What is social and co-operative enterprise - Lincolnshire Co-operative Development Agency
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What is social and co-operative enterprise


This world is very familiar with private enterprise, corporations and businesses with a boss….the flip side is social enterprise! Neither is a right or a wrong way of doing business they just have a different focus.  In private enterprise the success, the failures and the profits are there for the owners/share holders whereas in social enterprise the driver is the social purpose at the heart of the enterprise with all profits going back into the business.  This does not mean that those who run the social enterprise are not paid according to their skills and abilities and a good wage is important but the key difference is what happens to the surplus, this does not benefit those who set up/run the social enterprise as it is used to benefit the enterprise further.  With social enterprise invariably the risk and success is shared amongst many others too, especially when incorporated.  (Legal forms include Company Ltd by Guarantee/CIC/CIO and Community Benefit Society plus Co-operative) – some legal forms can be charitable and registered accordingly)

The Co-operative Difference in simple terms:

Some ideas of what might make a co-operative business significantly different from others. Focussed on a broad definition of what will add to the well-being of its members to encompass all aspects of their lives, their wealth, social and physical environments and those of the communities in which they live in a triple bottom line of prosperity.

  • How it makes its profits

Trading fairly and ethically

Operating with consideration for the environment

Trading in a way that contributes to quality of life in our communities

Improving standards and driving markets to improve

Encouraging local trading, low food miles, freshness and quality

Nurturing and empowering its staff with a broader vision

  • What it does for reasons other than profit

Providing services in markets which are not commercially viable

Combatting exclusion and discrimination

Creating opportunity for the disadvantaged

Increasing diversity

  • How it influences others

Other businesses to try and trade with a common purpose

Others that provide services to the communities its members live in

Public policy makers, making laws and governing

Civil society activists and leaders in our communities

  • How it supports others

Helping them trade as better businesses in its supply chains and communities

Helping them improve the quality of life in our communities

Giving them a voice in society

Encouraging them to co-operate and support each other

Helping them to help it to achieve the better communities its members deserve

Empowering others to make a difference in society

  • What it does with its profits

Reinvesting to improve the services we provide our members

Distributing back to our members

Supporting others who improve the well being of people in the communities where our members live

What defines a Co-operative?
Co-operatives are broadly defined by three main features:
• They are primarily businesses (i.e. they conduct a trade).
• They demonstrate a commitment in their governing documents to the internationally recognized Co-operative values and principles (see separate sheet)
• They have a democratic structure (one member/one vote).
Labour vs. Capital – One of the most important things to remember about Co-ops is that they are all about reversing the basic capitalist model of Capital hires Labour which means, in practice, that rich investors pay other people to make money for them. In most businesses this is reflected in wealthy investors owning the business and reaping the rewards for other peoples work.. in a Co-op the reverse is true, Labour hires Capital. The members borrow or invest their money to achieve their goals then reap the rewards themselves.
Types of Co-operative
Housing, building, retailer, utility, worker, credit unions, social, consumer, agricultural, political, community, financial, insurance, educational, market trader, fishing, collective purchasing, consortium, secondary, multi-stakeholder, advice, support, legal, creative/artisan, supporter,……. What might yours be??
What are the benefits of being a Co-op?
• All Co-operatives have, by definition, made a public commitment to a recognized system of values and principles. This gives them a valuable brand identity.
• Co-operatives have greater stakeholder involvement and commitment which has direct economic benefits (e.g. Co-ops generally have far more loyal customers than other companies in the same line of business and workers in a worker Co-op tend to be more productive than in other more non co-operative businesses).
• It is difficult for one person or a small group to take control of a Co-operative.
• Co-operatives are often Mutual in nature and, as such, can benefit from tax breaks.
• Co-operatives are part of a wider international movement.
• Some types of Co-operative can sell shares whilst still being democratically owned.