Our social sector can help drive economy
Social enterprises and 'third sector' firms could have a significant role in the growth and rebalancing of the Northern Ireland economy, according to a new report.
The Social Finance in Northern Ireland document, launched by the incoming minister for finance and personnel, Simon Hamilton MLA, who will take the portfolio in 2013, was commissioned by social finance organisations, the Ulster Community Investment Trust and Charity Bank, and supported by the Building Change Trust.
The paper said the legacy of grant funding may have stifled the development of social entrepreneurs and has recommended that such firms need to be able to win contracts, deliver services or develop their own income streams from leveraging assets.
Cuts in public sector expenditure, grant funding and interest rates as a result of the 2009 economic crisis led to multiple challenges for third sector organisations.
Many of them experienced reduced revenues from government contracts, grants and bank deposits and reductions in lending by commercial banks.
But while inflation continues to add increased pressures, social needs show no signs of abating.
The report calls for government, the private and third sectors to work together to deliver a sustainable sector with strong financial and social balance sheets.
However, change is already under way in the third sector, with the diversification of funding sources and service delivery as well as increased collaboration between organisations.
The report also said that a programme of awareness raising, diagnosis and support could play a key role in stimulating demand, as well as a move to shift the sector away from its 'soft' image.
John McMullan, chief executive of Bryson Charitable Group, one of Northern Ireland's most successful social enterprises, said that he knows only too well the need to secure finance.
"Over the last number of years, we have adopted a social enterprise business model," he said.
"This means we are not dependent on grant funding but tender for contracts which are in the open market. No sector has been unaffected by the current economic pressures and the third sector must build its financial and socially-commercial capabilities.
"We are rebalancing the Northern Ireland economy and the third sector has an important role to play in public service delivery and development but it will need investment.
"To do so, it requires access to new forms of debt and equity capital and this report outlines the important role social finance can and will play in the future."
The year in which Simon Hamilton will take the finance post