Informaci´on Contable

A second stream of evidence shows that the emergence of a considerable number of ethnic minority social enterprises can be explained by existing ethnic minority voluntary and community organisations moving towards adopting social enterprise forms. Findings from the fieldwork reveal that the reduction in traditional grant funding available created pressure on existing ethnic minority VCOs (Cases 1, 9 and 10), to move in the direction of becoming social enterprises, i.e. trading activities. An example is provided by the Director of a social enterprise in Tower Hamlets that works with Asian disabled people. The organisation was originally established as a voluntary and community organisation and relied on grant funding from Tower Hamlets council after delivering contracting services for the council. As the Director stressed: “Tower Hamlets Local Authority has moved from grant funding to contracted services, so that is why we have been forced to shift towards trading activities” [Director, CS1]. Moreover, as shown in Box 6.4, several key informants also shared this view as they stressed that the changing policy framework of a reduction in traditional grant funding has forced ethnic minority voluntary and community organisations towards participation in contract opportunities to become financially sustainable. This was exacerbated after the Coalition Government had implemented funding cuts from 2010 and private foundation funding had also fallen. It can be argued that this shift contradicts the

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basic notion of the “Big Society” which is supposed to help the third sector to flourish (Murdock, 2010). This issue also raises the question of whether these organisations would continue trading if new grant funding streams were to be made available for them.

Box 6.4 A transition to the social enterprise model

“SE is becoming the business model of the future. Well, I think yes, I think they

[ethnic minority voluntary and community organisations] are moving in that direction,

mainly because years ago local authorities used to give grants to activist groups in order to include them in the political environment, but this is not happening anymore, so people are forced to look for alternatives ways in terms of achieving more for what would have been their charity or what would have been the money from the sources which they usually rely on. That is why they have to generate income to be sustainable” [BME Development Manager, I12].

“It is not that they [ethnic minority voluntary and community organisations] are choosing to form a social enterprise but that they have been forced in this particular direction” [Business Support Manager, I1].

Besides this, evidence indicates that this transition towards the social enterprise model has disproportionately affected ethnic minority VCOs that serve a particular community. This was clearly illustrated by the director of a social housing association in Greenwich that served Black African Caribbean young single people. As seen in Box 6.5, the director points out that their services were too specific as they were working with a single community (Black African Caribbeans); thus, they were compelled to think about their future in a more sustainable way through trading activities or broadening the base of their beneficiaries and services provided (such as from specialised to generic ones) to ensure they remained eligible for funding.

Box 6.5 Removal of grant funding to single group organisations

“We are not going to receive any more grants. There is a long process and it seems that the service we provide is probably too specific; they are looking for more generic services. The grant was taken away because we are focused on specific services and the government is interested on more generic services. We have already taken steps to get the organisation to become more secure funding in order to be more sustainable, we have increase our trading activities” [Director, CS9]

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These findings demonstrate the importance of the changing policy framework; where grant- funding priorities are currently provided for ethnic minority organisations that promote interaction among people (see Section 2.3.4 for earlier discussion). A key informant corroborated this, as he pointed out: “As lot of funders don’t look into money for single ethnicities, they look into bridging communities... they look into faith; how one faith community can learn about another faith, so interaction” [Policy officer, I5].

As expected by government, changes have benefitted the emergence of ethnic minority social enterprises, as many VCOs that operate for a specific community have been compelled to operate under the social enterprise model. Yet, this change in policy framework can be seen as a ‘push’ factor that triggered the change of direction (Madichie and Read, 2008). Furthermore, the case studies revealed that although there was evidence that a considerable number of organisations had moved in the direction of social enterprise, these organisations did not in fact feel comfortable engaging with the notion of ‘social enterprise’, preferring the ethos and values of VCOs and charities. An example of this comes from the Director of a social enterprise that works with Asian disabled people in Tower Hamlets who stressed: “We are service providers, we are not a social enterprise, well, we are a Registered Charity” [Director, CS1]. Important also in assessing the nature of change was the organisations’ understanding of the term ‘social enterprise’. The interview results revealed that some case study organisations had a limited understanding of the term ‘social enterprise’ and exhibited a degree of confusion over what a social enterprise is or does. The first example is provided by the Coordinator of a health related social enterprise in Tower Hamlets that provided services for ethnic minority communities in the local area (see Box 6.6). The second example comes from the Director of a social housing association working with Black African Caribbean single young homeless in Greenwich. In the latter case, such was the confusion about the term that they even requested a definition of the term ‘social enterprise’ (see Box 6.6).

160 Box 6.6 Lack of understanding of SE

“I think I’d struggle to distinguish when a particular project crosses the line from being a

charitable service to a social enterprise. It has always been a bit confusing to know about what the term social enterprise is because…you know… I’ve been managing a charity for many years and, actually, it looks like we are a social enterprise, well the Young Foundation did a profile of social action and describe the organisation as a social enterprise”

[Coordinator, CS10].

“If you give me a definition of SE, I will be able to answer the question better because I haven’t looked exactly what SE means or what it is” [Director, CS9].

The fact that a number of ethnic minority social enterprise organisations barely associated their trading activities with the social enterprise label illustrates that BME organisations in general tended to regard social enterprise as “alien” to the third sector. This view is evident more widely within mainstream third sector organisations (Sepulveda, 2009). In contrast, those organisations registered as Community Interest Company, Company Limited by Guarantee and Company Limited by Shares, demonstrated a better understanding of and felt more comfortable with the notion of being a social enterprise (see Tables 6.1 and 6.2).