University of Salford Business School has pledged its support to social enterprises in the region, following its recent ‘combining purpose with profit’ event, which shone a light on the challenges those across the sector are facing in the current economic climate.
The School currently covers the concept of social enterprises within the first few weeks of students’ higher education journeys to ensure they’re well-versed on the breadth of businesses that currently operate in the UK marketplace, including businesses built on a foundation of social values and enterprise beyond the traditional corporate realm, from the outset. However, plans are currently being put in place to amplify this by further embedding the significant impact of social enterprises on society within the School’s curriculum to help nurture the region’s ethical business leaders of tomorrow.
All Salford Business School students also currently study business ethics and sustainability in their final year and engage with SMEs in the social enterprise space on industry collaboration projects and internships. Additionally, the School’s Launch@ Salford purpose-built incubator has supported several social enterprises to get their business off the ground.
The event, which took place in May, welcomed leaders, experts and impact investors from across the industry to discuss the action required to ensure some of the most important social enterprises in the region aren’t lost due to financial hardship.
According to Social Enterprise UK (SEUK), there are now more than 100,000 organisations operating in this space across Britain[i], each of whom are battling for their fair share of the limited funding available. In addition, a recent report from the organisation also indicated 18,000 social enterprises are at risk of closure, due to the tough economic climate[ii].
From cash flow challenges, budgets being cut, interest rates being the highest they’ve been in almost 15 years and high inflation resulting in times of economic uncertainty, many social enterprises feel they have been forced to focus more on commercials and less on their socially-driven foundations. However, according to those in the sector, namely those participating in the panel, there is a balance and social entrepreneurs shouldn’t see focusing on driving revenue as a negative, as it’s this that enables them to fund their cause.
The panel event ignited the conversation on the action that’s needed to ensure social enterprises have the support required to thrive amidst the current challenging landscape. Key takeaways and actions included:
- Helping social enterprises to diversify their offering to drive growth and profitability
- Making your social value your USP to not only drive revenue but also to attract and retain talent
- Ensuring social enterprises are set up to quickly pivot and remaining agile should a crisis hit
- Educating the next generation on ethical business practices and preparing students for careers in the social enterprise space
- Supporting anchor organisations to pledge a percentage of their procurement budget to social enterprises
- Helping social enterprises to better utilise research to bridge the gap between industry and academics
Further highlights from the event and guidance from the experts in the space, included:
Diversifying into new revenue streams
Nile Henry, Founder and CEO, The Blair Project, commented: “It’s essential for social enterprises to adapt during times of crisis. Grant funding is drying up, we’re in the midst of a cost of living crisis and then there’s inflation, so it could be an opportunity to diversify your offering.
“To ensure we survived during the pandemic for instance, we moved into adult skills training, teaching them new and emerging skills. This also enabled us to apply for tenders through the Department for Work and Pensions and we landed our first contract delivering this type of training, which has since led to us applying for similar government contracts and really enabled us to become more commercial when it comes to delivering our social mission. It’s not bad to be commercially driven as a social enterprise – you have to be in the current economic climate.”
Dr Marilyn Comrie OBE, Principal Founder, Black United Representation Network, continued: “We should really be encouraging large organisations and corporates in Greater Manchester to become social businesses, so they have greater awareness of the impact they could have. We could become the first city region that has only social businesses which is such an exciting prospect.
“Beyond this, I would really like to see anchor organisations pledging to spend a percentage of their procurement budget with social enterprises. This will be a gamechanger for the sector and will really enable us to continue doing the work we’re doing. We’ve seen it happen in Chicago and it would be great to see similar success on this same front here in the north west of England.”
One ongoing project the University is collaborating on is ‘Economies for Healthier Lives in Salford,’ a programme centred on local economic development strategies to improve health and reduce health inequalities, in partnership with Salford City Council. The project is focused on creating a fairer and more inclusive local economy that delivers greater social and environmental justice, where wealth is shared more widely across all communities. One strategy to help achieve this, led by Salford-based social enterprise, Unlimited Potential, is using procurement data and future trends from large anchor organisations in the city. The objective is to inform the strategic creation of new Salford social enterprises to take on contracts that will help retain more investment in the local economy.
Driving capital to support the cause
Stuart Vaughan, Third Sector Development Business Advisor, The Growth Company, said: “Within social enterprises a lot of focus goes into the social and it’s sometimes at the neglect of the enterprise element of the business. It’s important to remember you are a business and there’s a real need to be trading, and to be making some form of independent income outside of grants. However, some social entrepreneurs see driving profit as bad, but it’s essential you generate a surplus so you can continue doing the good work you actually want to do and really achieve the mission you set out to accomplish.”
Ed Siegel, Chief Executive, Charity Bank, added: “As a social investor, I frequently reaffirm the fact that people shouldn’t see commerciality as a bad word. We know social enterprises aren’t designed to make as much money as possible, but they do need to be commercial. Even with grant revenue, it’s important to be very business led. In addition, make your social value creation your USP. This in itself has real commercial value and sets you apart.”
Elaborating on this and delving into using your social mission to attract talent, moderator, Claire-Marie Boggiano, Director and Coach, Lurig Leadership and Change, continued: “There’s a real war for talent at the minute and so many people are now purpose-driven. Many want to work for an organisation that’s making the world a better place and as much as your social value is a great sales tool, it’s also a great tool to attract and retain talent – which is essential in the current climate.”
Remaining agile during times of crisis
Cat Chrimes, Head of Investments, GMCVO (Greater Manchester Centre for Voluntary Organisation), commented: “If I think about the people we’ve invested in across the region in recent years, the ones that are really thriving are those who pivoted their way through the pandemic and continue to pivot their way through the cost of living crisis. They’ve also got boards that really support them and will allow them to make changes rapidly. They’ve got those real commercial frameworks front of mind still and focus on that business mindset, as well as their social missions.
“Beyond this, through effective collaboration, I think we can really create a thriving social economy in Greater Manchester where every organisation is a social enterprise. I firmly believe we can make this happen, which is really exciting.”
Dr Kitty Rostron, Lecturer in People and Organisations, Salford Business School, continued: “When thinking through how to organise your board, think about where your blind spots are. Instead of bringing on likeminded people, perhaps reflect on the fact that you need somebody with a lot of commercial experience and skills to provide that direction, as well as individuals who are not afraid to challenge you.”
For further information and regular updates from Salford Business School on its continued support for social enterprises, visit: www.salford.ac.uk/news.