CEEDR

Centre for Enterprise & Economic Development Research (CEEDR),

Middlesex University Business School

Professor Fergus Lyon and

Dr Leandro Sepulveda

Mapping social enterprises: past approaches, challenges and future directions

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Introduction and objectives

Confusion and lack of clarity despite the resources allocated to ensuring a common set of methodologies

The issue of mapping continues to grow in importance

Loose definitions result in mapping exercises making political decisions about what is included and excluded, without clear explanation

Research questions• What are the approaches to mapping in the past?

• What are the different definitions used and how have these been operationalised?

• What are the implications for future mapping exercises?

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Why map?

Establish the scale of social enterprise activity especially for delivery of public services

Identify a baseline to measure impact in the future

Identify different segments of the social enterprise sector and develop targeted support

Know how many organisations are entitled to public sector benefit and fiscal incentives

But• Some argue that social enterprise defy definition

• Weariness of the continued debate

• Mapping examines what is present- not those thinking of moving into social enterprise activity

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Definitions A starting point

• “A social enterprise is a business with primarily social objectives, whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profits for shareholders” (DTI, 2002).

Loose definition allows those that define themselves as social enterprises to be included

Others define by using examples• “Including development trusts, community enterprises, housing

associations, football supporters’ trusts, social firms, leisure trusts and co-operatives

Ecotec (2004) identifies definition tests based on ownership, trading and social aims

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Research on mapping social enterprise

Local studies, building on directories and networks• Variable definitions based on interpretations of compilers

National mapping: IFF 2005 study: A survey of Social Enterprises across the UK.• Survey of Companies Limited by Guarantee and Industrial and Provident

Societies only, not included charities

• Asked respondents if they pursue a social, including environmental, goal

• Identified 15,000 social enterprises- but likely to be an underestimate

Annual Small Business Survey• Sample of 8640 small enterprises, 5% of those with employees and 5% of

those without employees said they were social enterprises.

• 55,000 social enterprises based on 5% of all enterprises with employees

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Defining ownership DTI (2004) define social ownership as “autonomous

organisations with a governance and ownership structure based on participation by stakeholder groups and trustees”

CIC, CLG, IPS, housing associations, and charities

Annual Small Business Survey (DTI, 2006) set a level of 50% of profit to be put to social aims

But: • Difficult to identify those that are Co Ltd by shares

• Are branches registered separately different organisations

• Defining autonomous- when large proportion of income from public sector

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Defining trading income

‘Income from sale of goods and services’ and ‘payments received in direct exchange for a product, service’

But

• Arbitrary cut off at 25% or 50%

• Distinguishing contracts from grants

• Membership subscriptions: distinguishing between donations and paying for ‘significant benefits’

• Data on sales and fees in Guidestar and other sources reliant on how accountants have allocated

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Defining social aims

‘Primarily social objectives’ – open to degree of interpretation

CIC test: social benefits that should extend beyond a membership group, unless these are socially disadvantaged/excluded – the reasonable person test

Charitable status test : 'charities must benefit the community at large or a substantial section within it. They must not entirely exclude those of limited means‘

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Difficult cases I Sports clubs

• improving health –

• but what level of fees make them exclusive, and does this exclude them

Residents associations • difficult to ascertain if they have a social inclusion agenda

Faith based organisations • many are trading through renting out space etc.

• Are they widely accessible and have social aims

Cooperatives• are they exclusive,

• is benefiting members a social objective,

• potential anti-social impact on non members

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Difficult cases II

Educational activities• are parent teacher associations, and other school trusts widely

accessible.

• Do independent schools with charitable status have social aims

• Universities- are they autonomous of the public sector?

Cultural organisations, theatres and art galleries

Trade associations and professional bodies

Clubs and hobby groups

Trade unions and political parties

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Conclusions

Political origins of the term social enterprise result in politically sensitive attempts to keep the definition open

So not just technical data collection issues

Each mapping exercise has to make political decisions about what is included. This is a socially constructed process and decisions should be explicit

Need for greater clarity and transparency

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Conclusions : future directions Fragmentation of research through regional mapping exercises

with no common approaches and different interpretations of the definition

Include or exclude certain types of organisations that do not feel like social enterprises, despite meeting the tests

Policy makers need to specify the parts of the social enterprise sector where they will focus their resources rather than excluding certain types from their definition

Future opportunities to be grasped: regional mapping exercises, local economic assessments, Third Sector Research Centre