On Thursday November 16 th, 2023, at Ireland’s fifth national social enterprise conference, OECD’s in-depth policy review of social enterprise in Ireland was launched. It is called Boosting social entrepreneurship and social enterprise development in Ireland . The Department of Rural and Community Development, through their Rural Strategy and Social Enterprise Unit, are the lead department on this issue.
In April 2022, the INOU met with the OECD Review Team and amongst the points raised was the reality that in many communities there can be insufficient income to generate a surplus as the communities / families / people using these services cannot afford the market rate. If they could, the private-for-profit sector would already be meeting their needs. It is essential that as social enterprise policy evolves and clearer funding lines come on stream that sight is not lost of the important work undertaken by community based providers, often operating on limited resources and seeking to address socio-economic exclusion within their communities.
The INOU also noted that social enterprises can have two roles that can pull against each other: (i) to run a business and keeping it going, both socially and economically; and (ii) to offer employment and progression opportunities to people who might not otherwise access them. In particular, people who are long-term unemployed, have a disability, are ex-prisoners, are members of the Traveller and Roma communities, are living in rural and isolated areas, or are living in urban disadvantaged areas. As emphasised at the meeting, securing proper funding to maintain and develop these two roles is an on-going and time consuming challenge.
In the OECD’s report Boosting social entrepreneurship and social enterprise development in Ireland they note that “ Social enterprises account for 3.7% of the total Irish workforce, accounting for 84 382 people. Women represent more than two-thirds (69%) of social enterprise workers. This aligns with the share of women (over 60%) in the social economy as a whole across OECD countries, reflecting in part the relative specialisation of the social economy in historically feminised sectors/occupations such as care, health and education. In addition, close to half (47%) of the social enterprise workforce is part-time. Social enterprises are mostly made of micro- (57%) and small (35%) enterprises.” (p8)
On the issue of Enabling access to finance and funding the OECD observes that “The misperception of social enterprises as having non-viable business models and existing financial products not tailored for their needs (in terms of collateral requirements, loan sizes and maturities) leave them with little choice but to seek grants. In addition, social enterprises in general and CLGs, which is the form mostly used by social enterprises, are not included in the range of businesses eligible for financial support from Local Enterprise Offices (LEOs).” However, they go on to note that “Ireland could capitalise more on the vibrant ecosystem of public and social lenders to expand funding and financing opportunities for social enterprises.” (p11)
On the issue of Facilitating access to markets they state that “Dividing public contracts into smaller lots can open opportunities for many small-scale social enterprises to access funding through procurement. The National Policy highlighted improved access to public, business and consumer markets as an important enabler for social enterprises. Many governments increasingly prioritise inclusion of social and environmental criteria in their procurement processes. The use of social clauses in public contracts could be a driver for easing social enterprises’ access to markets as serving societal objectives is part of their mission and business model.” (p11)
The recommendations in the report cover the following topics:
- Clarifying the conceptual framework around social enterprises
- Clarify the concepts of social enterprise and social economy through multi-stakeholder dialogue
- Promote a shared understanding of social enterprises within the broader ecosystem
- Bolstering institutional and legal frameworks for social enterprises
- Reinforce co-ordination for social enterprise policy
- Clarify the legal identification of social enterprises to better position them in the spectrum of legal companies
- Enabling access to financing and funding
- Improve social enterprises’ know-how on accessing external capital
- Consider, for example, investments in viable social enterprises and social innovation
- Increase the strategic relevance and long-lasting impact of available public funding
- Work with mainstream financial institutions and the banking system
- Facilitating access to markets
- Differentiate contracts and explore opportunities to reserve quotas for social enterprises
- Improve social enterprises’ know-how on tendering processes
- Increase procurement officers’ knowledge on the procurement challenges for social enterprises
- Promoting social impact measurement and data provision
- Co-create a framework for measuring and reporting on social impact
- Support the development of a national database on social enterprises
- Build capacity among social enterprises for measuring their impact
- Earmark financial resources for social impact measurement
- Fostering skills and business development
- Acknowledge and fully recognise social enterprises’ specific needs for business development
- Learn from best practices and improve knowledge-sharing opportunities
- Leverage social enterprises’ potential and strengths through targeted support mechanisms
The full report is available linked here.