Empowering Social Enterprises: How Governments Can Make a Difference

Social enterprises (SEs) play a pivotal role in addressing pressing societal issues while fostering economic growth and innovation. These businesses blend profit with purpose, working to create a positive impact on communities and the environment.

Governments are realising more and more the importance of social enterprises to build more inclusive and attainable socio-economic agendas. SEs can generate national-level returns, for example countries like the United States and Italy are encouraging social enterprises because they are able to improve the quality, affordability and equity of service supply. Furthermore, they can have high return rates especially on the long term, and are able to reduce inequalities by providing stable employment to those that would otherwise be left out of the labor market.

One of the most effective ways governments can assist social enterprises is by providing financial support. Grants, subsidies, and low-interest loans can offer much-needed capital for startups and growth-stage social enterprises. Tax breaks for both social enterprises and their investors can stimulate investment and growth in the sector. The tax advantages help attract resources that can be used to drive social change and innovation.

Governments can also support social enterprises by creating legal frameworks that recognise and define them. By establishing a clear legal identity for social enterprises, governments can make it easier for them to access funding, contracts, and resources.

To ensure the success of social enterprises, training and capacity-building programs can also be provided. These initiatives can equip social entrepreneurs with the skills needed to manage their businesses effectively.

The Big Issue is a social enterprise that addresses homelessness and poverty. The organisation publishes a magazine that is sold by homeless and vulnerably housed individuals, providing them with an opportunity to earn a legitimate income. The UK government has been instrumental in supporting The Big Issue by allowing vendors to access various social services. This includes housing support, healthcare, and other social welfare programs. Furthermore, many local authorities and public institutions in the UK actively purchase copies of The Big Issue for their offices, which provides a steady source of income for the social enterprise.

Other financial support from the Government has helped the organisation expand its activities and increase its impact: during the COVID-19 pandemic, the government provided emergency funding to help The Big Issue and its vendors cope with the economic challenges posed by lockdowns.

Social entrepreneurship is a hub for promoting innovation and creativity, also because they operate in always-changing environments, and employees are often encouraged to participate in decision making.
SEs can inspire others to follow their steps, by showing that a company can still be successful and growing even if the main focus is not necessarily to make money for the shareholders but to give back to their community and highlighting social challenges to then dedicating themselves to solving them. Governments have a crucial role to play in nurturing the growth and impact of social enterprises. By providing financial support, tax incentives, legal frameworks, market access, capacity building, networking opportunities, and research, they can help these businesses reach their full potential.

You can find out more about The Big Issue on their website: https://www.bigissue.com/