Social Enterprise Census

The Social Enterprise Scotland Census, conducted by Social Value Lab with CEIS, has now been published; you may have had time to read the whole thing or you might just have skimmed the overview.  It is hugely useful data, and it now needs to be thought about and analysed over the coming months - what does it mean for Social Enterprise in Scotland moving forward? And how do we use this information to effect even greater change?

This fantastic infographic from the census highlights the benefit of social enterprises to the economy and society in a clear data format. Sometimes those in the sector are so busy with the day-to-day tasks it is easy to forget just how important they are to the Scottish economy and our society.  

It is interesting to consider what the significance of these numbers are: for example, of the 6,047 social enterprises currently operating, most are relatively small and serve their own communities.  What support do they need now to remain sustainable or to grow at the right pace? Of the 89,970 people in employment within social enterprise, the priority now is maybe to make those jobs as secure as possible and promote fair work in the sector. Rural communities have seen an increasing number of social enterprises again over the past 4 years (1% per annum) – what can we learn that is transferrable to other communities? Although 683 new social enterprises have emerged, 661 were dissolved/deregistered in the same two-year period.  As support agencies, how can we better support social enterprises early enough when they are facing challenging times? We believe that the best way to achieve this is through collaborative work across all agencies to provide the best support possible at the right times for organisations.  

The pandemic has shown that the sector is able to weather the bad times, and that one of the key advantages an organisation can give itself for long-term sustainability is healthy financial reserves. Although the Scottish Government and independent funders made over £219 million in additional funding available and provided flexibility in grant terms, it was the organisations with their own reserves who were able to use the additional funding to help an even greater number of beneficiaries rather than just ‘keep the doors open’. The census shows that since 2019 the survival ratio (the number of weeks an organisation can draw on its reserves to continue operation) has increased from 12 to 45 weeks.

So, how do we support organisations to strengthen their financial reserves and to equip them with the skills needed to understand their financial projections and how to achieve them? Here at Community Enterprise we aim to do this through a combination of signposting to relevant training courses and tailored 1:1 support through programs like Accelerate and Just Enterprise.  

Many predicted the worst for revenue generation during the pandemic lockdowns and it certainly wasn’t an easy time but even with the pandemic, the consistent income from trading activity continued, the census shows it dropping slightly from 70% in 2019 to 69% in 2021.  During the pandemic, a strong narrative spread across the country about supporting local organisations over multi-nationals like Amazon because people had more time to educate themselves on the work of local enterprises and what it means to be a social enterprise. So how do we build on this to ensure this trend continues, awareness is raised about social enterprise and growth increases? Our team believes that a strong education on the benefits of marketing, branding and communication allows organisations to bring potential customers on the journey with them and creates a good connection between the organisation and their customers. 

The Census was first conducted in 2015, so we now have a strong data set to draw on when making predictions and ensure that a strong strategy for the sector is developed. The Scottish Government currently has the 10 year Social Enterprise Scotland Strategy which was developed in collaboration with the sector.  That runs until 2026, and these censuses are a great foundation on which to build the next strategy. Social enterprises contribute £2.83 billion to the Scottish economy and, although harder to quantify, their social impact is worth even more than that to the communities and people they work with. Scotland is recognised as a world leader in social enterprise, with social entrepreneurs proving that business can be conducted in a dynamic and socially impactful way, while also generating sustainable income. We are proud to be part of their journey at all stages, as well as being part of the conversations with policy makers to ensure the sector is supported at the right times and in the right way to allow it to flourish. The data gathered from the census is invaluable in this process. So, to return to our original questions: what does it mean for Social Enterprise in Scotland moving forward? And how do we use this information to effect even greater change? Moving forward, this data allows social enterprises to quantify their worth through statistical data; it can be used to guide policy makers; it can help funders look at areas where funding is needed and best practices for how to design funding pots. It can be used by support agencies, such as ours, to guide how we provide support and what areas of support are going to be most beneficial to our clients and beneficiaries.