Social enterprises find it hard to get low-cost governance advice

By Emilie Filou, Third Sector, 12 December 2007

Low-cost specialist governance advisers for social enterprise are almost impossible to find, and standards of support vary hugely across the UK, a report launched today concludes.

For Love and Money: Governance and Social Enterprise is the first report to look in detail at governance provisions for this part of the third sector.

The report, which was commissioned by the Governance Hub and the Social Enterprise Coalition and was conducted by the Open University, says social enterprises face a number of challenges, from choosing the appropriate legal form to balancing charitable and business goals. Support to deal with those difficulties is patchy, the report says.

"I think this is an excellent piece of research, and one that was desperately needed," said Anne Moynihan, the head of the Governance Hub.

"Social enterprise is very complex and there is a lot of blurring at the edges about what it comprises. It has also grown hugely, so this report is very timely."

The report concludes that social enterprises feel there is a gap between the theoretical information available on websites and leaflets and the expertise needed to implement it. Small organisations, particularly, say they cannot afford expert advice.

Feedback also suggests certain resources, such as materials provided by the Governance Hub, are really designed for charities and fail to address issues that are specifically faced by social enterprises.

Moynihan said the hub and its national support service successor were committed to implementing the report's recommendations, such as tailored advice reflecting the diversity of the sector and better support for recurrent problems.

George Leahy, director of research and policy at the Social Enterprise Coalition, said the coalition welcomed the findings. "It is clear that the Government needs to invest in tailored support and advice to social enterprises," he said. "Good governance is essential for social enterprises as their businesses grow."

Common problems

• Choosing a legal form that is most appropriate
  
  
• Sustaining active membership, which becomes more difficult with size
  
  
• Finding board members who possess the right skills
  
  
• Finding the right balance between social and business goals
  
  
• Relying too heavily on a single funder
  
  
• Social enterprises spinning-off from charities often experience a "culture shock".

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