Social entrepreneurs and social enterprises have the ability to enhance service provision in Ireland, filling gaps and providing sustainable, cost-effective models for both government and others to replicate nationwide.
Despite its growth to date, the social enterprise sector in Ireland lacks a coherent framework and appropriate legal, regulatory and support environment within which it can operate. As a direct consequence the potential contribution of the sector to national recovery and growth, both social and economic, is not being fully realised.
Social Entrepreneurs Ireland, alongside the Social Enterprise Task Force (SETF), is committed to working with government to introduce a number of reforms that we see as being crucial to the development and expansion of the social enterprise and social entrepreneurship sectors in Ireland. Although not limited to these issues, below you will see a list of reforms that currently represent the focus of our agenda:
Bridging the Knowledge Gap
Ireland needs to measure social enterprise activity as part of traditional CSO business surveys. By doing so we can better determine the size, structure, and needs of the sector nationally. This idea of social enterprise measurement isn’t new, with the British Department for Business, Innovation, and Skills measuring social enterprise activity as a standard part of their annual Small Business Surveys. Improved data will help enhance our understanding of the sector and its needs, allowing the state to make smarter and more cost-effective decisions down the line.
Parity of Access to Support and Training
The Irish government needs to provide both direction and resources to state agencies like the Local Enterprise Offices (LEO) to ensure that they don’t dismiss social enterprise as a business model outside of their remit. LEOs need to be resourced appropriately to do this. LEO staff should be supported to improve their understanding of the social enterprise business model, documentation to help them deal with traditional queries from the sector, the inclusion of social enterprise experts on LEO mentor lists, as well as the adjustment/amendment of existing grant supports to ensure that they aren’t unfairly discriminating against entrepreneurs utilising a social enterprise model to deliver on their mission.
Social enterprise, like all segments of the SME community, needs leadership – a clear political home within the Department of Jobs, Enterprise, and Innovation (DJEI). In addition, the sector needs to be included as part of an associated Minister of State’s portfolio. Together, this Ministerial office, alongside the Interdepartmental Group on Social Enterprise, should act as a clearing house for any future state funds that claim to be social enterprise appropriate. Additionally, Ireland needs to assign a government representative to the European Commission Expert Group on Social Entrepreneurship – currently we are one of only a handful of EU member states not involved in the shaping of Commission policy and funding opportunities for social enterprise.
Social Enterprise Development Programme
While ensuring parity of access to supports and training through agencies like the Local Enterprise Office is critical, we should also explore additional options that might cater specifically to the social enterprise business model. Establishing a pilot social enterprise development programme in a number of locations, offering training and support to local social enterprise start-ups, could go a long way in unleashing the job creating potential of the sector. Through groupings like the SETF, there exists a wealth of knowledge on the specific needs of entrepreneurs in the social enterprise space. Developing a course based off of these learnings would represent a hugely positive shift in what the state considers to be a relevant business model within the broader SME community.
Given the obvious challenges that social enterprises face in accessing seed and working capital, we need to better utilise existing funds to support their development and growth. This should include a review of state funds geared towards the SME community. Grant funds available through agencies like Enterprise Ireland, Microfinance Ireland, and the Local Enterprise Office, shouldn’t unfairly discriminate against social enterprises in the assessment of their financial model. In addition, a ‘first-loss or guarantee’ mechanism should be introduced to leverage private finance that is currently available through social finance providers. While many existing social finance providers have the ability to assess the social and commercial viability of a social enterprise, they lack the appropriate guarantee mechanisms to justify investments in higher-risk social enterprises at an economically sustainable interest rate. Such a mechanism would in fact mirror similar guarantees put in place for commercially focused funds like Microfinance Ireland, aimed at increasing employment in the SME sector.