non-profit-organisations-and-social-enterprises as

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Exam code:7131

Non-profit organisations

A non-profit organisation can earn profit (surplus), but any surplus money goes back into the cause
- They may have employees but often rely on volunteers to provide services
- They must keep accurate financial records and follow many of the same regulations as businesses
  - E.g. non-profit organisations must pay the National Minimum Wage
Their overall goal is often focused on helping people, the community or the planet rather than making their owners richer

Meet a local need	Improve lives
E.g. keep a village football club alive or run a food bank	E.g. fight poverty, boost health or give children a better education
Protect nature or history	Inclusion
E.g. look after wildlife, save old buildings or improve air quality	E.g. make sport, art or technology open to people who might miss out

Faversham Cricket Club
- Runs youth and adult cricket teams
- Membership fees pay for pitch hire, professional services and team kit
Beamish Museum
- Preserves North-East industrial heritage
- Ticket sales support restorations to the site building and facilities

Always link the non-profit’s finance goal (such as staying solvent) to how it can better achieve its mission

Making that finance–mission connection clear keeps you on target in 9‑mark questions

A social enterprise is a business that has the primary purpose of creating social or environmental impacts, in addition to generating profits
Social enterprises can take different forms
- Cooperatives have a social mission
  - They are owned and controlled by workers or customers
  - Members have the right to elect directors and share profits
- Mutuals are run for the benefit of members
  - Any profit made is kept inside the organisation to improve services, cut prices or pay member bonuses, instead of being paid out as dividends to investors
  - Mutuals are common in financial services (e.g. Nationwide Building Society)

Social	Environmental
Provide jobs and support for disadvantaged groups in society, such as people with disabilities or unhoused people	Protect the natural world, animals and their habitats Reduce the impact of pollution or overdevelopment
Ethical	Financial
Operate the business in a responsible way Treat stakeholders, including employees and suppliers, fairly	Make a profit to invest back into the social enterprise to expand the social work that it performs

Advantages	Disadvantages
Social enterprises often have a good reputation, which can attract highly qualified employees and encourage customer loyalty For-profit rivals may be encouraged to improve their business practices to better compete with social enterprises Deserving causes receive much-needed financial support	Social enterprises may face media scrutiny, so they must behave responsibly at all times Profits (surpluses) available for reinvestment are limited, as they are shared with members or good causes Decision-making is often slow as many stakeholders need to be consulted

Croydon Community Nursery
- Provides affordable childcare
- Any surplus goes to fund bursary places for low-income families
Big Issue Group
- Gives homeless people an income by selling the Big Issue magazine
- Also invests in social-enterprise start-ups

Butterfly Books is a social enterprise that publishes children’s educational books in the UK
Their aim is to “educate, inspire and entertain children, striving to change future generations by reducing gender bias in job roles”
A recent book entitled “My Mummy is an Engineer” challenges gender stereotypes

Butterfly Books aims to raise children’s awareness of career options to improve diversity and reduce national skill gaps