Business leaders in the social enterprise sector are more likely to be setting the social agenda in Britain than charities and governments in years to come.
And the organisations that practise a social mission by providing a specialist social service while operating by normal business means are also at the forefront of economic wealth creation. That was the view of one of the country’s top social enterprise chief executives Graham Bell, speaking after he had been presented the UK Social Enterprise of the Year Award, in London. Graham Bell runs the Kibble Education and Care Centre, in Paisley, Scotland and he was presented with the New Statesman Upstarts Award by Nigel Griffiths MP, the minister with special responsibility for social enterprise.
Kibble educates and cares for more than 100 boys who are both troubled and troublesome. The youngsters are placed there by local authorities that pay a fee for the organisation’s services. Graham Bell said: “We are like any other business and have to sell our expertise and services to make the profits. Although unlike traditional businesses, our profits don’t go to investors or shareholders as ours is ploughed back into the organisation.”
“And like any successful business we have to continually evolve and innovate to keep at the forefront of what we are doing.”
“It’s the same for all social enterprises – they have to keep ahead of the game because the alternative is not having anyone buying their services.”
“Necessity being the mother of invention, this highlights how social enterprises can also be social innovators and, like any business need to keep innovating to maintain or expand market share.”
He added: “I believe market pressures mean social enterprises become more consistently effective social innovators than existing charities or local or national government agencies. “In this way the private commercial sector will become the country’s social innovators.”
Graham Bell continued: “The social enterprise structure has provided Kibble with the opportunity to be a social business incubator.
In essence, each year since 1996 two new small social businesses have developed, albeit under the Kibble umbrella.
“There are at least enough such projects in the pipeline to continue this for the next five years. If this is replicated across the country it’s easy to see how social enterprise can be become a powerhouse in the economy.”
Nigel Griffiths MP – the government minister with responsibilities for social enterprise - said: “By developing innovative solutions to the challenges faced by many communities across the nation social entrepreneurs are a powerful driving force behind the achievements of the social enterprise sector.
“Social enterprises are an integral and dynamic part of the economy, creating new goods, services and jobs as well as encouraging growth of entrepreneurship and empowerment in disadvantaged areas.
“I want to ensure we do all we can to encourage, grow and sustain this sector.”
In 1996 when the statutory grants system for these establishments was abolished, Kibble faced the choice of either closing or embracing the concept of the social enterprise economy and selling its expertise and services like a normal business.
Then, Kibble had a turnover of £1.4 and employed 60 staff. Last year turnover had risen to almost £8 million and 270 staff were employed. Fees account for 93 per cent of Kibble’s turnover.
In Scotland, the social enterprise sector is worth £2.2 billion to the economy and accounts for four per cent of the country’s gross domestic product.
Graham Bell describes operators in the social enterprise sector as ‘social capitalists’ and said: “We have shown you can combine a particular social mission of a charity with a new way of doing business where you don’t depend on grants. You deliver a quality service people are prepared to buy.”
“We have had to develop a range of services and get away from one-size-fits-all. Our work has become much more specialised. We have to provide a range of specific services for young people who are being placed in Kibble.”
“We are particularly proud of our staff achievements. They have had to adapt to a different way of working.”
“Staff have to be much more flexible in their ways of working. They need a lot more expertise and we have had to ramp up the training and development of our staff at Kibble.”
“We have one of the best qualified staff groups in the sector and they have gathered a lot of experience in all the areas of the sector.”
“I am proud that we can combine a social mission with best business practice. They are not mutually exclusive.”
Although most of Kibble’s income is from fees the grants from trusts are still important.
Graham Bell added: “We still need trusts for the cash to provide the investment in socially responsible activities “Trust money is important for research funding. Finding better ways of doing things and financing projects giving us innovative ways of approaching old problems.
“We tend to use trust money to kick-start a project, but our aim is for self-sustainability. We have been successful in getting grants from 20 of the major grant-making trusts in the UK.”