WHAT IS SOCIAL ENTERPRISE, AND HOW IS IT RELEVANT TO THE ARTS?

 

Convener:                 Trisha Lee – Artistic Director MakeBelieve Arts

 

Participants:              Steve, Roger, Helen, Paul, Jenni, Hayley, Mark, Ingo, Peth, Nick

 

Summary of Discussion, Conclusion and or Recommendations:

Trisha Lee explained why she convened the group. A year ago, she was appointed as a social enterprise ambassador for The Cabinet Office, and is becoming more and more acutely aware of how little knowledge there is in the arts about social enterprise, even though many arts organisations are socially enterprising.

We talked about funding for the arts, and how social enterprise can be about finding other ways of making money alongside funding streams.

We discussed what is a social enterprise?

Social enterprises are businesses with a triple bottom line including social, environmental and business aims.

Social enterprise is a business model, not a legal structure. Social enterprises can be charities, Community Interest Companies (CiCs), or companies limited by guarantee. Social enterprises trade, in order to fulfil a social purpose.

There was much discussion about what are social enterprises, so at the bottom of this report I've included a few definitions from the social enterprise coalition website. 

Social enterprises are businesses set up to tackle a social and/or environmental need.

We discussed how the arts can be very bad at valuing what we have as assets. and yet these assets can generate income for us.

Using our assets…

There was some discussion about possible enterprising ways to make money and about the arts looking at how businesses function and not being afraid to borrow from them some of their approaches to making money. 

One participant suggested life coaching and talked about a friend of hers, who took clients to look at Lions to find their inner predator, this, (being big amongst the corporate sector) is a possible way to make money to fund the art we want to do. Another person talked about someone who taught business people to juggle as a way of them excepting failure.

Could such ideas be used by companies to generate money for work rather than just lining pockets?

There was a lot of discussion around working with corporations and earning lots of money and using this money to fund the socially minded projects that we want to be involved in.

Possible problems

An issue that was raised out of this, was do we want to use our skills to empower hard nosed business people?

One person talked about a company, who were making money working by producing local authority toolkits, in order to fund projects that they wanted to be involved in. The problem this company found was that the demands of the local authority work ended up dominating the work that they wanted to be delivering.  

There were also discussions around the ethics of making money through corporate businesses, particularly those like Shell, whose business policies we disagree with. Improbable Theatre, ran an open space, the John Lewis, but would not be interested in running these with some unethical corporations.

The benefits

We talked about the strength of social enterprise being in it a lack of a precise definition.

Where in business, everything you do is driven by shareholder value, for example, google having a slogan that they will “do no harm”, the benefit of social enterprise is that they are businesses that are set up explicitly to do good, not just about being satisfied with doing no harm.

The exciting thing about social enterprise is that it acknowledges our right to earn a living from our art. We no longer have to hold a begging bowl.

The discussion moved briefly to the idea of energy being the new money... and how we quantify a social currency as a tool for measurement.

The group also acknowledged that for many in the arts, business transactions are seen as a little bit dirty.

More questions than answers were generated...

• What difference does it make calling ourselves social enterprises?
• Does it open doors for us? Could it open doors for us?
• What now?
• What's in it for me? Are there benefits to arts organizations who call themselves social enterprises?
• We talked a lot about raising the profile of the term social enterprise within the arts.
• Could we get the National Theatre to talk about social enterprise and its role in relation to them?
• Are there pockets of money available that could be used by arts organizations to help them in exploring how they could become more socially enterprising?

At the end of the session Trish took e-mail addresses of all participants and is looking to set up quarterly meetings with arts organizations to explore this further. Another possible idea is that opportunities are created for arts organizations to meet with social enterprises from other sectors to explore the relationship further. Trish will explore this. She will also discuss further with S.E.C (social enterprise coalition) about campaigning for benefits for the arts when defined as social enterprises.  

Definitions of social enterprise from the social enterprise coalition website,

http://www.socialenterprise.org.uk/pages/frequently-asked-questions.html

What are social enterprises?

Social enterprises are businesses set up to tackle a social or environmental need. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social and/or environmental purpose is absolutely central to what they do - their profits are reinvested to sustain and further their mission for positive change. 

What are the legal structures for social enterprises?

Social enterprises use a wide variety of legal forms including: 

• Community interest company(CIC) A CIC is a legal form created specifically for social enterprises. It has a social objective that is "regulated" ensuring that the organisation cannot deviate from its social mission and that its assets are protected. For more information on CICs, contact the CIC regulator - cicregulator.gov.uk
• Industrial and provident society(IPS) This is the usual form for co-operatives and community benefit societies, and is democratically controlled by their members in order to ensure their involvement in the decisions of the business.
• Companies limited by guarantee or sharesare the most common legal structure for businesses and often considered to be the most flexible particularly companies limited by shares. While they can ensure they have a social mission written into their Memorandum and Articles of Association, this is not regulated.
• Group structures and charitable status Tax is an important consideration for some organisations where the retention of surpluses is essential, particularly if they can't take on equity.  In these cases the tax breaks associated with charitable status can be an important factor.