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2021 | OriginalPaper | Buchkapitel

10. The Debt Burden of Social Enterprises: How Choices Around Legal Form and Purpose Can Impact the Funding Options for Social Entrepreneurs

verfasst von : Sally-Anne Hunter

Erschienen in: Ethical Discourse in Finance

Verlag: Springer International Publishing

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Abstract

In this chapter, the status of social entrepreneurship and social enterprise are considered with a particular focus on the UK ecosystem. In looking at both regulatory and structural issues, the author is able to bring her wealth of knowledge as a practitioner in, and consultant to, the Third Sector to pose crucial questions about the ways in which social enterprises are funded. This chapter also addresses the impact of the stage of an organisation on its funding options, the issue of the disparate ways that female-led businesses are treated by funders in all sectors and how COVID-19 is presenting challenges and opportunities for socially driven entrepreneurs. Recommendations are offered to entrepreneurs who are looking to form a social enterprise, and funders looking to support their endeavours.

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Fußnoten
1
An asset lock is a mechanism aimed at protecting the assets of an organisation for its community or public purpose rather than for any private or personal gain of the members of the organisation, during the lifetime of and at the winding up of the organisation.
 
2
Incorporated organisations have their own legal identity, separate from the directors and as such provide the directors with a level of protection and limited liability.
 
3
For other forms see BIS (2011b) Legal Forms For Business: a Guide (BIS/11/1399) and (2011a) A Guide To Legal Forms For Social Enterprises (BIS/11/1400).
 
4
A good way to find out what legal form and business structure a UK-incorporated business has is to look it up on Companies House (https://​www.​gov.​uk/​government/​organisations/​companies-house).
 
5
As ranked by U.S. News and World Report. See Radicioni (2019).
 
6
The model usually used here is that the shares in the incorporated trading company are wholly owned by the charitable organisation.
 
7
The collaborative project to provide access to information on social investment Good Finance. It is jointly funded by Access—The Foundation for Social Investment, Big Society Capital and DCMS.
 
8
These “patient terms” are the main selling point, i.e. the lenders will allow more payment holidays and are less likely to call the loan if payments are missed than high street lenders as they are as concerned with the social return as they are with the financial return.
 
9
The decoupling of return to lenders (who charged interest rates) and organisational performance was highlighted in a research seminar “What is Ethical Finance?” delivered by Dr. Marizah Minhat and hosted by the International Centre for Management and Governance Research (ICMGR) on 14 November 2018.
 
10
According to the Third Sector Research Centre, Birmingham University, UK: The Third Sector is a term which refers to a universe of organisations operating outside the formal state or public sphere that are not trading commercially for profit in the market. Such organisations include charities and voluntary organisations, community groups, social enterprises, cooperatives and mutuals. These share a number of characteristics, principally their independence, public purpose, voluntarism in their governance and activities.
 
11
For example, Muslim entrepreneurs are prohibited from paying interest (Minhat & Dzolkarnaini, 2019).
 
12
In an article in the Scotsman in Jan 2021 entitled “The Big Interview: Jill Arnold, head of SIS Ventures”.
 
15
See, for an overview, her Ted Talk, The Real Reason Female Entrepreneurs Get Less Funding (https://​www.​ted.​com/​talks/​dana_​kanze_​the_​real_​reason_​female_​entrepreneurs_​get_​less_​funding).
 
16
Charity reserves policies: demonstrating and building resilience (2018).
 
Literatur
Zurück zum Zitat Borzaga, C., Galera, G., Franchini, B., Chiomento, S., Nogales, R., & Carini, C. (2020). Social enterprises and their ecosystems in Europe. Publications Office of the European Union. Borzaga, C., Galera, G., Franchini, B., Chiomento, S., Nogales, R., & Carini, C. (2020). Social enterprises and their ecosystems in Europe. Publications Office of the European Union.
Zurück zum Zitat B&P Glasser. (2019). Annual trustees report. London: B&P Glasser. B&P Glasser. (2019). Annual trustees report. London: B&P Glasser.
Zurück zum Zitat Business and Sustainable Development Commission (BSDC). (2017). Better business better world. London: Business and Sustainable Development Commission. Business and Sustainable Development Commission (BSDC). (2017). Better business better world. London: Business and Sustainable Development Commission.
Zurück zum Zitat Department of Culture, Media and Sport (UK). (2017). Social enterprise: Market trends. London: DCMS. Department of Culture, Media and Sport (UK). (2017). Social enterprise: Market trends. London: DCMS.
Zurück zum Zitat Lyon, F., Stumbitz, B., & Vickers, I. (2019). Social enterprises and their ecosystems in Europe. Country report: United Kingdom. Luxembourg: Publications Office of the European Union. Lyon, F., Stumbitz, B., & Vickers, I. (2019). Social enterprises and their ecosystems in Europe. Country report: United Kingdom. Luxembourg: Publications Office of the European Union.
Zurück zum Zitat Minhat, M., & Dzolkarnaini, N. (2019). Islamic finance (Chapter 14). In E. F. Brigham, M. C. Ehrhardt, & R. Fox, Financial management: Theory and practice (EMEA Adaptation). Cengage Learning. Minhat, M., & Dzolkarnaini, N. (2019). Islamic finance (Chapter 14). In E. F. Brigham, M. C. Ehrhardt, & R. Fox, Financial management: Theory and practice (EMEA Adaptation). Cengage Learning.
Zurück zum Zitat Rose, A. (2019). The Alison Rose Review of female entrepreneurship. London: Her Majesty’s Treasury. Rose, A. (2019). The Alison Rose Review of female entrepreneurship. London: Her Majesty’s Treasury.
Zurück zum Zitat Social Enterprise UK. (2017). The future of business: State of social enterprise survey 2017. Social Enterprise UK. Social Enterprise UK. (2017). The future of business: State of social enterprise survey 2017. Social Enterprise UK.
Metadaten
Titel
The Debt Burden of Social Enterprises: How Choices Around Legal Form and Purpose Can Impact the Funding Options for Social Entrepreneurs
verfasst von
Sally-Anne Hunter
Copyright-Jahr
2021
DOI
https://doi.org/10.1007/978-3-030-81596-7_10