What does it take to run a social enterprise? We recently spoke to Catherine Gray, Founder and CEO at Cup-O-T, a social enterprise and non-profit organisation focused on offering mental health services to children and young people. Cup-O-T offers free or subsidised therapy, adapting creatively to clients’ needs. They utilise a mobile therapy van and woodland space for sessions, fostering a more inviting and effective therapeutic environment.
You can watch the whole conversation from The Healthy Practice podcast here:
Some of you may already be involved in a social enterprise, be that running your own or offering services at one, or perhaps you’ve always wanted to have more of a social impact with your work. Starting a social enterprise can be an exciting and rewarding venture. It allows you to combine your passion for making a positive impact with your entrepreneurial drive.
It’s no small feat, but with dedication, innovation, and a strong support system, you can make a real difference in the world while building a successful business. So, if you’re passionate about creating positive change, Catherine Gray takes you through the ins and outs of starting a social enterprise.
Key Takeaways:
- A social enterprise combines profit with social/environmental impact, valuing societal contribution over financial gain.
- Suitable for businesses focused on social impact, targeting underserved communities, reinvesting profits for social good, and embodying ethical values.
- Social enterprise types include Fair Trade, Community Development, Socially Responsible Businesses, Environmental Organisations, Non-Profits, and Worker Cooperatives.
- Options include non-profits, Benefit Corporations, and cooperatives, each affecting operation, funding, and mission achievement.
- Funding sources range from grants, impact investment, crowdfunding, and community shares, to corporate partnerships, competitions, loans, trading income, and government contracts.
What Is a Social Enterprise?
A social enterprise is a business that prioritises positive social and environmental impact alongside financial profit. These organisations operate with the belief that they can use their business model to create meaningful change in the world, whether it’s through addressing important social issues, empowering marginalised communities, or minimising their environmental footprint. Unlike a charity, a social enterprise aims to develop sustainable income streams beyond grants and donations. This approach allows more autonomy and sustainability, which is particularly important in competitive funding environments.
As opposed to traditional for-profit businesses, social enterprises measure their success not just in terms of financial gain but also in terms of their contribution to society. They are driven by a mission to make a difference and to create a more equitable and sustainable world for future generations.
Catherine Gray, with a psychology degree and a master’s in occupational therapy, worked in various NHS mental health services before founding Cup-O-T. Her experience revealed gaps in services, inspiring her to start a social enterprise focused on mental health for children and young people.
Could My Business Be a Social Enterprise?
If you’re passionate about starting a business focusing on healthcare or mental health, and you also want to create a significant social impact, you might be exploring the idea of establishing a social enterprise. Frustrated with the limitations of existing mental health services, Catherine developed Cup-O-T to fill gaps, especially for those ineligible for NHS services or unable to afford private care. The enterprise, now six years old, has evolved into a full-time service over the last two years.
Understanding whether your healthcare or mental health-focused business idea fits into the social enterprise category involves several key considerations.
Firstly, reflect on the primary mission and purpose of your business. Is it dedicated to improving healthcare or mental health outcomes in society? A business idea with a clear, specific mission to enhance health and well-being, deeply integrated into its operations, is a strong candidate for a social enterprise.
Secondly, consider your target audience. Does your business aim to provide underserved or marginalised communities with healthcare or mental health services? Social enterprises often focus on addressing the needs of these populations, so if this is a central aspect of your business plan, it aligns well with the social enterprise model.
Next, evaluate your business model, especially how you plan to generate and utilise revenue. Social enterprises typically reinvest a significant portion of their profits back into their social mission. If your business plan includes a commitment to reinvest profits into improving healthcare or mental health services, this is a key indicator of a social enterprise.
Lastly, assess the core values and ethos of your business. Are ethical practices, sustainability, and social responsibility crucial to your operational philosophy? These values are fundamental to social enterprises, and a strong alignment here further suggests that your business could thrive as a social enterprise.
Social enterprises in the healthcare sector have the potential to make a profound impact on individual and community well-being while maintaining financial viability. By evaluating your mission, target market, business model, and values, you can determine if your idea can succeed as a social enterprise, contributing meaningfully to the healthcare and mental health landscape.
What Types of Social Enterprises Exist?
Social enterprises come in many different shapes and sizes, each one with its own unique approach to addressing social and environmental challenges. Below are a few examples of the wide range of social enterprises that exist today:
1. Fair Trade Organisations: These organisations work to ensure that producers in developing countries receive fair compensation for their goods. They often focus on products such as coffee, chocolate, and handicrafts, aiming to create economic opportunities for marginalised communities.
2. Community Development Corporations: These organisations focus on revitalising and strengthening local communities, often through affordable housing, job training programs, and small business development.
3. Socially Responsible Businesses: Traditional businesses prioritise social and environmental impact alongside profits. They offer sustainable products, commit to fair labour practices, or donate some of their profits to charitable causes.
4. Environmental Conservation Organisations: These organisations work to protect and preserve natural resources and ecosystems. They might focus on reforestation, wildlife conservation, or sustainable agriculture practices.
5. Non-Profit Social Enterprise: These organisations operate with a social mission and reinvest any profits into the furtherance of that mission. They might focus on education, healthcare, or poverty alleviation issues.
6. Worker Cooperatives: These are businesses that are owned and operated by their employees. They often prioritise fair wages, workplace democracy, and community stewardship.
These are just a few examples of the diverse range of social enterprises that exist. They all commit to using business as a force for good and are dedicated to creating positive social and environmental impact alongside financial sustainability.
What’s the Legal Structure of a Social Enterprise?
A social enterprise blends addressing social issues with revenue generation, and its legal structure differs from traditional for-profit businesses, varying by country and region.
Cup-O-T is a company limited by guarantee, functioning as a not-for-profit social enterprise. This structure allows for trading arms to generate income, supporting their social mission. The decision-making process involved exploring various structures and attending courses like the School for Social Entrepreneurs.
Other common models include:
- Non-Profit Organisation: Often chosen by social enterprises focused on grants, donations, and government funding, non-profits are typically tax-exempt and must reinvest profits back into the organisation, not distributing them to shareholders.
- Benefit Corporation or B-Corporation: Designed for businesses with a core social or environmental mission, these corporations must consider their impact on society and the environment, not just shareholders. This structure offers more flexibility than a non-profit, balancing profit pursuit with social mission.
- Cooperatives: Owned and operated by members who share decision-making equally, cooperatives can be worker-owned or consumer-owned. They suit social enterprises aiming to empower stakeholders and prioritise their well-being.
Choosing the right legal structure is crucial for a social enterprise’s ability to operate effectively, access funding, and achieve its social mission. The right structure ensures the necessary support and flexibility for a lasting positive societal and environmental impact.
How Do I Know What Sort of Structure to Choose?
When it comes to choosing a structure for your business, there are several factors to consider. The type of structure you choose will significantly impact how your business operates, how it is taxed, and how much personal liability you have. Here are a few things to consider when deciding what sort of structure to choose:
- Legal and Tax Implications: Different structures offer varying levels of personal liability and tax obligations. Sole proprietorships and partnerships provide simplicity but personal liability, while corporations and LLCs offer liability protection but have more complex tax and regulatory requirements.
- Ownership and Control: Sole proprietorships offer total control but a full personal liability. Partnerships share control and liability. Your choice will affect decision-making and responsibility.
- Growth Potential: For businesses planning significant growth, structures like corporations or LLCs facilitate easier access to capital and investment, which is crucial for expansion.
- Industry-Specific Regulations: Some industries have specific legal structures due to regulations (e.g., PCs or PLLCs for legal or medical practices).
Consult with legal or financial professionals to choose a structure that aligns with your business goals and complies with relevant regulations.
How Do I Fund a Social Enterprise?
Cup-O-T focuses on non-therapy income streams like training programs and selling products (e.g., hoodies and mugs). They avoid charging end users for therapy, instead forming contracts with councils and other providers.
Funding a social enterprise in the UK healthcare sector can be approached through various channels, each with its own advantages and considerations. Here are some key methods:
- Grants and Funding Bodies: Numerous grants are available specifically for social enterprises in the UK. These can come from government bodies, private foundations, and healthcare-focused organisations. Examples include the National Lottery Community Fund, local NHS trusts for health-related projects, and specific healthcare social innovation grants.
- Impact Investment: Impact investors are individuals or funds interested in investing in businesses that generate social or environmental impact alongside a financial return. Healthcare social enterprises might attract these investors, especially if they demonstrate potential for substantial social impact and sustainability.
- Crowdfunding: Platforms like JustGiving, Crowdfunder, or GoFundMe can effectively raise funds, especially for enterprises with a compelling social cause. This method allows for small contributions from many people, often mobilised through social media and online networks.
- Community Shares: For community-based healthcare projects, issuing community shares can effectively raise funds. This method involves offering a stake in the enterprise to community members, who become part-owners and have a say in its operation.
- Corporate Sponsorship and Partnerships: Partnering with larger corporations or healthcare organisations can provide funding and other resources. These partnerships can also offer valuable expertise, mentoring, and networking opportunities.
- Social Enterprise Competitions and Awards: Participating in competitions can provide funding and visibility. These often come with prize money, networking opportunities, and mentorship.
- Loans and Social Finance: Social finance providers and ethical banks in the UK offer loans to social enterprises, often with more favourable terms than traditional bank loans. Examples include Big Issue Invest, Charity Bank, and Social Investment Business.
- Income from Trading Activities: Social enterprises generate income by selling services or products. In healthcare, this could include offering paid-for services alongside free or subsidised services, selling health-related products, or running training and workshops.
- Government Contracts: In some cases, social enterprises can bid for government contracts to deliver healthcare services. This requires a robust operational setup and meeting the contract requirements.
- Donations and Fundraising Events: Traditional fundraising activities, including events, campaigns, and direct appeals, can also be a funding source.
It’s important to carefully consider the most suitable funding strategy based on the specific nature and scale of the healthcare social enterprise. Often, combining these methods works best, ensuring both sustainability and adherence to the social mission.
Listen to The Healthy Practice Podcast
The Healthy Practice from WriteUpp guides you through the common problems of starting your own practice.
We aim to help you take control of other aspects of practice management – including work-life balance, marketing, finances, & more – by offering insights & tips from practitioners who have mastered the early stages of private practice. Listen here:
You can follow more of Catherine’s work at https://cup-o-t.co.uk/ and on social media at Cup-O-T Wellness and Therapy Services.
