What is Social Enterprise?

Social enterprises are defined as “businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or community, rather than being driven by the need to maximise profit for shareholders and owners”.

This means organisations that trade goods and services and use the majority of their profits for social and environmental goals. Some of famous examples of homeless social enterprises are The Big Issue and Jamie Oliver’s Fifteen restaurant, but there are at least 55,000 social enterprises with a combined turner over of £27billion per year. They account for 5% of all businesses with employees and contribute £8.4billion per year to the UK economy - almost 1% of annual GDP.. . Read case studies about the Spark social enterprises: Spark 2008 Click here Spark 2009 Click here.

Social enterprises tackle some of the most entrenched social and environmental challenges in an innovative way. They can come in many shapes and sizes, from community-owned village shops to large development trusts, and in many legal forms, including community interest companies, industrial and provident societies and companies limited by guarantee, among others.

Whatever form they take, social enterprises prove that social and environmental responsibility can be combined with financial success. They bring innovative ideas and a ‘can-do’ attitude and help the most excluded people in society. At the same time they raise standards for ethical business and corporate social responsibility.

Social enterprise is an area that both the Conservatives and Labour agree on.

On a recent visit to a 2009 Spark winner, Prime Minister David Cameron said, "I went to a brilliant social enterprise in Liverpool called HOME by Merseystride. This is exactly the sort of thing we need to spread across the country."

“In my view, social enterprise is the new British business success story, forging a new frontier of enterprise - a quiet revolution involving 55, 000 social enterprises in our country from the smallest community groups to the largest businesses” said ex-Prime Minister Gordon Brown.

• Why encourage social entrepreneurship in homelessness?