Social enterprises in Scotland make a profit like any private business, but then use that money for good – Chris Martin

Social enterprises come in many different forms. The Camarados have set up a public lounge on a street in Falkirk to promote mental health awareness (Picture: Michael Gillen)

Recovery and renewal will take time, but it is essential that we do not go back to the way we were. Fairness and equality must be at the heart of our economy, and Scottish social enterprises will play a leading role in this.

You may know of a social enterprise that runs a local supermarket, art gallery, sports nursery or café in your area. However, you may not know that social enterprises generate over £2.3 billion for the Scottish economy, supporting over 88,000 jobs. Around two-thirds are run by women and around one-third are located in rural parts of Scotland.

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It is a diverse community and the ‘more than profit’ approach, which is at the heart of the social enterprise movement, is used by a wide range of organisations, of all sizes, operating in most sectors of the economy. The model works for many markets – selling goods and services to individual consumers, local authorities, government and private businesses.

Although the goal is to make a profit like any private sector business, these profits or surpluses are then reinvested for social and/or environmental purposes.

According to the latest 2019 census, there are more than 6,000 social enterprises in Scotland – and early data before the release of 2022 figures shows an increase, despite the impact of the pandemic.

There are certainly tough times ahead for businesses, as well as for households, but it is social enterprises that hold the key to bringing about the transformative economic change for local communities and people that our country will need.

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The Scottish Government has set out a broad strategy to develop the potential of social enterprises, with three priorities: boosting the sector; develop stronger organizations; and seize market opportunities.

Cabinet Secretary Shona Robison said “Scotland’s vibrant and innovative social enterprise sector must continue to be ambitious, driving our wellbeing economy with a dynamic offer that works nationally and international”.

And this week, Nicola Sturgeon encouraged businesses to adapt to new ways of working to revive the economy in the wake of the pandemic. The Prime Minister wants new ways of working that will contribute to a more resilient economy and a wealthier, fairer and greener Scotland.

At Social Enterprise Scotland we can help you implement this approach; which enjoys cross-party support in the Scottish Parliament. From Friday, we have been chosen by the government to become what we call the “Enhanced Single Broker” for the social enterprise movement in Scotland.

It will be our job to develop a strong and inclusive voice for all social enterprises. This means engaging with grassroots social enterprises, rural groups, social enterprises and community-led works in deprived urban communities to ensure they are all supported.

It also means that we will be held accountable for the public money received to ensure that all types of social enterprises are held in the same regard and share best practice across the sector.

It’s an energizing time for the movement, with a ‘transition group’ set up to support the move to a single body, led by Ian Welsh OBE, who was chief executive of Health and Social Care Alliance Scotland. Community conversations are also taking place across the country.

There are so many different types of social enterprises that can help build a fairer economy. Cooperatives and mutuals give members, customers or employees a direct stake in the business.

There are social enterprises that are created to create jobs and meaningful work, including training and volunteering, for people who face significant barriers to employment.

Community Interest Corporations (CICs) are set up by people who wish to carry out a business or other activity for the benefit of the community, and there are currently around 1,500 in Scotland.

Development Trusts are community owned and managed organizations focused on the economic, social, environmental and cultural needs of their community, of which there are over 250 in Scotland.

With the rising cost of living, credit unions are one type of cooperative that has an increasingly important role to play. Many operate in areas of social and financial exclusion, although more and more employers are now offering membership in credit unions – and they are increasingly used by ethical consumers.

The largest now offer a competitive range of consumer financial products. Today there are around 90 credit unions in Scotland, serving almost 415,000 members.

Finally, housing associations offer affordable housing for rent and sale. As real estate prices continue to soar, the availability of affordable housing is vital.

Housing associations prioritize those most in need and reinvest any excess income in maintaining or increasing their housing stock. Additionally, many support other social enterprise activities through community regeneration and tenant support.

As we prepare to become the “enhanced single broker”, we are committed to democratizing the voice of social enterprises in Scotland to ensure that all social enterprises, regardless of size, have an equal voice, as well as a louder voice. It is about developing a collaborative movement.

Other businesses can also support the positive impact of social enterprises by using their purchasing power to buy services and goods that have a social impact.

Consumers can play their part by purchasing products and services from social enterprises, making a real difference with their purchases.

This is an incredibly exciting time for our sector as we prepare to successfully implement a new inclusive model that will put social enterprises at the heart of Scotland’s future.

Chris Martin is Managing Director of Social Enterprise Scotland

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