Language Explained
Terminology in any field can be confusing.
The definitions here are intended to give insight rather than be the last word. Words in italics throughout this web site indicate entries in this glossary.
If we’ve still managed to confuse you, please let us know and we’ll make every effort to explain and define things more clearly.
Social Enterprise
According to the DTI's definition:
'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 profit for shareholders and owners.'
It's a concept that many people find difficult to grasp, but the key link is that while each is a business, their most important aim is to do good, rather than just to make profit.
Social enterprises are leading the way in public service fields such as recycling, community transport and housing associations. Their contribution is being increasingly recognised, through moves such as the appointment of a Government minister for the third sector and the creation of a social enterprise unit in the Department of Health.
The Big Issue is probably the UK's best known social enterprise but similar operations are found all over the country. There were more than 55,000 of them at the last count, making up 5% of the entire business community, with a combined turnover of £27bn per year.
Government figures suggest there are at least 55,000 social enterprises in the UK with a combined turnover of £27bn per year. Social enterprises account for 5% of all businesses with employees and contribute £8.4bn per year to the UK economy, almost 1% of annual GDP.
Social Economy
The ‘Social Economy’ refers to a third sector economy between the private sector (business) and the public sector (government). It includes organisations such as cooperatives, non-governmental organisations and charities.
Third Sector - (Cabinet Office Definition)
Organisations in this sector share the common characteristics of being non–governmental organisations which are value–driven and which principally reinvest their surpluses to further social, environmental or cultural objectives.
It encompasses voluntary and community organisations, charities, social enterprises, cooperatives and mutual’s both large and small.
European Funding Programmers
The European Social Fund (ESF) was set up to improve employment opportunities in the European Union and so help raise standards of living. It aims to help people fulfill their potential by giving them better skills and better job prospects.
The European Regional Development Fund (ERDF) resources are mainly used to co-finance:
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productive investment leading to the creation or maintenance of jobs;
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infrastructure;
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local development initiatives and the business activities of small and medium-sized enterprises.
Community Development Finance Institution (CDFI)
CDFIs are sustainable, independent organisations which provide financial services with two aims: to generate social and financial returns. They supply capital and business support to individuals and organisations whose purpose is to create wealth in disadvantaged communities or under served markets.
The CDFA (Community Development Finance Association) defines a CDFI as:
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Sustainable
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Independent
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Financial institution
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Providing capital and support to individuals or organisations
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To develop and create wealth in disadvantaged communities or under-served markets
The CDFA
The CDFA is the UK trade association for Community Development Finance Institutions (CDFIs).
Local Economic Growth Initiative (LEGI)
LEGI is a competitive bidding process established by central Government to provide significant new resources to tackle ‘worklessness’ issues in deprived areas through encouraging enterprise.
Community Interest Companies (CICs)
Limited companies, with special additional features, created for the use of people who want to conduct a business or other activity for community benefit, and not purely for private advantage. This is achieved by a "community interest test" and "asset lock", which ensure that the CIC is established for community purposes and the assets and profits are dedicated to these purposes. Registration of a company as a CIC has to be approved by the Regulator who also has a continuing monitoring and enforcement role.
