Good Business campaign – Dean Hochlaf

For the final instalment of this round of Good Business interviews, MD Jo Sutherland spoke with Dean Hochlaf, former Head of Policy and Research at Social Enterprise UK.

Could you explain more about Social Enterprise UK and its mission?

Social Enterprise UK is the national membership body for social enterprises. We define social enterprises as businesses that trade for a social or environmental purpose, and reinvest at least half their profits to further that mission. These are not charities reliant solely on donations or grants, although some may begin that way. These are businesses turning significant profits, and most reinvest around 90% of that.

We support a range of organisational structures within our membership, including community interest companies, cooperatives, and employee-owned businesses. Each social enterprise operates with a core social mission, from improving mental and physical health outcomes to creating job opportunities for vulnerable people, such as those who have experienced homelessness.

Environmental objectives are also important. Many of our members adopt sustainable practices, such as recycling and reusing materials. At Social Enterprise UK, we work to represent, support, and advocate for social enterprises, while also being a social enterprise ourselves, reinvesting our profits into growing and advocating for the sector.

Are you seeing a rise in businesses transforming into social enterprises or starting as such? Is there more appetite for ‘doing good’ among businesses?

Yes, our membership has steadily grown, and there’s government data showing a rise in social enterprises. The Department for Digital, Culture, Media and Sport estimates around 131,000 social enterprises in the UK – up from approximately 101,000 five or six years ago.

Our biennial ‘State of Social Enterprise’ survey, the largest survey of social businesses in the UK, shows a significant increase in new social enterprises, especially since Covid. The pandemic was a difficult time, with some of our long-standing members unable to continue. People are increasingly drawn to more socially driven business models, and we’re noticing that social entrepreneurs come from very diverse backgrounds.

There’s a growing awareness among consumers about ethical consumption and environmental impact, which creates a commercial benefit for social enterprises. Our data shows that social enterprises are not only addressing social issues but are also more likely to operate in deprived areas compared to traditional businesses. This is particularly true of new businesses formed in recent years.

Turning to current challenges, with the recent autumn budget, how do you think this might impact social enterprises, especially with the increase in employer National Insurance contributions?

The employer National Insurance increase is certainly a major concern. Many social enterprises, especially those providing public sector services, rely on government contracts. If these contracts don’t reflect the increased costs, it will be hard for these organisations to sustain staffing levels as they’re already running on tight margins and reinvesting profits. We’re actively working to communicate this impact to the government, especially for social enterprises in sectors such as social care, childcare, and community healthcare.

On a positive note, the Budget’s commitment to public sector investment and capital spending is welcome, especially for infrastructure improvements in areas such as the NHS and education. The government’s increased focus on net-zero goals could also provide an opportunity for social enterprises. Social enterprises are well-positioned to deliver on environmental objectives, and we hope to make the case that they are worthy recipients of this additional funding.

What frameworks or tools do you recommend for social enterprises to measure their social value effectively?

We don’t impose strict frameworks at Social Enterprise UK, but we do look for transparency and authenticity. Social enterprises are incredibly varied — some focus on employing people from vulnerable backgrounds, others on sustainability or local economic development. We value every organisation’s unique contribution and recognise that social value might look different for each one.

Our role is to encourage a high standard of impact reporting and data collection, allowing social enterprises to showcase their positive contributions authentically. Ultimately, we seek to create a community where social enterprises can aspire to something beyond profit.

Finally, what’s your pitch to purpose-driven businesses considering the transition to becoming a fully-fledged social enterprise?

For starters, becoming a social enterprise can give your business a unique selling point. Social enterprises attract customers who value ethical, purpose-driven business practices, which can help your business grow.

It’s also about reimagining your organisation’s potential. You can still pay good wages and generate profit, but reinvesting profits for social good builds stronger communities, which in turn supports a healthier business environment. When you’re committed to social goals, you’re investing in a legacy that has real, lasting value beyond financial returns.

Social enterprises are not just viable business models; they’re a means to achieve impact while fostering long-term growth. Becoming a social enterprise can be incredibly fulfilling, both personally and professionally.

Follow our Good Business campaign

Though our second phase of the Good Business campaign is over, we talk about good business all year. Watch out soon for a paper detailing our overall findings, and look back at some previous interviews:

Would you like to get involved? Email jo@magentaassociates.co.