News

June 22, 2010

Social enterprises misunderstood by half of people

Nearly half the adult population is unsure what a social enterprise is, despite this type of business being the fastest-growing in the UK economy, new research has found.

The poll of 2,000 adults commissioned by O2 and Social Enterprise magazine revealed that many people were confused about how social enterprises actually worked, with 56 per cent believing they are always funded through grants and donations, rather than trading like normal ‘for-profit’ businesses as many social enterprises do.

Similarly, the poll revealed confusion over what constituted a social enterprise. While 56 per cent correctly identified the Big Issue as a social enterprise, 49 per cent said Shelter belonged to the sector when it is a traditional charity.

Business Link defines a social enterprise as a business with primarily social welfare objectives. Any profits are largely reinvested in the business or community, rather than given to shareholders and owners.

The survey also found that most people also tended to underestimate the buoyancy of the social enterprise sector. While 56 per cent of social enterprise firms had outperformed mainstream small businesses during the downturn, seven out of ten people surveyed assumed that they would have performed the same or worse.

O2 head of small business marketing, Sharon Pickford, said a clearer public grasp of how social enterprises worked and the part they played in delivering government services was needed.

“The public need to understand the unique benefits that social enterprises can bring,” she said. “For example, by delivering not only on a commercial basis but also addressing wider community needs, social enterprises deliver fantastic value for money.”

However, Ceri Jones, head of policy and research at the Social Enterprise Coalition branded the survey results “positive”. “It’s not surprising that there is not yet established understanding of social enterprise – it’s a relatively new term which has only begun to be widely used in the past few years,” she said.

“On top of this, social enterprises come in a wide variety of shapes and sizes and operate in almost every industry in the UK, so they can be hard to spot,” added Jones.

“Improved communication with the public through initiatives like the new Social Enterprise Mark should help promote the sector,” she said.

The Mark, which launched earlier this year, is awarded to businesses that can prove they are working to social or environmental goals.