1 Creating Shared ProsperityDoes the variety of legal forms available to social enterprises help increase social impact? Creating Shared Prosperity @khbelizaire -

2 For hundreds of years, people have been developing organisations that put people and planet ahead of profit. A century ago, during a time of great civil and social challenges, a few entrepreneurs proudly created ventures with people at the heart of their business: organisations like Guinness & Cadburys, had a philanthropic method of “getting the best from their people” at a time when many workers “worked ‘til they dropped.” They built villages to create improved working and social conditions for their employees and the community as they strongly believed that if you look after your employees they will look after your business. John Lewis Partnership founded almost 100 years ago, has gone on to become what’s now become the largest employee-owned company in the UK. – Why am I telling you all of this? Well is would seem 100 years later, I feel that capitalism and traditional corporate business practise has very much lost it’s way…

3 According to the French Economist Thomas Piketty – (Capital in the Twenty-First Century 2013) wealth and income inequality is on the rise and is set to return to levels last seen in the 19th Century The book's central thesis is that when the rate of return on capital (r) is greater than the rate of economic growth (g) the result is concentration of wealth, and this unequal distribution of wealth causes social and economic instability

4 I think it’s party because of this growing disparity of inequality that has grown a movement for alternative approaches and different models to address the challenges we face in society today… The social enterprise movement believes there is another way of organizing society.  Businesses, we argue, are not necessarily about maximising personal wealth – they can be owned and operated by local communities – serving local economies - Local examples of key sectors – banking, health, Energy, Food

5 Brief History of Social Enterprise LawFriendly Societies Act 1793 Joint Stock Companies Act 1844 Limited Liability Act 1855 Building society Act 1874 Co-operative & Community Benefit Societies and Credit Unions Act 1965 Industrial & Provident Societies Act 1965 Companies Act Introduction of CICs Public Services (Social Value) Act 2012 In 1793 an Act was passed "for the encouragement and Relief of Friendly Societies,“ - A friendly society is a mutual association for the purposes of insurance, pensions, savings or cooperative banking. It is a mutual organization or benefit society composed of a body of people who join together for a common financial or social purpose. Before modern insurance, and the welfare state, friendly societies provided financial and social services to individuals, often according to their religious, political, or trade affiliations. Joint stock first time ordinary people could start a company without a royal order, or by private act of a parliamentarian

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7 Social Economy in WoE 10,500 jobs£0.38 billion turnover in West of England social economy 600 social enterprises 2,800 voluntary organisations 250 Community Interest Companies/co-operatives

8 Areas of SocEnt Impact in WoESocEnts are creating impact in almost every area of society. Worth noting in Social Enterprise's State of the Sector reported noted that socents said they were tackling 5 outcome areas on average...

9 Characteristics of Social Enterprises:(Primary) Social objective Limited profit distribution Participatory governance Source: EU Social Business Initiative As part of its Social Business Initiative,[22] which ran from 2011 until 2014, the European Commission developed the following definition based on three key criteria: social objective, limited profit distribution and participatory governance. Essentially business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.

10 Ownership gives people control over things that matter to themOwnership gives people control over things that matter to them. Without it, they have less of a stake in society and in the economy. The effect on business is detrimental, slowing down key determinants of economic success, like productivity, innovation and entrepreneurialism. This is echoed by the British public, who feel they have no control – in their workplaces, over big business, or over the economy as a whole.

11 The triple effect of shared ownership:Boosts productivity Harnesses innovation Drives entrepreneurship

12 Case-Study: Bristol Credit UnionLegal Structure: Credit Union & Cooperative Membership: 10,000+ members Shareholders: No shareholders, profit gets recycled into Credit Union to achieve impact Governance: As a co-operative BCU operates under a ‘Rule Book’ which is approved by members at a General Meeting. Once changes are approved by members then a new Rule Book is registered with the Financial Services Authority. A good example of shared ownership: In 2005/6 Social Enterprise Works with regeneration funding supported the development of Bristol Credit Union. Each year since 2005 Bristol Credit Union has seen remarkable growth, we now have over 10,000 members, over £5 million of savers' deposits and in our financial year 2013/2014, we helped over 4,789 people borrow £2,908,292 at affordable rates. Financial inclusion: Around 60% of BCU account holders would have had difficulty opening a high street bank account. For many of these customers the option of accessing a small loan reduces the use of loan sharks and pay day loans and the cycle of poverty. The Bristol Credit Union also work with the local authority to prevent homelessness by providing interest free loans for the deposit on private rented property. Credit Unions have 4 objectives hardwired to ensure they provide local financial services that have mutual community benefit: The objects of a credit union are— (a)the promotion of thrift among the members of the society by the accumulation of their savings; (b)the creation of sources of credit for the benefit of the members of the society at a fair and reasonable rate of interest; (c)the use and control of the members’ savings for their mutual benefit; and (d)the training and education of the members in the wise use of money and in the management of their financial affairs.

13 Case-study: Bath & West Community EnergyLegal Structure: Industrial and Provident Society (IPS)-Community Benefit Society (BenCom) Membership: 100+ (Based on shareholding open to anyone over the age of 16) Shareholders: Minimum shareholding £500, maximum £100,000 Governance: Board of 7 directors. One member one vote system regardless of number of shares. Focusing on solar, photovoltaic, hydro and wind technologies to create a financially sustainable and community owned energy enterprise. A community benefit society is run primarily for the benefit of the community at large, rather than just for members of the society. This means that it must have an overarching community purpose that reaches beyond its membership. Must also have a special reason for being a community benefit society rather than a company, such as wanting to have democratic decision-making built into its structure. Although a community benefit society has the power to pay interest on members’ share capital, it cannot distribute surpluses to members in the form of dividends. A community benefit society can opt to have a statutory asset lock, which has the same strength as the asset lock for a charity and for a community interest company. This type of asset lock is not currently available for co-operatives.  Legal Structure: Industrial and Provident Society (IPS)-Community Benefit Society (BenCom) Membership: 100+ (Based on shareholding open to anyone over the age of 16) Shareholders: Minimum shareholding £500, maximum £100,000 Governance: Board of 7 directors. One member one vote system regardless of number of shares. As well as 7% interest for investors and the environmental benefits of green energy BWCE have set up a separate charity that receives surplus profits from BWCE that are then allocated to community energy projects. Bath & West Community Energy was established in June 2010. Since then for Bath & West Community Energy and our partners we have: Raised nearly £13 million through 9 community share and bond offers offers, ranging from £350,000 to nearly £3 million for both BWCE projects and those of our community energy partners Installed 16MW of solar PV projects, 7MW of BWCE’s own projects and 8MW of projects owned by our community energy partners, sufficient to supply the equivalent annual electricity demand from over 5,000 homes Set up Mongoose Energy, a new development coop part owned by participating community energy enterprises, to take on and expand BWCE’s development work with other community energy groups

14 Case-study: Bristol Food NetworkLegal Structure: CIC limited by guarantee small membership Membership: 9 members Shareholders: No shareholders & any surplus to be reinvested for social benefit of company Governance: 9 members on Bristol Food Networks Board of Directors Supporting the growth of a movement - Coincidentally a high numberof Food Producers have set up as social enterprises. Supports, informs and connects individuals, community projects, organisations and businesses who share a vision to transform Bristol into a sustainable food city - To promote and encourage people to cook from scratch, grow their own and eat more fresh, seasonal, local, organically grown food. To champion the use of local, independent food shops and traders to help keep Bristol’s high street vibrant and diverse. To promote and encourage the use of good quality land in and around Bristol for food production. To promote and encourage the redistribution, recycling and composting of food waste. To advance education about the part that food, nutrition and lifestyle can play in meeting the needs of disadvantaged individuals, families and groups in the community and encourage social inclusion and social cohesion. To promote community-led food trade such as co-operatives, buying groups, Community Supported Agriculture and pop-up shops. To build the Bristol Food Network expertise in food and sustainability that allows access to and creates opportunities for local people within Bristol.

15 Case-study: Bristol Community HealthLegal Structure: CIC limited by shares schedule 2 large membership Membership: 1100+ Shareholders: 75% of staff are shareholders total number of shares 2015: 964 Governance: Employee shareholders are represented by an elected staff council who have the power to appoint non-executive directors. Board of directors are involved in day to day running of organisation. A defining feature of all social enterprises is that their idea of ownership is not based on investment for financial return, but on the idea of a group of people sharing a common bond or common aim – the pursuit of the social objective. A good example of this employee ownership is NHS spin-out, Bristol Community Health CIC – who runs over 35 healthcare services in Bristol and beyond. All services provided are funded by the NHS or other local authorities. Supported over 37,000 adult patients in the Bristol area – around one tenth of the adult population – through nearly 400,000 visits or appointments. Legal Structure: CIC limited by shares schedule 2 large membership Membership: 1100+ Shareholders: 75% of staff are shareholders total number of shares 2015: 964 Governance: Employee shareholders are represented by an elected staff council who have the power to appoint non-executive directors. Board of directors are involved in day to day running of organisation. Structure: CIC structure allows for easier access to funding due to ‘triple functionality’ (choice between adopting schedule 1,2 and 3) schedule 2 structure allows for share capital and enables dividends to be paid to asset locked bodies only. Arguably greater scope for attracting investment and funding than a company Limited by Guarantee where equity investment is unavailable enabling greater impact. No dividends on shares – Company is owned by staff but profits are reinvested in the Bristol Community Shared Innovation BCH are committed to adding social value to the communities of Bristol, both through the healthcare we provide, and through five future goals: To tackle health inequalities, To support the well-being of the community, To engage with and involve our community, To re-invest in our community, and, To contribute to environmental sustainability.

16 Act – ‘Consideration’ for social value in procurement – level for social change. Findings from Freedom of Information requests [1] sent to all local authorities in England show that more councils than ever are considering social value when commissioning services: 1 in 3 (33%) now routinely consider social value in their procurement and commissioning, and 1 in 4 (24%) have a social value policy. Bristol has adopted a dedicated social value policy – which we hope will level the playing field for social enterprise to enter supply chains, and help broker increasing collaboration between the social, public and private sectors.

17 Additionally one of the best ways for private sectors to collaborate with social enteprises to increase their impact is through buying social. Minister for Civil Society there launching SEUK’s Billion £ Corporate Challenge.

18 It’s interesting to see 100 years later, corporations coming back around to the understanding and importance purpose beyond profit.

19 Thanks for listening! Get in touch: @khbelizaire -