BLOG: Building a Social Enterprise and Private Sector Alliance

In this month’s P4P blog, Duncan Thorp from Social Enterprise Scotland discusses the benefits of social enterprise and private sector partnerships, giving reasons for collaboration and examples of existing private-social partnerships

Social enterprise is at the forefront of a wider movement to build an inclusive economy. It sits comfortably alongside the real living wage, tax justice, fair trade, employee ownership, B Corps, the Scottish Business Pledge and other innovations.

Social enterprises are independent businesses that have a specific mission to tackle a social or environmental issue – and drive any profits back into their mission. According to the most recent statistics there are around 5,600 in Scotland with an economic contribution of around £2bn, ranging from community co-operatives to housing associations, enterprising charities and more.

The Scottish Government has set out a vision to develop ‘inclusive economic growth’. For them, this means an economy that combines increased prosperity with equality and greater distribution of economic opportunities. This is a perfect fit with the purpose of social enterprise.

Social enterprise and private sector partnerships play a key part in building this new, inclusive economy, where everyone benefits. But why should private sector businesses engage with social enterprises? There are a variety of reasons.

Firstly social failure is bad for business. Unemployment, homelessness, drug addiction and other issues negatively impact on businesses. People without work and opportunity don’t have money to spend on goods and services. Social enterprises work at the frontline to solve these social problems.

Private sector businesses should also engage with social enterprises because they bring real benefit in terms of opening up new markets and new business opportunities. Joint bids for public contracts and similar partnership working are options too.

Businesses can contract social enterprises into their supply chains. This could be a catering contract, graphic design, meeting space hire or something else. It’s also about private sector employees volunteering in social enterprises, in a skills exchange, for learning and personal development.

Whether a business is trading for a specific social purpose or making efforts to avoid negative social impacts, access to information and demand from consumers is increasingly important. This is certainly an emerging area to achieve social enterprise growth.

Social Enterprise Scotland recently published a booklet highlighting a range of existing case studies of this private-social innovation. The brochure centred around three key areas of partnership work, namely consumer demand, supply chains and contracting and procurement.

  • Brewgooder were the first social enterprise to receive a national listing with ASDA, with a mission to provide clean water and life to people in Malawi through the power of craft beer. This has enabled them to grow and increase their impact. The partnership with private sector businesses started at the beginning of their journey, as almost 1000 backers and 30 restaurants got on board to support them. Brewgooder also now works with the Coop and Tesco.
  • Hey Girls is already leading the way in innovation and discussions regarding period poverty. They worked on getting their sanitary products in Waitrose stores and elsewhere. To date Hey Girls has distributed 2.3 million products through its Buy One Give One model.
  • Similarly the Shetland Soap Company has been a key supplier to Northlink Ferries for the past 10 years, where in addition to supplying hygiene products and sandwiches through its catering business, Shetland Kitchen, their merchandise is available for customers in the on-board shop. Shetland Soap Company works alongside adults with learning disabilities.

Developing partnerships as part of the bidding process for the private sector and social enterprise can be a daunting experience both for large scale contractors and smaller organisations. It was against this background that P4P (Partnership for Procurement) itself was established.

Through P4P, Morrison Construction was introduced to local charities Edinburgh Community Food and Community Focus Scotland CIC. Both social enterprises successfully qualified to become part of Morrison Construction’s trusted supply chain, earning work with the company. Both social enterprises invest money earned by their businesses back into community development initiatives.

Certainly poor practices and behaviours exist in some parts of the private sector but we do need to recognise the good that can happen through philanthropy, Corporate Social Responsibility (CSR), employee volunteering and charity fundraising. Developing these traditional activities into more dynamic and innovative work should be a key objective for any enterprise.

Specifically more strong, mutually beneficial relationships must be built between social enterprises and private sector businesses. In this way we can exchange skills and knowledge, positively influence traditional business culture and build the kind of inclusive economy that will benefit everyone.

Beyond this private sector businesses might actually consider becoming social enterprises themselves. This is something that would have a truly transformative impact on society.

Forging a different approach, one that invests primarily in the community, is entirely possible. After business owners have put a roof over their heads and provided enough for themselves and their families, becoming a social business of some kind may be a logical next step. Social enterprise is a natural fit for many ethical or family businesses too.

This is relatively easy for an SME but why not include big corporations too? Even just having the conversation is a start. The idea that Twitter should become a democratic co-operative, owned by its users, was seriously debated not so long ago by the company’s campaigning shareholders.

We believe that social enterprise, in all its forms, remains the best model to delivery genuine wealth creation, a sustainable economy and a more equal society. The most democratic and locally accountable ones are the gold standard in many ways.

But it’s essential that we work in close partnership with private sector friends who share the same values. We need to move away from the old way of doing business and focus on building local, inclusive economies. What counts is positive outcomes for people and planet. Alongside our allies in the private sector social enterprises can lead the way.