Social entrepreneurs operate on the basis of their output providing a social benefit or social impact. Being incorporated as a Community Interest Company means definitively you are a social enterprise. Prior to this new model of incorporation, social enterprises could be classified as not for profit or voluntary organisations and community organisations.
Social enterprises are now being formed and positioned to fill the void as budgets for statutory services are being savagely reduced; as the impact austerity measures being to shape a new future for service delivery and design. The third sector have had to come to terms with a commissioning process that demands them to meet ever increasing demanding service level agreements.
One theory is that the concept of social enterprises were promoted as a way forward and answer to an impending funding crisis that would see local government infrastructure reduced in size to as it responded to the challenges of market forces that would only become more competitive as globalisation kicked in. The Third Sector Research Centre longitudinal study from 2008-2013 suggests that the thinking and support around the Social Enterprise Sector as part of the third sector is not very clear, coherent and needs addressing:-
from “Understanding the Third Sector” 2013
• Social enterprise means different things to different people across different contexts and at different points in time, and social enterprise is not confined to organisations describing themselves as social enterprises.
• Its contested nature leads to a wide variation in estimations of the number of social enterprises, and to confusion in policies focused on supporting social enterprises.
• Research on the mix of funding within social enterprises has revealed that the balance of profit and nonprofit sources may not be stable.
Understanding the Third Sector – Third Sector Research Centre 2013