting my own social enterprise, can you help?

Like any other business setting up a social enteprise will often require substantial advice and support. However, there are a number of organisations who can offer support. These include:

General Advice and Guidance - The Welsh Social Enterprise Coalition - We will help as much as we can and will point you in the right direction if we can't!
 

Business Wales - The Welsh Government's online information service for businesses in Wales.
 

Social Firms Wales is the national support agency for social firms (a form of social enterprise which is committed to creating employment and training opportunities for people who are furthest from the labour market)

Development Trusts Wales promote and support the growing network of development trusts in Wales.

Social Enterprise Ambassadors  - Ambassadors are leaders of some of the UK's most successful social enterprises

Finance - The Wales Cooperative Centre gives a guiding hand to cooperatives, social enterprises and community groups by providing flexible business support and finance.
 

Business Link has a step-to-step guide on the financial and legal side of setting up a social enterprise.
 

Charity Bank puts investors and savers in touch with organisations working for good causes within the community.
 

Triodos offers ethical savings, loans and investments that benefit socially responsible organisations.
 

Unltd Wales is the Welsh arm of the UK charity which was set up to promote the work of social entrepreneurs. They hold awards, training courses and have helped develop projects.
 

Big Issue Invest is a specialised provider of finance to social enterprises in the form of loans, participation loans and equity.
 

The National Lottery Fund - The lottery donates £25m to good causes every week, but competition for that money can be fierce. Find out here how you can apply.
 

Social or community bonds - A relatively new way for social enterprises to raise money, community bonds collect cash from investors working towards a shared goal, such as a community energy project. The money is held in a bond for five years, where it benefits the enterprise, before being returned.

What is Social Return on Investment (SROI)?

SROI is an approach to understanding and managing the impacts of a project, organisation or policy. It is based on stakeholders and puts financial value on the important impacts identified by stakeholders that do not have market values. For more information on the SROI project click here.

What are Social Clauses?

Social clauses (also called Community Benefit clauses) are requirements placed in procurement contracts and agreements that a procurer (government, local authority, business) enters into with a third party. They prioritise social needs in the procurement process such as the need to train or give jobs to the long-term unemployed in the local community. For more information please click here