Small social enterprises have comparatively high diversity and are more likely to be working in deprived areas than similar charities or larger social enterprises, a report has found.
The report, Trading for Good, was published by Social Enterprise UK and commissioned by the Lloyd’s Bank Foundation for England and Wales, in order to understand the impact of smaller social enterprises.
It concludes that charitable foundations and other funders need to change the way they work to offer more support to social enterprises, particularly small ones.
Some of the report’s key findings are:
- 31 per cent of social enterprises have a turnover under £50,000, and 86 per cent have a turnover under £1 million.
- The smaller a social enterprise is, the more likely it is to be led by a woman or someone from a minority ethnic background; 49 per cent are led by women, and 21 per cent have a BAME leader.
- Smaller social enterprises are less likely to be involved in public services.
- Twenty seven per cent of smaller social enterprises are based in the top 20 per cent most deprived areas, almost double the proportion of similarly sized registered charities.
- 69 per cent of small and medium-sized social enterprises support individuals from disadvantaged groups, and 43 per cent seek to employ them.
Some of its main conclusions are:
- A greater proportion of small and medium-sized social enterprises are choosing legal structures and identifiers which class them clearly as businesses operating in and for a community, rather than as a registered charity. Foundations and other support organisations need to accelerate their understanding and acceptance of these different models.
- The inclusive leadership of smaller social enterprises is not translating into the same levels of equality at the top of larger organisations.
- Foundations, social investors and government should focus efforts on organisations in places which are most likely to be hit hardest by changes in European and public sector funding – these are also the areas with the toughest challenges to solve.
- Councils and other local public sector agencies should develop strategies to better work with small and medium-sized social enterprises
- Foundations and social investors focused on employment and support for the most vulnerable should seek to support small and medium-sized social enterprises whose work will often be doing so at a community level