Four issues key to social enterprise survival

Social enterprises face a unique and complex series of issues. To ensure the long-term health and survival of your social enterprise, an understanding of these issues is vital. In this article, I will summarise four key areas you need to consider: sources of funding, governance considerations, the power of people, and sustainable growth.

Funding

There are a variety of funding options available to social enterprises, but it’s important to recognize that there’s no one-size-fits-all approach. Different funding sources, such as grants or debt financing, may be better suited to different types of organizations depending on their legal structure and trading history. It’s important to find the right fit in terms of funders, culture alignment, and story engagement. Additionally, it’s important to have a clear plan for how the funds will be used to further your social impact.

Governance

Good governance is critical to the success of a social enterprise. It involves setting up clear roles and responsibilities, processes for managing conflicts of interest, and engagement with stakeholders. Good governance provides transparency and fosters internal dialogue, allowing organizations to focus on their outward impact. It also promotes fundraising opportunities and increases supporter and staff engagement.

People

As social enterprises grow, it’s important to bring on additional people to continue their success. Founders can’t and shouldn’t do everything, so it’s important to think carefully about who to bring on and in what capacity. There are a variety of options, such as staff, volunteers, consultants, or non-executives. It’s important to consider the expertise required, availability of outsourced services, and existing connections in your network.

Growth

Successful growth for social enterprises is underpinned by clear social aims and impact measurement. Theory of Change provides a flexible methodology for organizations to describe what they aim to achieve and how they plan to achieve it. Social enterprises need to take a holistic approach to their reporting, honestly reviewing what went well and what can be improved going forward. External reporting of impact is recommended to build credibility and momentum for your business. From a practical perspective, it’s also important to think through intellectual property, particularly branding and marketing materials, and how they can be protected and exploited. Greater exposure in the marketplace should be matched with an appropriate IP policy, such as trademarking and licensing.

In conclusion, social enterprise survival faces unique challenges that require careful consideration and planning. By focusing on funding, governance, people, and growth, social enterprises can increase their chances of long-term success and social impact. It’s important to find the right fit in terms of funders, establish good governance systems, bring on the right people at the right time, and measure and report impact while protecting intellectual property. With a holistic approach and a clear understanding of these key areas, social enterprises can thrive and continue to make a positive impact on society.

About the Author

Emma Millar has over 10 years of experience in working with innovative organisations across the sector from social start-ups to large national and international charities. She is especially interested in developing purpose-led legal structures for social ventures and helping to manage the complex implications of such models for internal governance and funding relationships. Find out more about Emma and her work here.

23 May – Running your Social Enterprise: funding, governance, people, and growth

Join Emma Millar from Taylor Vinters to find out more about issues that are important to your survival as a social enterprise, such as sources of funding, building a team and governance considerations, allowing for sustainable scaling.