By Daniel Hunter
Results of a survey about attitudes to social enterprise among UK charities were released by Social Enterprise UK, and its findings are ‘overwhelmingly positive’, according to the national membership organisation.
Currently 45% of registered charities identify themselves as social enterprises and more than half of the voluntary sector’s income is earned through trading (selling goods and services) and delivering government contracts, rather than donations or grants.
In a survey of more than 100 charities, 92% said they would like to increase their income from trading and government contracts in the next three years.
When asked how they feel when they hear about social enterprise, 52% chose ‘excited’, 29% chose ‘interested and want to know more’, 12% chose ‘confused’ and only 7% chose ‘nervous’.
When asked what are the barriers to their charity becoming more socially enterprising, 49% chose ‘lack of appropriate business skills or experience among workforce’, 45% chose ‘lack of access to investments/loans’, 42% chose ‘lack of knowledge about social enterprise and where to start’. But 1 in 5 (18%) identified ‘scepticism from trustees’.
The majority of those surveyed (90%) said they are concerned that traditional voluntary and grant funding will become more difficult to secure in the coming years. Three quarters (74%) of respondents said there is not enough support available to help charities make the transition from voluntary to trading income, and two-thirds (63%) said more government support was needed.
Next week will see the UK host an event on social investment in run-up to G8. Social investments create a ‘blended return’ for investors - one that combines a social return as well as financial one. They can help social enterprises and charities raise capital that they might find difficult to secure from traditional investment sources.
“Charities are generally very positive about social enterprise and keen to trade to generate income. Social enterprise is gaining real traction and is better understood by the voluntary sector. It isn’t at all unusual for charities to be very business-minded now," Social Enterprise UK’s Chief Executive, Peter Holbrook, said.
“There will always be a need and a role for philanthropy, but charities wholly reliant on donations and grants can be very vulnerable to external forces out of their control. We have seen legacies tied up in a slowing housing market and while the jury is out on whether or not giving is down, austere times are here to stay and we’ve already witnessed some charities closing.
“The changing landscape is forcing charities to adapt. As public sector markets are opened up to competition, charities have to be business-savvy to bid for and win contracts, and able to prove their social impact. This is a new way of operating for many. But the hard-won Public Services (Social Value) Act that came into force this year provides a critically important tool for charities when selling their services to commissioners.”
Karl Wilding, head of policy and research at NCVO, said: “Enterprise in one form or another is a core part of what many charities do. NCVO’s research shows that the proportion of income the sector as a whole earns overtook the amount it receives in donations around ten years ago, and has continued to grow since.
“As the Marsh review highlighted the other week — enterprise is a skill that those in charities will increasingly need. We’re finding that our members are asking us more and more about commercial skills and strategy — and both Social Enterprise UK and NCVO can provide advice and support that’s right for our sector.”
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