With Trustees' Week upon us and the 2012 Olympics around the corner, many people in the UK are turning their attention to volunteering and looking at ways in which they can contribute to society. The coalition government's "big society" agenda is intending to reinvigorate Britain's philanthropic spirit by encouraging people to take a more active role in their communities, and has a vision of charities and social enterprises delivering a greater number of future public services and being more self-sufficient.
But becoming a trustee is not the only option available; the fast-growing social enterprise space, in which businesses and charities trade for social and environmental purposes, holds plenty of opportunities and might appeal more to some people – perhaps those with a purely commercial background. While we estimate that one in five charities currently has a vacancy on their boards for a trustee, there are equally a great many social enterprises and charity trading subsidiaries crying out for experienced individuals who can bring specialist skills and commercial experience to their boards as non-executive directors.
Currently 62,000 social enterprises exist in the UK, although, contrary to popular belief, many are charities and their wholly owned trading companies. Overall they contribute £24bn to the economy and employ around 800,000 people, and although this year there has been much excitement and debate about social enterprises and the "rise of the social entrepreneurs", there is nothing new about them. The first example of a social enterprise company can be traced back to 1840, when a Rochdale workers co-operative was set up to provide high-quality and affordable food for workers in response to poor factory conditions. And we only have to look at the success of charities such as The Big Issue, The Eden Project, The Sunlight Development Trust – a trading subsidiary of the Sunlight Centre Charity – or the many charities with retail arms such as Oxfam, Sue Ryder and RNIB, to recognise that, while this is a growing area, it is well-established and has its genesis in the charity sector.
However, the government has thrust this sector – neatly defined recently by Lawrence Simanowitz, a partner at law firm Bates Wells and Braithwaite, which specialises in this sector, as "the fourth way" – into the limelight this year.
One of the government's big society missions is to make it easier for charities and social enterprises to compete with the private and public sectors to deliver public services in the future. It has made funding and support available for people starting social enterprises, and the upcoming public services bill – the private members' bill led by Chris White – suggests that commissioners will prioritise funding for organisations that offer genuine social change.
It is also a confident sector. According to The state of social enterprises survey undertaken in November 2009, 48% of social enterprise companies were confident of future growth compared with just 24% of small and medium enterprises (SMEs) in spite of the economic downturn. And, social enterprises also outperformed many SME companies during this period. An impressive 56% of social enterprises had increased their turnover from the previous year, compared to 28% of SMEs.
So what opportunities exist for people to get involved with social enterprises and charity trading companies? Well, there are many. Social enterprises operate in almost every industry in the UK, from health and social care to renewable energy, retail through to sport, education and housing.
But one important consideration for anyone thinking of joining the board of a social enterprise or a charity trading company is that they are businesses first and foremost – they need to make a profit in order to compete in the market, to ensure their survival and to invest in their social or environmental aims. So, like any good business, they will want to attract people with a diverse mix of skills and experience to their boards; people who can inject ideas, passion, creativity and who have the business knowledge and capabilities to help shape their future direction and ensure growth.
Trustees of charities are there to act in the best interests of their beneficiaries, while directors of a social enterprise are there to act primarily in the interests of the shareholders. However, a director of a social enterprise will still be responsible for governance. They will still have to ensure that the social enterprise is financially solvent and meeting its financial goals as well as fulfilling its social mission. But, arguably, there may be fewer responsibilities and liabilities involved in joining a social enterprise or a charity trading company compared with trusteeship. Being a charity trustee has some other, obvious benefits and is often a stimulating, rewarding and interesting role – but it may not meet everyone's needs.
In some cases, unlike trusteeship, people will be paid for their efforts in social enterprises. Those who work for Community Interest Companies or CICs – a new form of company created by legislation, but initially designed by Bates Wells and Braithwaite specifically for social enterprises – can receive salaries, however people shouldn't expect large salaries and, if they do, they are joining for the wrong reasons.
And, while the personal liabilities might be fewer, joining the board of a social enterprise is just as much of a commitment as becoming a trustee. Just as you wouldn't join a board of a business on a temporary basis, a social enterprise should be treated in exactly the same way if you want to make an impact on the business.
In recent months, Trustees Unlimited has received a greater number of briefs from social enterprises, so we know there is demand out there for great people and exciting opportunities available. In fact, with increasing pressure on charities to trade their way to sustainability, many companies owned by charities are also looking for independent non-executive directors to complement the trustees who also sit on the board. So for people considering their options this Trustees' Week, it is important to remember there is a "fourth way".
Richard Williams is director of enterprise and development at the National Council for Voluntary Organisations (NCVO) and director of Trustees Unlimited
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