Supporting people into work through innovate social enterprise models

It’s more important than ever that charities find new and innovative ways to fund their work. Shrinking public funding, high competition for grants and a falling number of individual givers over recent years has meant charities face extra financial pressure at a time when demand for their services shows no signs of slowing.

For this reason, when we set out on our journey to design and pilot a new service to support Refugees and Asylum Seekers into employment it was important that this service had the potential to be financially self-sustaining. In other words, the service would help people whilst generating the income it needed to help those people — a social enterprise.

What is social enterprise?

A social enterprise is a business that seeks to change the world for the better. Like all businesses, they aim to make a profit but it’s what they do with this profit that sets them apart — at least half is reinvested or donated to create positive social change. Profit is generated through trading, the sale of products or services to their customers.

Social enterprises come in many shapes and sizes from large national businesses like The Co-operative Group to well-known brands like Divine Chocolate and small community cafes.

Taking a social enterprise approach does not mean that a charity must change its legal structure. There is no legal barrier for charities carrying out trading activities if those activities are in line with their social mission.

How can social enterprise support people into employment?

There are many social enterprise models, but which can best support service users into employment?

1. Cross-Subsidisation

Profit from the sale of goods and services is used to fund social impact activities.

E.g. Bread and Roses

Social mission: This London based social enterprise runs floristry training programmes for women from refugee backgrounds. Not only do the women learn a new skill they improve their English language and build networks and friendships.

Business model: A flower delivery service. £10 from each bouquet sold on their online store goes towards funding the training sessions. Flowers are supplied by local partner florists; the refugees are not involved in creating the bouquets sold to customers.

2. Employment

Social enterprises that provide their beneficiaries with job opportunities and training through the production and sale of goods or service.

E.g. Breadwinners

Social mission: Provides training and employment for young people from Refugee and Asylum Seeker backgrounds. Service users gain skills and earn a wage whilst selling bread on market stalls across London.

Business model: Market stall as a service. Breadwinners manage and staff market stalls on behalf of artisan bakers who can’t run stalls themselves. Profit from the sale of bread goes to fund the charities operational costs and training activities.

3. Market Intermediary

Social Enterprises that support their service users by marketing or selling products and services made by them.

E.g. Refumade

Social mission: This Cypriot social enterprise runs a drop-in centre where refugees receive support and sewing training. They also enable their service users to earn an income by providing them with the platform to sell their homemade goods online.

Business Model: eCommerce platform marketing and selling handcrafts produced by service users. 80% of the income from sales goes to the maker and 20% to cover operational and training costs of the centre.

4. Recruitment Agency

Social enterprises that prepare people for work who would otherwise find it difficult to find work. They match candidates to job vacancies, working with employers directly to help fill their roles.

E.g. Transitions

Social mission: To increase the hiring success rates for Engineering, Architecture & Business Services candidates and employers from refugee backgrounds.

Business model: Agency fees. Employers pay a one-off fee when Transitions places a candidate in their business. Transitions enable employers to better meet their diversity and inclusion targets by tapping into the refugee professional talent pool.

5. Tiered Pricing

Profit from the sale of goods and services to high-income earners is used to subsidise the price of goods and services to those more in need. These goods and services have a positive impact on the lives of the buyer.

E.g. As social enterprise charges customers for a virtual coding course. Profit from these sales goes toward providing those from refugee backgrounds and lower incomes with half-price coding courses.