Below is a guide to some of the many terms, phrases and acronyms you may come across in the social enterprise sector. If you’d like to add any more to this list, please let us know.
Association of British Credit Unions Ltd
Community Action Network
The process of developing skills and knowledge.
Community Development Finance Association, umbrella bodies for CDFIs (see below).
Community development finance institutions (CDFIs)
CDFIs lend and invest in deprived areas and underserved markets, such as social enterprise, that cannot access mainstream finance. Most aim to generate social and financial returns, strengthening the Communities in which they operate. A Community Investment Tax Relief of 5% p/a for 5 years is available to investors in accredited CDFIs.
Community Investment Tax Relief
A tax break to encourage investment in Community Finance Institutions. Relief of 5% p/a is paid for up to 5 years for investments in accredited CDFIs.
Corporate social responsibility (CSR)
An agenda that involves businesses attempting to improve their social and environmental impact. The national CSR organisation for the UK
is Business in the Community.
Credit unions are community based financial co-operatives and most offer a full range of services. All are owned and controlled by members who are also shareholders.
Development Trusts Association
Department of Trade and Industry
Funds invested in a business as shares. There are many different types of shares with varying rights, but investors usually have a say in the running of the company and also receive a dividend from profits.
Investment chosen according to ethical (environmental, social, moral) concerns of the investor, rather than one chosen purely for financial gain.
Paying a fair rate for goods or products when trading with businesses in the developing world.
Industrial Common Ownership Foundation
New Economics Foundation
A term used to describe companies which do not distribute their profits to shareholders but use them for social or community benefit.
An alternative to private equity finance, where part of the expected returns to investors will be social rather than financial. Defined by the Bank of England as 'long-term finance for development, with soft terms, including little ceding of control and sub-marketfinancial returns, in return for social gains.' Can take the form of 'investment' grants,loans or equity.
A programme of local development which addresses physical, social, environmental and economic disadvantages in both rural and urban areas.
The process of collecting, analysing and reporting both quantitative and qualitative information to provide an account of the performance of an organisation from a social perspective.
The process of checking social accounts to make sure that they "add up".
A term used to describe the value of social connections and quality social relationships. These non-financial resources - such as trust, partnership, shared values - enable a community to thrive and function more effectively.
The part of the economy which is neither private sector nor public sector. It includes social enterprises but also voluntary organisations, foundations, trade unions, religious bodies and housing associations.
Somebody who identifies and brings to life new business opportunities but who is motivated by public and social good rather than the need for personal profit.
Where people or groups find themselves excluded from society and economic opportunity. Commonly cited causes of social exclusion are poverty, ethnic origin, age, lack of skills, bad health, low income, criminal record or gender.
The profit in many social enterprises is referred to as a surplus, to reflect their 'not-for-profit' status.
There are two commonly used versions of this term:-
A way to enable charities to meet their objectives in innovative ways, such as Fair Trade companies.
Triple bottom line
When an organisation attaches equal importance to social and environmental objectives and outcomes as to financial objectives.
Social Investment Forum
Commonly an equity investment - that is money for a share in the business. The capital is used to achieve the next phase of business growth, be that starting-up or transforming from a small to a medium sized business. Venture Capital often buys a share for a fixed period of time and may look for board level influence.