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 Social Enterprise Coalition's definition:
The government defines social enterprises as businesses 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.
What that essentially means is that they are businesses driven by social and environmental objectives. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose is central to what they do. Rather than maximising shareholder value their main aim is to generate profit to further their social and environmental goals.
Well known examples of social enterprises include The Big Issue, Jamie Oliver's restaurant Fifteen, and the fair-trade chocolate company Divine Chocolate.
According to 2005-2007 data from the Annual Survey of Small Business UK, there are approximately 62,000 social enterprises in the UK with a combined turnover of at least £27 billion. Social enterprises account for 5% of all businesses with employees, and contribute £8.4 billion per year to the UK economy.
The social enterprise movement is inclusive and extremely diverse, encompassing organisations such as development trusts, community enterprises, co-operatives, housing associations, social firms and leisure trusts, among others. These businesses are operating across an incredibly wide range of industries and sectors from health and social care, to renewable energy, recycling and fair trade.
Social enterprise is a business model which offers the prospect of a greater equity of economic power and a more sustainable society - by combining market efficiency with social and environmental justice.
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.
