Once upon a time there were charities, businesses and public sector organisations. And then the world started to change. My predecessor, Mike Abbott, has talked and written about the blending of the sectors in the past. Charities are changing their business models to become “Social Enterprises”. Local authorities are spinning off operations to form Local Area Trading Companies or Social Enterprises.
I saw the blending of the sectors from a different direction last week. We went to see Eagle Radio, based in Guildford. Eagle is part of UKRD group, a privately owned for profit company. However, their focus is on a lot more than just profit. They do a large range of activities to support and enhance the local community, including their “Big Community” – helping voluntary organisations to find volunteers with the right skills. And by the way for the last four years UKRD have topped the Sunday Times best companies to work for. Can anyone doubt the motivating effect that true Corporate Social Responsibility can have on employees?
Eagle's approach reminded me of an event that I attended the previous week where the question arose “What is a Social Enterprise?” I didn’t ask Eagle Radio whether they would classify themselves as a Social Enterprise, probably not as they never said so. But the issue as to what is or isn’t a Social Enterprise seems to bother people a lot. One of the reasons that this debate arises is because contrary to popular belief a “Social Enterprise” is not a legal form of organisation, it is a just a label. Companies limited by guarantee, Community Interest Companies, Charitable Incorporated Organisation – these are all legal structures. So why does it matter? It matters for two reasons.
Firstly, communication. If two different people understand two different things by the same word or phrase, it often causes confusion. Secondly, it is important to have a legal structure that is fit for purpose for what you are trying to achieve with your organisation. Charities have more constraints on them than other forms. On the other hand, they also have advantages such as being able to access grants that businesses cannot.
If you are involved in any way in setting up an organisation or changing its structure then getting the legal structure right from the start is very important. If you don't have it, it is very important to get good legal advice. If you need professional help on this maybe you could try posting an advert on Eagle Radio’s Big Community.