SOCIAL ENTERPRISES

Thousands of Finnish companies aim to produce social well-being. Sitra has actively promoted 2009–2012 social enterprises and the related financing models.

New chances

The purpose of social enterprises is to produce social well-being. These types of companies are typically established to find a solution or a new operating model for a social challenge. Their operations are profitable, but generating profit for shareholders is not their primary goal. Social enterprises are value-based and have the following characteristics:

• Their operations aim to solve social problems and achieve socially beneficial objectives;
• They use more than half of their profits to achieve their goals, promote their business ideas and develop their operations;
• They are founded by people who would not otherwise be interested in starting a business.

A social enterprise may select any form of incorporation. The Finnish law makes no distinction between social enterprises and other businesses. No special support is available for these companies.

New businesses in Finland and abroad

Social enterprises operate in a variety of fields. In the United Kingdom, the pioneer of social enterprise, they typically complement public social and health-care services. In Finland, the best-known social enterprises are the Linnanmäki amusement park, which is owned by the Children’s Day Foundation, and Diacor Medical Services, owned by the Helsinki Deaconess Institute.

Social enterprises are often categorised into the social and health sector, but new operations can be created around any social injustice or opportunity. The possibilities are endless: well-being of the young, regional vitality, culture, sport, education, the needs of special groups, and so on.

Sitra promotes a new business and financing model

Sitra promotes the development of a Finnish model for social enterprise by creating better operating conditions. Sitra has been actively involved in creating a definition and a brand for social enterprise. Sitra is also involved in the Koukkuniemi and Kierrätysverkko development projects, which make use of the social enterprise model.

Other projects include creating an operating model for a fund that would provide financing for social enterprises. Sitra has also studied the prerequisites for the fund in collaboration with Eera, the Demos Helsinki think tank, the Helsinki Deaconess Institute, the City of Helsinki, the Association of Finnish Local and Regional Authorities and the Tapiola Group. The goal is to find a financial structure that is particularly suitable for Finland, encourages institutions and individuals to work for the common good and helps create and develop social enterprises. A decision on establishing the fund will be made in 2012.