I was delighted to present a discussion on CSR – Corporate Social Responsibility – at the official launch of Versatile Training CIC last night. I was particularly pleased to do so because I have a bit of a love / hate relationship with social enterprises – but Versatile Training is one I love! Let me explain.
The term social enterprise can take many guises and many of those organisations haven’t got a formal structure to determine whether or not they genuinely fit the social enterprise model. However a CIC, community interest company, is a fairly new type of registered company that is officially recognised as a social enterprise. These are the main characteristics of a CIC:
- They should be operated as a business.
- They must have a clearly stated community purpose and all profits must be re-invested for the benefit of that purpose.
- There is an asset lock, so that any assets are used for that community purpose particularly at the point of sale. Should the business be sold, the income generated from the sale of the assets (including any goodwill element) would be distributed to a nominated third sector organisation i.e. an individual could not benefit financially.
It sounds very good and in principle. Indeed, I am a director of Healthy Life Essex which is a community interest company. I like the model. So what are my reservations?
- Directors and senior managers can be paid very high salaries and receive other substantial benefits such as pension contributions, albeit commensurate with normal commercial rates. (Although in many genuine social enterprises directors take only small salaries – and sometimes nothing at all!)
- Social enterprises should be operated as normal businesses and generate a profit, albeit that profit is re-invested into the community purpose. Yet many do not operate in a business- like manner, relying on their third sector “not for profit” label to gain contracts and government funding.
- The above points result in some social enterprises, whether registered as a CIC or not, being set up as “smoke screens.”
- Social enterprises believe they should be treated with priority over “normal” businesses. And yet I know many small businesses that don’t call themselves social enterprises yet play a very important role in society, contributing social and economically in a variety of different ways. I don’t believe social enterprise status should automatically defer preferential treatment.
However, Versatile Training CIC absolutely epitomises the essence of a good social enterprise and I therefore support them wholeheartedly.
Versatile has been set up as a separate company, but it is effectively the business training arm of Voluntary Sector Training (VST), an established registered charity that trains charities, voluntary groups and other third sector organisations. This training would normally be offered at no or low cost, often supported by government funding. But VST recognised that funding streams were drying up and most third sector organisations could not afford to pay commercial rates. VST would not be able to provide a much needed service and would probably not survive. Realising that their expertise in training could be extended to the commercial sector they decided to expand their offering. However, with a sound commercial head on, they realised that working under the umbrella of VST would not be enticing to companies.
And so Versatile Training CIC has been launched. Versatile draws from the expertise, experience and connections of VST and can therefore offer highly successful bespoke training to businesses at competitive prices.
But what makes me love Versatile is that the profits are then invested in to VST so that the voluntary sector can continue to receive the training they need at highly subsidised prices: thus helping local communities by helping the voluntary sector that do such great work.
Since responsible businesses understand the importance of training their staff and profits from using Versatile are ploughed in to such a good cause, if you have a business in Essex I strongly recommend you consider using their services. https://www.theresponsiblebusinessdirectory.co.uk/versatile-skills-training-cic