How social enterprises bounce back

Barely a week goes without news of a high street business going into administration or a charity or closing its doors. But I can’t remember when last I heard about those organisations that are managing to survive the shocks meted out by the recession.

Perhaps it will be different over the next few days because we’re halfway through Global Entrepreneurship Week and today is Social Enterprise Day. If the study NPC carried out a few years ago with graduates of the School for Social Entrepreneurs is anything to go by, social enterprises* might offer lessons in resilience for others to learn from.

NPC’s study involved an online survey sent out to 550 alumni of the School for Social Entrepreneurs and in-depth case studies with six graduates. When we conducted a thematic analysis of the interviews and in-depth analysis of the survey results, we discovered that social enterprises might come with built in shock absorbers: compared to traditional businesses, social enterprises were (on average) more likely to survive and compared to charities, social enterprises were likely to be more sustainable.

We identified two main factors that bolster the resilience of these organisations. The first is the ability of social enterprises to draw in diversified funding: commercial income as well as grants and contracts. And the second is the ability of social enterprises to rely on volunteers as well as staff: with an average ratio of 1 staff to 10 volunteers recruited.

While we must be cautious about interpreting and applying these results, anyone looking to construct more resilient organisations in these unstable times might find it useful to take a closer look at social enterprises and the social entrepreneurs that run them.

• The term social enterprise describes an organisation that trades in order to achieve a social and/or environmental mission and whose surpluses are principally reinvested for that purpose in the business or community. If you’ve bought a copy of the Big Issue, shopped at Co-Op or followed Jamie Oliver’s Fifteen programme, then you already know what a social enterprise is.  (Find out more at Social Enterprise UK.)