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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.
ABCUL
Association of British Credit Unions Ltd
CAN
Community Action Network
Capacity building
The process of developing skills and knowledge.
CDFA
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
Credit Unions
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.
DTA
Development Trusts Association
DTI
Department of Trade and Industry
Equity finance
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.
Ethical investment
Investment chosen according to ethical (environmental, social, moral) concerns of the investor, rather than one chosen purely for financial gain.
Fair trade
Paying a fair rate for goods or products when trading with businesses in the developing world.
ICOF
Industrial Common Ownership Foundation
NEF
New Economics Foundation
Not-for-profit
A term used to describe companies which do not distribute their profits to shareholders but use them for social or community benefit.
Patient capital
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.
Regeneration
A programme of local development which addresses physical, social, environmental and economic disadvantages in both rural and urban areas.
SEC
Social
SEL
Social
Social accounting
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.
Social Auditing
The process of checking social accounts to make sure that they "add up".
Social capital
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.
Social economy
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.
Social entrepreneur
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.
Social exclusion
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.
Surplus
The profit in many social enterprises is referred to as a surplus, to reflect their 'not-for-profit' status.
Sustainability
There are two commonly used versions of this term:-
Trading arms
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.
UKSIF
Venture capital
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.
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