The extent and impact of formalized social enterprise activities in voluntary and charitable organizations involved in public service provision in Wales

This paper presents new empirical evidence from the survey stage of a two-stage methodological study that investigates the extent and impact of formalized social enterprise activities in voluntary and charitable organizations involved in public service provision in Wales. The survey is conducted in partnership with the Wales Council for Voluntary Action. Adopting an exploratory approach, the survey reveals that charities in Wales are undertaking social enterprise activities in informal and formal ways. Contrary to the much trumpeted governmental policies and initiatives to develop formalized social enterprise for public service delivery in the UK, charities in Wales generally ascribe their social enterprise endeavours not to any particular legal form per se but as part of a wider range of evolving activities undertaken by them to sustain or further their primary charitable mission/goals. Their decision to embark on formalized social enterprise activities had less to do with fulfilling the government’s policy agenda of increasing public service delivery through social enterprises but more to do with adapting to an increasingly competitive fund raising environment. The type of social enterprise activities undertaken by charities tends to be narrow and revolves around specialist services and sale of products that are closely related to the charity’s mission. Charities face challenges in the process of embarking on formalized social enterprise activities such as developing a weak business-orientation and skill base, balancing the benefits and risks associated with mission-related social enterprise activities, and managing the tensions arising from a clash of operating culture between the parent charity and its social enterprise subsidiary. These findings have specific implications for the management and governance of formalized social enterprise activities by charities and for the development of the social enterprise movement in Wales by policy makers, local governmental agencies and voluntary sector umbrella bodies