Third Sector - Charities, Voluntary Orgs and Social Enterprises

[Third Sector Lab]

Bit of a straw poll...

Perhaps you volunteer, you're directly employed by a charity, you run a social enterprise or a substantial chunk of your clients are from the third sector.

Who on UKBF is involved in the third sector in some way?

 

[Officebird]

I am! I have an involvement with a Community Interest Company which does a lot of work for the Third Sector. As part of my work with them I am project managing the start up of a Social Enterprise in County Durham at the moment. I used to work for a community partnership and was a Community Transport Co-Ordinator there by the time I left. Since leaveing and setting up on my own I have done a few jobs for some of my old contacts in that sector.

More and more companies now are including social aims in thier business planning and it can only be a good thing. I would like to think that everyone could, in some way, contribute to the Third Sector.

Be interested to find out who else is involved, I suspect there will be more than you were thinking there would be.

 

[Third Sector Lab]

Hi Sara

Sounds like you've been involved in the Third Sector at lots of levels, I'd love to hear more about your work with this new social enterprise.

I currently work with a strategic partnership of three charities and I sit on the Fair Share Scotland Panel.

I'm looking to start a Third Sector Forum, there seems to be a real lack of online information sharing resources for charities and social enterprises.

 

[frockery]

I currently chair a national Scottish charity and have been a trustee of two other charities in the past.

I also have a new social enterprise project in the pipeline for which I am awaiting the outcome of a funding application.

Alison

 

[DanMartin]

I'm a big fan of social enterprise and blog about the sector here. I've also volunteered at Crisis' Open Christmas initiative for the past six years.

I'm intrigued to know how the social entrepreneurs on UKBF feel about being classed as part of the 'third sector'? I've heard from lots of people who say it's patronising and implies businesses of lower value.

By the way, if you haven't already spotted it, the UK's social enterprise ambassadors are contributing to an exclusive blog over on BusinessZone.co.uk. The latest from Craig Dearden-Phillips is a particularly interesting and candid account of what it takes to a social entrepreneur.

 

[Officebird]

I'm intrigued to know how the social entrepreneurs on UKBF feel about being classed as part of the 'third sector'? I've heard from lots of people who say it's patronising and implies businesses of lower value.

You are right it does seem to convey that message to many people. I'm not sure there needs to be a name for the sector at all. Social Enterprises are businesses just like any other and operate in all sectors across the board. The difference is in the added value and the ethos. The term Third Sector seems to conjure up images of half hearted businesses that are just there to save the world, or non-profit organisations, or businesses run solely by volunteers, or part time from someone's living room. This is annoying!!

One of the most famous Social Enterprises is Jamie Oliver's Fifteen Restaurant. Actually, it's a social franchise now. When people say third sector do you think of high class London restaurants???

I would like to see all firms of a certain size required to submit social accounts alongside the financial ones. This would force larger companies to take a long hard look at the real worth of their company to society and may make them want to include a social agenda of some kind in their business models.

 

[DanMartin]

The term Third Sector seems to conjure up images of half hearted businesses that are just there to save the world, or non-profit organisations, or businesses run solely by volunteers, or part time from someone's living room. This is annoying!!

I completely agree. There are huge mis-conceptions around about exactly what social enterprises are and how they differ to charities. Too many people also lump them in with CSR activities which, while welcome, cannot be classed as a social enterprise. Everything a social enterprise does is driven by its social or environmental aims.

Like you say there are some hugely successful social enterprises in the UK. As well as Fifteen, there's Cafe Direct and Big Issue which certainly aren't small, part-time operations!

I'm looking to start a Third Sector Forum, there seems to be a real lack of online information sharing resources for charities and social enterprises.

I agree that there are limited resources aimed at the the sector compared to those that are available for traditional businesses. Saying that though, I would heartily recommend UnLtdWorld.com, the recently launched social network for social entrepreneurs.

 

[Alison Jones]

I am a member of a social group. I volunteered to be the finance officer. Not many members want to volunteer for this. Inland Revenue don't help much, they won't listen to the fact that we are a non profit making organisation and our income is only £3000 and our expenses that or more but exist that we still complete corporation tax returns, which is stupid considering I have told them that as our income is only £3000 and expenses that or more that we cannot afford an accountant to complete our accounts and corporation tax form (which is always going to be a nil return but still volunteers have to make sense of that stupid long winded question form, so members volunteer to do this but it is getting harder to find volunteers because of Inland Revenue making it hard. Has anyone any ideas how to make Inland Revenue see sense.

Alison

 

[Third Sector Lab]

There's an increasing number of external factors placing pressure upon the work of charities, which makes the need for an information sharing network even greater.

I agree that the term 'third sector' is often as vague as the term 'social enterprise' but it should not be taken to mean third rate.

Hopefully a third sector forum will firm up these definitions and make the sector stronger.

Interesting blog by the way, duly added to my Google Reader!

 

[DanMartin]

I agree that the term 'third sector' is often as vague as the term 'social enterprise' but it should not be taken to mean third rate.

Let's hope social enterprises are simply seen as businesses in the future which is at the end of the day what they are!

Attempts have been made to define exactly what social enterprises are and I certainly agree there needs to be clarity, not least to attract investors. Venturesome, the social investment fund of the Charities Aid Foundation, recently made an attempt. I agree with most of what it said but not all, particularly the inclusion of CSR activities which aren't social enterprises. I'd be interested to hear other people's views.

 

[Third Sector Lab]

Going to pick your brain here Dan...apart from UnLtd, what social enterprise funding streams do you know of?

 

[DanMartin]

Going to pick your brain here Dan...apart from UnLtd, what social enterprise funding streams do you know of?

No problem, I'm happy to help. Venturesome, which I mentioned earlier, is another source as is Big Issue Invest. I've also recently discovered Finance Hub which provides advice on funding for charities and social enterprises and don't forget the Social Enterprise Coalition which should be able to point you in the right direction.

 

[Third Sector Lab]

Thanks for that Dan, Finance Hub is a particularly interesting site.

 

[JonM]

I'm a self-emplyed fundraiser. www.halcyonappeals.co.uk if you're interested.

You could also check out these sources of capital if you don't want to go down the grant funding route:

Alternative Sources of Funding​

1. Venture Philanthropy

Venture Capitalists provide funding for organisations in return for a share in the business. Venture philanthropy works in the same way except that the organisations funded produce social as well as financial benefits. There are several venture philanthropy organisations in the UK:

Bridges Capital Ventures: www.bridgesventures.com
Triodos Capital Ventures: http://www.triodos.co.uk/uk/235298/235330/?lang
CAF Venturesome: http://www.cafonline.org/default.aspx?page=6903http://www.cafonline.org/default.aspx?page=6903http://www.cafonline.org/default.aspx?page=6903[/font]


There's no doubt that venture capital is a useful way of raising finance for causes that trusts and other funders are unlikely to support. However, they are primarily interested in supporting profit-making enterprises. An example might be a company employing disabled people that produces and sells wicker baskets. Another issue is that they also sometimes take a controlling interest - they can therefore take control of the organisations functions and remove management as they please. Lastly each of the above funds has differing criteria - for example the Venturesome fund has a maximum fund level of £250,000 per enterprise.


2. Bank Loans

Any high street bank will provide loan capital to small businesses. Many will also support charities, and a few specialise in this area such as:

Charity Bank: www.charitybank.org
Triodos Bank: www.triodos.co.uk
Unity Trust Bank: www.unity.uk.com


Unlike Venture philanthropists, banks will not take control of the project. They are also more flexible than trusts and other grant makers. However they usually like to ensure that their loans are secured on property or another asset. Banks serving the charitable sector tend to be slightly more flexible than high street banks and will sometimes provide an unsecured loan - but usually the charity needs to show evidence of future income (such as written proof of a grant payment).

3. Specialist grant-makers

There are a few trusts and other bodies that issue grants or loans for projects that do not meet the criteria of more conventional funders. They include:

FutureBuilders: www.futurebuilders-england.org.uk/
Impetus Trust: www.impetus.org.uk


Once again, these organisations are very flexible and a useful source of finance for projects that other, more traditional, grant makers might not support. However they often have strict criteria of their own. For instance, FutureBuilders provides loans to capacity build community based charities in order to enable them to gain local authority contracts. The Impetus Trust provides venture capital finance but only for children's charities. Some trusts will also provide loans - but usually only to projects that fit or come close to their criteria.

 

[Third Sector Lab]

Lots of great info there Jon. It seems there's lots of people involved in the third sector in some way or another on UKBF.

 

[formerguest]

Stamp Out Suicide! featured in the UKBF Member Spotlight and this can be accessed via the link below.

http://www.ukbusinessforums.co.uk/forums/blog.php?b=216

 

[Third Sector Lab]

Excellent website...I've been getting involved with ChooseLife up here in Lanarkshire. Suicide is one of those issues that isn't very 'fashionable' but it really needs more people speaking openly about it.

 

[alanb]

Hi Ross/Dan

I am a business Consultant/Mentor/Trainer working with both mainstream business and charities/Socail Enterprises and also have a specialism/accreditation/qualifiaction for assisting Charities and Social Enterprises.

They are not second class businesses and with help in some cases can perform at best practice levels. One of the key areas for them is measuring and proving Social Return on Investment when biding for public authority tenders etc. Sadly many mainstream businesses that I work often can't provide me with accrurate measures on anything let alone conventional return on investment!

Alan Briggs
Dynamic Business Strategies Ltd.
07917 446068

 

[noidea]

I am involved (charity).

Social Enterprise are a government taxation scam!

I would recommend opting for the charity route...

 

[Officebird]

One of the key areas for them is measuring and proving Social Return on Investment when biding for public authority tenders etc.

I don't agree that the key areas for SOcial Enterprises has anything to do with bidding for public authority tenders. I wouldn't have thought many social enterprises actually bid for these tenders.

Maybe I'm wrong but this kind of thing is exactly what puts social enterpise in the charity/non profit/reliance on public money pot in my opinion.

 

[Officebird]

I am involved (charity).

Social Enterprise are a government taxation scam!

I would recommend opting for the charity route...

How exactly??

Charities and Social Enterprises have very different aims. One is a self sustainable operational business and the other is a group that relies on donations to help a good cause. This is a very broad generalisation of course but you get my point.

There are many good reasons not to become a charity and I think it is a decision that should be taken very seriously by the individuals concerned. At the Community Partnership I worked at we voted against becoming a charity and incorporated as a company limited by guarantee, which was much more appropriate to the type of organisation we were. Down the road another community partnership voted the other way and became a charity. It is horses for courses really but I don't think many social enterprises would make good charities.

 

[alanb]

I am involved (charity).

Social Enterprise are a government taxation scam!

I would recommend opting for the charity route...

Interesting viewpoint but the need for social enterprises is that Charities have a restriction on their ability to trade and therefore create income. Many charities that I help are establishing social enterprises to create profit, ( they call these surpluses), that are fed back into the charity to reduce their dangerous dependency on grants and donations. the other advantage is that they can bid for commercial contracts which in many cases they can't do as a charity. It also still eaves the charity able to gain grants.
The new form of Social Enterprise, Community Interest Companies provides the added advantage of an asset lock which protects the assets such as buildings, equipment etc.

Of course the downside of social enterprises are that they are liable for conventional business taxation including VAT where applicable, perhaps that's what NoIdea is alluding to?

Alan Briggs

 

[Officebird]

Interesting viewpoint but the need for social enterprises is that Charities have a restriction on their ability to trade and therefore create income. Many charities that I help are establishing social enterprises to create profit, ( they call these surpluses), that are fed back into the charity to reduce their dangerous dependency on grants and donations. the other advantage is that they can bid for commercial contracts which in many cases they can't do as a charity. It also still eaves the charity able to gain grants.
The new form of Social Enterprise, Community Interest Companies provides the added advantage of an asset lock which protects the assets such as buildings, equipment etc.

Of course the downside of social enterprises are that they are liable for conventional business taxation including VAT where applicable, perhaps that's what NoIdea is alluding to?

Alan Briggs

This has been my experience also. With Community Transport it is quite often necessary to have a commercial arm of some description that feeds it's profits into the non-profit/charity side to enable the original service to continue. Of course this wouldn't be an issue if there were widely available central government funding!!

 

[Bruce Allinson]

I'm involved in charity in fact in 1999 I gave up most of my business interests to set up a charity called Design Aid. We provide creative services such as graphic design for other charitable projects.

In the main we provide a professional service to those who are still to small or new to afford these these services by other means.

It has been as hard as it can get over the last nine years. We receive no funding, as all funders want to support a particular cause or geographical region and we have no such restriction as to who we support.

While I get very tired working long hours without any income and making personal efforts to fill the financial gaps, I am no less passionate about what I do and continue to measure my success in the huge amount of services we have gifted and the huge difference we have made to many different good causes ) if I did not I would have to measure it in one lost marriage one lost house and one pile of debt ( lol

Though being a philanthropist when you have nothing can be difficult I think I have proved it is not impossible.

A relaunch this year has the trustees and myself trying to implement new projects and actions on the back of a lot of lessons learnt from a lot of past mistakes.

We are now looking at smaller focused projects that can attract funding. and we will be asking for financial donations for the first time ever mainly from our peers in the advertising industry - we are not a fluffy cute charity by any means so maybe we need to ask those who understand the benefits we bring. You can donate online on the website now - another first (please be my guest all support gratefully received).

A lot of first there from those who are supposed to know (what's that about cobblers shoes) - I think we have just been so inundated with work, that you never want to turn away for so long no one has had the time to promote Design Aid it's self.

Please do check out www.designaid.org.uk - all advice, feedback, support, networking efforts etc. are most welcome - it's hard work, for the most part alone so I welcome all views and constructive comments.

Bruce

 

[Bruce Allinson]

I'm looking to start a Third Sector Forum, there seems to be a real lack of online information sharing resources for charities and social enterprises.

I take it you mean an online forum like UKBF?

Your dead right the support is hopeless, Guidestar have some very poor forums that don't work properly and Fundrasing UK have some great forums but with a narrow focus on "fundraising" of course.

We have forums on Design Aid's site but it would seam that though all forums are difficult to get going it's even harder in this sector.

But I had an idea if you or anyone else would care to lend a hand.

I registered the domain ukcharityforums.org.uk and thought that after setting up a forum on it I could place it in an i frame or wrapper on all our beneficiaries websites as all the charities we build sites for want forums and have the same problem getting them going.

Any feedback or support on this idea is most welcome

Cheers

Bruce

 

[ginantonic]

I used to work in the Voluntary Sector, in a role funded by the Gvt. Really big salary. Nice job, responsible for own workload, diary, etc. Lots of reports and justifications, though, but the salary more than made up for it. Only drawback, it was a 12 month fixed term contract, and every year there was the uncertainty that the funding would be withdrawn, and therefore no job. Of course, the funding was withdrawn, so now I am a poverty-stricken sole trader...! Life's fun, innit?!
On a more serious side, many of the positions in both the Voluntary Sector and Charity side pay silly salaries for very little work; most of it consists of attending networking meetings and funding meetings (where all the same people are, anyway, instead of working) there's a lot of talk going on and not much doing, which I had a problem with. Many of the positions are so open to abuse, it's ridiculous - I know, because towards the end of my contract, I abused it horribly, going to the gym or having my car fixed during working hours; with a little diary manipulation, it was easy. Personally, I would definitely not employ someone who has worked in these sectors without a lot of thought and background-checking. (Sorry if you are one of the good guys working for them - I was to start with.)

 

[Third Sector Lab]

I'm in the process of setting up a Third Sector Forum, Tom from Clear Blue Design is sponsoring the site, providing technical support and hosting. Alison from The Frockery has offered her support and is going to act as an admin. David over at Nothing Does design agency is creating the logo. You'll find us at thirdsectorforums.co.uk and .com in the near future. If anyone on here is keen to get involved in anyway post on here or drop me a pm. Bruce, I'd love to hear your thoughts on it. I see the forums complimenting UKBF perfectly.

 

[gogojonny]

I used to work in the Voluntary Sector, in a role funded by the Gvt. Really big salary. Nice job, responsible for own workload, diary, etc. Lots of reports and justifications, though, but the salary more than made up for it. Only drawback, it was a 12 month fixed term contract, and every year there was the uncertainty that the funding would be withdrawn, and therefore no job. Of course, the funding was withdrawn, so now I am a poverty-stricken sole trader...! Life's fun, innit?!
On a more serious side, many of the positions in both the Voluntary Sector and Charity side pay silly salaries for very little work; most of it consists of attending networking meetings and funding meetings (where all the same people are, anyway, instead of working) there's a lot of talk going on and not much doing, which I had a problem with. Many of the positions are so open to abuse, it's ridiculous - I know, because towards the end of my contract, I abused it horribly, going to the gym or having my car fixed during working hours; with a little diary manipulation, it was easy. Personally, I would definitely not employ someone who has worked in these sectors without a lot of thought and background-checking. (Sorry if you are one of the good guys working for them - I was to start with.)

I totally agree.

I have worked within the sector and am in the process of starting a social enterprise.

I started a job with a certain Government initiative and was sent on a 'planning meeting' for 2 days to a retreat. I expected 2 days of planning, instead it was 2 hours of quick planning and nearly 2 hours of free coffees, sport, meals, swimming etc.

There are too many people in the sector chasing funding. They create a project which pays themselves for 3 years. When that money dries up they scrap the project and start another one, and apply for more funding.

Figures are used a lot to try and justify projects. Every project is always a 'massive success' but talk to the people who the project should have benefited and it is a different story.

 

[noidea]

How exactly??

Charities and Social Enterprises have very different aims. One is a self sustainable operational business and the other is a group that relies on donations to help a good cause. This is a very broad generalisation of course but you get my point.

There are many good reasons not to become a charity and I think it is a decision that should be taken very seriously by the individuals concerned. At the Community Partnership I worked at we voted against becoming a charity and incorporated as a company limited by guarantee, which was much more appropriate to the type of organisation we were. Down the road another community partnership voted the other way and became a charity. It is horses for courses really but I don't think many social enterprises would make good charities.

Very broad indeed. A charity doesn't even have to accept donations.

" How exactly??" Try asking an accountant...

 

[noidea]

Interesting viewpoint but the need for social enterprises is that Charities have a restriction on their ability to trade and therefore create income. Many charities that I help are establishing social enterprises to create profit, ( they call these surpluses), that are fed back into the charity to reduce their dangerous dependency on grants and donations. the other advantage is that they can bid for commercial contracts which in many cases they can't do as a charity. It also still eaves the charity able to gain grants.
The new form of Social Enterprise, Community Interest Companies provides the added advantage of an asset lock which protects the assets such as buildings, equipment etc.

Of course the downside of social enterprises are that they are liable for conventional business taxation including VAT where applicable, perhaps that's what NoIdea is alluding to?

Alan Briggs

There is nothing to my knowledge that states that a charitable limited company by guarantee couldn't own a for profit limited company as a fund raising subsidiary.

 

[Bruce Allinson]

I'm in the process of setting up a Third Sector Forum, Tom from Clear Blue Design is sponsoring the site, providing technical support and hosting. Alison from The Frockery has offered her support and is going to act as an admin. David over at Nothing Does design agency is creating the logo. You'll find us at thirdsectorforums.co.uk and .com in the near future. If anyone on here is keen to get involved in anyway post on here or drop me a pm. Bruce, I'd love to hear your thoughts on it. I see the forums complimenting UKBF perfectly.

I'll back this all the way - unfortunately there is nothing on your domain yet but if its the same format as this than that would be great.

I did start to set up a forum and you can see it at www.ukcharityforum.org.uk but it would be very easy to build a small site and put the third sector forum up on there in an iframe or a simple direct link.

The only thing I would say about the php bb open source forums is there is no advertising on them as there is on here.

Whatever you chose I would be right behind it - the only thing I would want to see is something that fits easily into a joomla wrapper (i Frame) as this would allow me to put the forum right into the heart of a large number of existing charity websites - all of whom want forums but have difficulty in getting them going and creating a big interest. My thoughts on this is if they are all pushing the same forum together then we will have something that works very well.

cheers
Bruce

PS the Design Aid newsletter is emailed to 2,000 people in the charity sector mostly all the CVS's so we could give it a nice big announcement.

 

[Bruce Allinson]

There is nothing to my knowledge that states that a charitable limited company by guarantee couldn't own a for profit limited company as a fund raising subsidiary.

Indeed a charity is allowed to "trade" as long as the trading is in furtherace of its means and is only a percentage (25% - I think) of its income. EG a dog rescue can charge for new owners to take a dog from them as this trade actually rescues/homes a dog, but can not sell them bookmarks etc. and would use a trading arm for this.

You are quite right any limited company including those by guarantee and without share can own another company and as the only shareholder would receive all the companies profits and this is how most trading arms have been set up to date and this is the company that will sell you the dog rescue bookmarks, t shirts, mugs and other fantastic tat at crufts etc.

 

[formerguest]

Excellent website...I've been getting involved with ChooseLife up here in Lanarkshire. Suicide is one of those issues that isn't very 'fashionable' but it really needs more people speaking openly about it.

Thanks Ross. Choose Life are engaged in excellent work and by association so are you - keep it up and good luck!

 

[Bruce Allinson]

just checked out stampoutsuicide site and added link on Design Aid's site - if you can send a page "about" or a press release about the site I'll publish it on the Design Aid website and include it in our next newsletter

 

[Third Sector Lab]

Bruce...drop me a PM when you get a chance. I'd love to hear your thoughts on the Third Sector Forums.

 

[stallfinder]

Hi,
I've organised fundraising events for a small local charity which led me to setup my website which charities and event organisers can use to find fundraising ideas and information, publicise their events and find stallholders - it's a free, useful resource for charities. We have a featured charities section which is a good chance for some of the smaller, lesser known charities to promote themselves.
Gail.

 

[DuaneJackson]

I'm a trustee of www.lyst.biz, and I get involved with fundraising for the Prince's Trust

 

[formerguest]

Thank you Bruce. You have been very helpful and I'll be in contact in due course.

 

[Third Sector Lab]

There seems to be loads of people on here involved in the Third Sector in some way. If anyone is interested in getting involved in the Third Sector Forums then drop me a PM.

 

[LOUISE2206]

I'm intrigued to know how the social entrepreneurs on UKBF feel about being classed as part of the 'third sector'? I've heard from lots of people who say it's patronising and implies businesses of lower value.

Hi, I am new to the UKBF and this is my first post - so be gentle!
I am a social enterprise start up adviser with Business Link and also a trustee in one charity and company secretary for two social enterprises.

I find this to be one of the most rewarding and also frustrating sectors I know! there is so much joy to get out of the sector and 'feel good' factor, with much more joint working and collaborations than any other sector of business.

It is difficult to put a name tag on though isn't it? I see the 'third sector' tag as a way of combining and describing all the multitude of differing operations that impact on individuals and community life "on purpose". For me it includes voluntary groups, community groups, social enterprises, charities, and credit unions. I have never viewed it as a derogatory term, or indeed as a barrier to dealing with the private or public industrys. in my personal experiance the only barrier faced is one we create ourselves by not presenting ourselves as the proffessional, skilled and talented organisations we are. Negative feedback I have recieved from private industry in the past has been minimal, but their biggest complaint is that some organisations expect respect - and that has to be earnt by good business practices over time.

Also the term 'social enterprise' is very loose - and for that reason can be frustratingly difficult to describe. I view trading charities (yes it is 25%) as part of this label along with quite a few enterprises I know which are hugely successful and trade 100% of their total income.

I also class into this group pure profit making companies which are wholly owned subiduaries of charities - and why not? They are there to make a profit for social good, and in my eyes, if it is owned by a purely charitable organisation, it fulfills that criteria (have I explained myself correctly there?)

It would be good to see a dedicated forum on here just for 'thrid sector' issues and debates, I would welcome it wholeheartedly! There is a lot of knowledge, experiance and talent out there about this sector - it needs pooling!