Social enterprises more likely to survive than other businesses, says report

New Philanthropy Capital says their ability to draw on commercial income and grant funding helps them to grow during difficult financial times

Eibhlín Ní Ógaín, the author of the report
Eibhlín Ní Ógaín, the author of the report

Social enterprises have a better survival rate that normal businesses and are more likely to grow during the recession, according to a report from a researcher at the think tank New Philanthropy Capital.

The report, Are Social Enterprises More Resilient in Times of Limited Resources?, was based on research among 153 social enterprises carried out in 2010 as part of an evaluation of the School for Social Entrepreneurs.

It found that social enterprises experienced 17 per cent annual growth on average, compared with 6 per cent for a normal small business, and that 66 per cent of new social enterprises were still going five years after they started, compared with 47 per cent of normal companies.

"This shows that social enterprises are extremely resilient," said Eibhlín Ní Ógaín, the author of the report. "It seems to be based on the fact that social enterprises can draw on such a diverse source of funding.

"In addition to commercial income, they can draw on grant funding and volunteer staff."

Of the social enterprises surveyed, 64 per cent had income from commercial activities, while 50 per cent had received grant funding from trusts or a foundations. Twenty-seven per cent earned money from public sector contracts, while 36 per cent had received public sector grants.

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