State of Social Enterprise Survey 2009 - Executive summary
Social Enterprise Coalition
19.11.09

This report presents the findings of the State of Social Enterprise Survey 2009 – the largest survey of its kind of social enterprises in the UK. Its results are taken from 962 telephone interviews with senior figures within social enterprises. Its purpose is to shed light on the sector's size, structure, motivations, prospects, origins and future.

This report has evidenced that social enterprise is an increasingly important part of the UK's economic and social landscape. The challenge ahead is to ensure that it is understood by educators, financiers, legal and accountancy professionals, policy-makers and politicians – all of whom can support its growth.

Social enterprises operate at a wide variety of scales, but their economic impact is significant and growing

Social enterprises are recession-busters

Despite the recession, they're twice as confident of future growth as SMEs, with 48% of social enterprises responding positively as opposed to just 24% of SMEs. Additionally, since the economic downturn began, 56% have increased their turnover from the previous year whilst less than 20% have seen it go down.  This is a considerably better performance than SMEs in the UK, where only 28% increased their turnover and 43% saw it go down.

Social enterprises are profitable

Two-thirds of social enterprises are making a profit, a further 20% are breaking even – at the height of a significant economic downturn. 

Social enterprises vary widely in scale

Whilst some social enterprises are very large, with turnovers in excess of £100 million, the majority operate at small-business scales, with an average turnover of £2.1 million and a median turnover of £175,000. 

Social enterprises are different from the voluntary sector

The profile of social enterprise turnover is closer in size to that of the UK's small businesses, and comparatively larger than the voluntary/charity sector with which it is often confused or conflated.

Scale is important

Social enterprises appear to be more profitable, less grant dependent and faster growing once they reach a £1 million turnover.  However – there are numerous examples of social enterprises that have found a profitable, sustainable business model at lower turnovers.

Social impact is both the fundamental objective behind social enterprise and a daily fact of life through profit reinvestment

Social enterprise is a fundamentally different proposition from corporate social responsibility (CSR)

The most frequently cited reasons for setting up a social enterprise are driven by a desire for social impact such as 'putting something back into the community' (included in 45% of all responses). This is echoed by the stated core values of social enterprises which go far beyond just being exemplary corporate citizens.

Profit reinvestment for social goals is a reality

70% of respondents reinvested profits into development activities – expanding services or providing new services to their beneficiaries.

Social enterprises are a natural home for women entrepreneurs

The glass ceiling of traditional business is being effectively challenged in the leadership of social enterprises, where 41.1% of all board members are women, which compares to just 11.7% of board members in FTSE 100 companies and 4.9% in AIM-listed companies.  Furthermore, 26% of social enterprises could be described as 'women-led' – almost twice as many compared to small businesses (14%).

Social enterprise is a very diverse sector

There are few business sectors that don't include social enterprises

However, within those sectors, many have a focus on developing human capital through employment and training.

Social enterprises choose a wide variety of legal forms

Most enterprises (60%) are companies limited by guarantee, but the rest use a variety of legal forms.

It's very diverse

Whilst roughly half of the organisations surveyed came from a voluntary and community sector background, the other half come from every possible source – from entrepreneurial individuals all the way through to former public-sector organisations.

The scope of operations is mainly, but not universally, very local

Two-fifths work in their local authority area or in only one or two local authority areas (42%).  Slightly more than one in ten, however, operate on a national scale.

The public sector is already a key customer

As the economic and social benefits of contracting with social enterprises grow apparent, 39% of social enterprises report that over half their income comes from local and central government.

Community Interest Companies are,on balance, happy with their legal form

The most common response from CICs was that they have no problems to report about their legal form.

Finance is vital, and possible to raise

Finance is the oxygen of social enterprise

Finance and funding is both the greatest enabler when present (indicated in 56% of replies) and the greatest barrier by far when unavailable (indicated in over two-thirds of replies).

Social enterprise is as capital-hungry as small business

One-third of social enterprises have sought finance over the past 12 months – this is broadly comparable to the search for capital by SMEs.

Raising finance is possible

Social enterprises had, in fact, been successful in raising finance. Our survey shows that 71% got between 75%–100% of what they asked for.

Finance is mainly for growth

60% of all funding required by social enterprise is expansionary – investment for new projects/service development, capital investment such as plant or buildings, and expansion.

Business support isn't fully meeting social enterprise needs

Business support is not sufficiently tailored to social enterprise needs. Social enterprises search for support from many sources but a common theme is support from their peers within the movement. Government business support funding should be channelled into such products which are in demand.

See full document here http://www.socialenterprise.org.uk/data/files/stateofsocialenterprise2009.pdf