Charities/Voluntary Organisations

• Charities are not-for-profit organisations, but they usually aim to raise funds for support good causes eg Oxfam, Shelter etc.
• Clubs, political parties and religious organisations are charities. A sports club, for example, is set up to give its members the opportunity to join in with their activity.

Ownership

• Charities are owned by their members but if a member leaves they cannot take back the funds they have donated.

Control

• Charities are controlled by an elected Committee, the members of which are often volunteers. Large charities may employ paid managers and staff to run the service.  Many charities have a Board of Trustees whose job it is to oversee the management.

Finance

• Charities are funded by members’ subscriptions, donations and fund-raising events eg raffles, sponsored walks, coffee mornings.
• Charities often also carry out trading activities through shops and catalogues. Charities may be awarded grants from the lottery, government or other charities, or they may be left money in a will.

Advantages	Disadvantages
They create opportunities for people to follow ideals, believes and hobbies. As they are not-for-profit, any charges for taking part should be lower. They are entitled to relief from some taxes and may receive grants from the government or other the lottery.	They may find it hard to raise enough funds to operate – they compete with other charities trying to raise funds. Volunteers may lack the skills and knowledge to run the organisation efficiently. They may not be able to afford to pay competitive salaries to their paid employees so may not retain high quality staff.

Social Enterprises

• Social enterprises must be run in an ethical manner eg good terms and conditions for staff, environmentally friendly products and practices.

Ownership

• A social enterprise is an organisation that has been set up by private individuals or groups for social and/or environmental purposes.
• Social enterprises exist to make a profit or surplus, but these must be reinvested into their social or environmental purpose.

Control

The organisation is run and controlled by a board of directors

Finance

• Social enterprises can raise finance through crowd-funding, loans, donations and selling their products.
• Profits are reinvested into the business

Examples of social enterprises include Big Issue, Glasgow Housing Association, Isle of Eigg Heritage Trust, Capital Credit Union.

Advantages

Disadvantages

Services over and above those offered by the public sector are provided to communities and disadvantaged groups in society. Social enterprises provide self-sustaining solutions to social and environmental problems. Social enterprises can attract loyal employees and customers who support their aims. Social enterprises may receive tax incentives and grants. Profits must be reinvested to support the work of the social enterprise

Trading practices must fit with the ethics of the organisation eg they cannot use suppliers who do not treat their workers well or look after the environment, so end products may be more expensive. More difficult to set up than a voluntary organisation in terms of registering and complying with the Companies Act.

www.socialenterprisescotland.org.uk or www.socialenterprise.org.uk