Finance: Social enterprise 'should be as familiar a concept as fairtrade'

The concept of social enterprise needs to become as familiar in consumers' minds as organic food or fair trade produce, according to the chief executive of Social Enterprise London.

Speaking on the eve of tomorrow's Department of Trade and Industry-sponsored Social Enterprise Day, Allison Ogden-Newton said that although brands such as the John Lewis Partnership and Jamie Oliver's Fifteen restaurant were well-known, many people did not know what social enterprise was.

"We want consumers to be aware that when they use a social enterprise service, such as taking a trip on Hackney's Community Enterprise bus, their pound is achieving more than just paying for the service or product," she said. "They are often not aware of how they can make choices in the way that people are when buying organic or fair trade products."

She said strategies to support social enterprise had often "left consumers out of the equation".

The first Social Enterprise Day has been designed to showcase successful social enterprises and encourage young people to get involved. Events include the launch of a campaign by Borough Market in London to increase awareness among schoolchildren of food production and nutrition. The day culminates with the 'Enterprising Solutions' award presentation.

According to DTI figures, there are about 15,000 social enterprises in the UK, employing 475,000 people and generating £18bn in annual turnover.

There are 5,000 social enterprises in London, 300 of which are members of Social Enterprise London.

The definition of social enterprise remains hazy. Some firms do not distribute any profit to investors, whereas others generate a return. There is a widespread consensus, however, that social enterprises are not about maximising shareholder value.

"Social enterprise is a bit of a tricky catch-all, but it's good to have somewhere to put things such as co-operatives, development trust associations, intermediate labour markets and the trading arms of charities," said Ogden-Newton. "They are businesses that produce a social return on investment, but to quantify that you'll have to take it on a case-by-case basis."

She said financial backing for the social enterprise sector needed to improve if it was to achieve its full potential.

"Some of our large social enterprises are still struggling to get sizeable loans so they can grow sufficiently to compete with their private sector counterparts," she said.

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