FAQ

Q. What is a social enterprise?

A social enterprise is a business that trades primarily for social and environmental purposes. Social enterprises work in almost every industry in the UK, from health to transport to IT to recycling to education and employment.
Some of them are very well known, like the Eden Project and The Phone Co-op. But there are many more without as a high a profile that are working across the UK and beyond to provide innovative solutions to some of the most pressing issues we face.

Q. What do we know about social enterprise?

Government figures estimate that there are 62,000 social enterprises in the UK, contributing £24 billion to the economy and employing at least 800,000 people.
Social enterprises are an important and thriving part of the economy. They are ambitious, and are as capital-hungry as small business: One-third of social enterprises have sought finance over the past 12 months. The finance sought is mainly for growth: 60% of all funding required by social enterprise is expansionary – investment for new projects/service development, capital investment such as plant or buildings and expansion.
Social enterprises also challenge the glass ceiling: 26% of social enterprises could be described as ‘women-led’ – almost twice as many compared to small businesses (26% compared to 14%).  Furthermore, 41.1% of all board members are women, compared to just 11.7% of board members in FTSE 100 companies and 4.9% in AIM-listed companies.

Q. What is the Social Enterprise Mark?

The Social Enterprise Mark is the brand for social enterprises. The Mark will identify businesses which meet defined criteria for social enterprise. And consumers will recognise that businesses displaying The Mark are trading to benefit people and planet.
It aims to communicate the ethical values represented by social enterprises to a range of audiences, emphasising the principle that social enterprises are businesses trading for people and planet.
By being visually exciting, legitimate, and useable, The Mark will help businesses promote their ethics and values in a simple but profound way.

Q. What is the reason for the Mark?

Social enterprises are businesses doing really extraordinary things in new and innovative ways but they have until now been hard to recognise, partly because they work in practically every industry imaginable and range from community enterprises to international organisations.
The Social Enterprise Mark Company believes it is beneficial to our economy and society to have a strong social enterprise movement and believes it will grow in size and strength if more people – from customers, to businesses to the government - are able to easily identify what a social enterprise is.
Greater awareness is needed, and The Mark can go a long way to raise the profile of social enterprise and bring it into the mainstream, where it belongs.

Q. What are the objectives of the Mark?

The primary objective of The Mark is to develop knowledge and understanding of social enterprises across the wider public and communities by establishing a brand to represent businesses trading for people and planet.
The second objective of The Mark is to create a network of social enterprises. Having The Mark will give a social enterprise access to a network that connects them not only with each other, but with consumers and other businesses for trading opportunities.

Q. How does a social enterprise qualify for the Mark?

• Does it have social and/or environmental aims?
• Does it have its own constitution and governing body?
• Are at least 50% of company profits spent on socially beneficial purposes?
• Does it earn at least 50% of its income from trading?
• Can it demonstrate that social/environmental aims are being achieved?
• If the company ceased trading would remaining assets be distributed for social/environmental purposes?

Q. Where did the Mark come from?

Research conducted by The Central Office of Information (COI) on behalf of the Office of the Third Sector in 2008 found that even when pitching the concept of (and words) ‘social enterprise’ to sympathetic sections of the population, there was little recognition of the term and even some scepticism by the public that combining business practice with delivering social good was possible.
Further research suggested that a way to raise awareness would be through an ‘brand identifier’ What is now The Social Enterprise Mark came out of extensive testing of different visual models and builds on the existing pilot in the South West, designed by RISE.

Q. Is this mark the same as the Social Enterprise Mark designed and delivered by RISE?

No, but it builds on the pioneering work that RISE has done, and continues the use of its name. Additionally, it also has the same strap line, ‘trading for people and planet’ which tested positively in the market research. All social enterprises awarded RISE’s mark will automatically receive the new Mark.

Q. Who decides if a social enterprise meets the criteria?

If a social enterprise meets the criteria listed then it is easy to get The Mark. If there are social enterprises that are borderline applications or ones which are not straightforward to assess, they are reviewed by a panel of business, legal and social enterprise experts.

Q. Does the mark cost money?

A small amount - £99 + VAT as an introductory offer. In due course the fee structure will change to be based on turnover.

Q. What is the campaign device and how does an organisation get one?

The campaign device may only be used by social enterprise support organisations such as the Social Enterprise Coalition, the regional networks, the Development Trusts association etc. that work for and with social enterprises on a regular basis. Approval for its use is granted by The Social Enterprise Mark Company. The logo is distinguishable from The Mark as it does not appear in a box and should be used in conjunction with additional wording such as ‘xxx is proud to support social enterprise’.

Q. Do you have to renew the mark?

Yes. The licence to use The Mark is granted for one year and Mark holders will need to renew this annually. Some of their organisations details will remain the same which means that renewal is a straightforward process. However, it is necessary to check that the social enterprises are still meeting the criteria to retain The Mark’s integrity.

Q. What are the benefits of having the mark?

The Mark is a way to promote your values to a wide audience. Social enterprises don’t have a way to shout about the way they do business differently, but The Mark will change all that. The logo can go on all marketing materials including letterhead, website, and your products.
And beyond the marketing and promotional aspect, as a Mark holder, you will be part of a network of social enterprises and part of an online directory for people and companies who are looking to trade with social enterprises.
Additionally, you will automatically get membership of the Social Enterprise Coalition, and if you’re in the South West, membership of RISE.

Q. If you don’t have the mark does that mean you are not a social enterprise?

There will be many businesses out there working for social and environmental gain and doing great things that will not be able to qualify for The Mark. There will also be social enterprises that choose not to apply for The Mark.
This is not about fencing off those businesses that do not have The Mark, but The Mark is in place to recognise those that do fit the criteria and to act as a simple and easy identifier.

Q. What are the legal requirements to get the Mark?

Your business  needs to have its own constitution (eg not be part of a local authority or a sole trader) and in your constitution you need to show that you have clear social and/or environmental aims, and that a principle proportion (50% or more) of any profit made by the business is dedicated to social/environmental purposes, as are any remaining assets if your organisation was to close.

Q. What are the trading requirements to get the Mark?

You need to show that at least 50% of your income comes from trading.

Q. 50% of my organisation’s profits are distributed to members/shareholders – is there a cap on the maximum share dividend?

Yes, the cap is the same as the CIC maximum dividend per share cap, which is 20% of the paid up value of a share.

Q. What documentation do I need to provide to get the Mark?

Most of the evidence you need is contained in your constitution and your most recent set of final accounts. We would also like to see an example of any externally verified evidence to show that your organisation is meeting its social or environmental objectives.

Q. Do I need to provide separate pieces of externally verified evidence to show that my organisation is measuring both its social and environmental impact?

No, whichever type of impact is most relevant to your organisation and its objectives.

Q. How much of my total income needs to be from trading?

At least 50%.

Q. How do you define trading?

Trading is defined as income from sales, a contract or service level agreement with defined outputs. Trading excludes grants and donations.

Q. What legal structure do I need to have?

Mark holders come in all shapes and sizes. We have companies limited by guarantee, community interest companies, industrial and provident societies, companies limited by shares.

Q. Can I get the Mark if I don’t make any profit?

Yes, in fact many social enterprises provide ongoing financial support to social or environmental activities and so will never aim to make significant profits?

Q. I’m a charity, can I get the Mark?

Yes, if you can meet the trading criteria.

Q. My organisation is only just setting up, should I think about the Mark now?

If you are thinking of setting up a social enterprise, now is a good time to look at the Mark criteria.  You can use it as an action plan to inform your choice of legal structure and to be eligible for the Mark when you can demonstrate you meet the criteria of 50% of your income from trading.

Q. If my organisation is less than one year old can I still get the Mark?

The vast majority of our Mark holders have been trading for a year, as they use their annual accounts as evidence of sustained trading levels. We believe this will continue to be the case. If you can provide significant evidence of trading (not planned trading but actual) over a significant time period (over 6 months) then we may be able to look at your case. Also if your enterprise previously existed as part of another organisation, then we may be able to get evidence from this source.

Q. What do I get for £99 + vat?

You sign up to a strong brand that communicates your identity as a social enterprise. You can differentiate your organisation from the competition and you can make your customers proud of buying from you.  You get the licence to use the Mark for one year alongside additional marketing materials and support (e.g. stickers for your company vehicles, window stickers, a press release template, and a certificate). Your organisation is featured on the on-line Social Enterprise Mark Directory, where you are recognised as part of a diverse community of companies all trading for people and planet.

Q. Why is it important for me to display the Mark once I have been awarded it?

Tell your customers you are unique: with the growth of ethical consumerism, customers want to buy from a company that puts profits back into the community rather than to private owners, and prefer to buy from organiations that make decisions based on concern for society and the environment.

Q. I’m a social enterprise advisor, what are the key messages for me?

Ensure social enterprises are separately constituted and can show in their constitution that they have clear social and/or environmental aims, and they have an asset retention clause. Specifically, they should: 

* have social and/or environmental aims?
* have it's own constitution and governing body?
* at least 50% of the company profits spent on socially beneficial purposes?
earn at least 50% of its income from trading?
* demonstrate that social/environmental aims are being achieved?
* If the company ceased trading would remaining assets be distributed for social/environmental purposes