Social Enterprise – anyone run or work for one?
Oh knowledgeable STW…
I'm starting a business (can't really go into what at the mo) and right from the start I decided it was going to be not-for-profit in some form. I've only recently discovered the concept of Social Enterprises and it looks like what I might be after. I'm basically looking to cover my costs and potentially cover my living (it's only part time at the moment and it could stay that way, currently in FT employment) but ultimately I'd like to put profits into good causes.
Does anyone run one or work for one? And have I got it right?
I'm going to contact my local Social Enterprise body at some point but figured I'd throw the question out on here.
Cheers!Posted 8 years ago
Generally social enterprises plow any surplus back into whatever service they provide themselves rather than distribute profit out to other good causes.
Being not-for-profit doesn't mean you can't draw a wage, you just not accumulating or distributing profits (to shareholder for instance) over and above wages and costs of service delivery. At the same time your activity needs to be off benefit to somebody.
Perhaps look in Community Interest Companies as a model of a business (rather than a charity) that is not for profitPosted 8 years ago
I should add…… Many (all?) non profit structures require some form of constituted, voluntary board. If you are giving yourself a payment that board doesn't include you.
Thats why its referred to as the 'voluntary sector' even though plenty of people get paid. If you create a board the organisation is theirs, and not yours. Legally they carry the liability and nominally they can fire you. Having a voluntary board is a right royal pain in the tits for everybody involved (you and them) frankly.
If its a smallscale scheme, and as you suggest your notion is to pass profits on to other good causes, then I'd rather look at operating as a standard business / sole trader but make formal donations to charity and write those donations off against taxPosted 8 years ago
Having a voluntary board is a right royal pain in the tits for everybody involved (you and them) frankly.
Does this apply to CICs? I see all of your points and as this is my baby, I don't want to lose control or have it all get taken away from me. However, I am looking for that degree of credibility so want something kind of official at the same time.Posted 8 years ago
Without really knowing what you want to do…. Some kind of non-profit incorporation is kind of the defacto set up if you want to apply for grants and funds, although its not out of the question for a run-for-profit company to apply for funding so long as they deliver their project and account for it to show that theres no accrual of profits. Some organisations actually have two legal entities – one a charity one a business, the business can act as a contractor to the charity but also delivery activities that are within the organisations aims, but don't necessarily pass the 'test' as charitable. I'm not sure if CIC's require a voluntary board they're a bit new-fangled.
My thoughts are though: If you are only looking at doing this thing part time, why go to all the ball ache of setting up an enterprise. Might there be a body/charity/enterprise out there through whom you could offer and deliver your service? If there is money to be applied for, or which changes hands it goes through their books, if there are fees to be be paid for your time – they are paid as a wage to you. The service is still yours to supply, and you can take yourself and your service on from one body to the next.
I say this because there is all sorts of support, encouragement (and funding) to get a social enterprise off the ground, but bugger all out there to sustain one. But if your project can add a bit of spice and value to someone elses service then that, in the long run, might be better for you.Posted 8 years ago
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