Social enterprises are businesses that reinvest or donate portions of their profits to tackle social and environmental issues. Over 70,000 exist in the UK, from cafes to gyms to architecture practices, and a high proportion of these are Small and Medium sized, working directly in the communities that need them most, with a turnover of under £1 million. This report examines where smaller social enterprises work, who they employ, what they do and how they make their money.

Key findings of the report include:

• More than half of smaller enterprises are based in the most deprived areas in the UK
• 27% of enterprises are working in the top 20%the country’s poorest communities.
• In contrast, just 15% of similarly sized registered charities operate in these areas.
• 69% of smaller social enterprises support individuals from disadvantaged groups18% of smaller social enterprises in the poorest parts of the country are receiving income from European funding and are directly under threat by Brexit

Many smaller enterprises have a local focus, with 62% employing all their staff from their local area, and 41% have their main social objective as improving their community. They are commonly found to be working with residents to find solutions to social issues, from unemployment to mental health.

Smaller social enterprises tend to be more representative of the local areas where they work, being more diverse in their leadership than traditional SMEs. 49% are led by women and 21% have a BAME leader.

The findings show a dynamic sector with a high start-up rate. These start-ups co-exist with a stable band of older social enterprises with 35% having been operating for over 20 years.

This report was commissioned by the Foundation and draws on data from SEUK’s annual survey of their members, State of Social Enterprise.