Narrowing the Divide Between For-Profit and Non-Profit Enterprises

Members of our sector have an identity crisis. Not because we don’t know who we are, but because we do know, we declare it at every opportunity, but sometimes it’s easy to get the impression that hardly anyone is listening.

Community and voluntary organisations tend to be ghettoised by the misperception that they are somehow supplemental to the mainstream economy. Because they are not viewed as enterprises, they miss out on the host of supports our Government provides to Irish enterprise – particularly supports for SMEs (Small and Medium Enterprises).

Small and Medium Enterprises

What is it about community and voluntary groups that makes people think they are not SMEs? They are not usually, by corporate standards, large. They are medium-sized, or they are small. That leaves ‘enterprise.’ Defined as ‘bold resourcefulness’ in the Oxford English Dictionary, no term could more fittingly describe these organisations that undertake daunting missions – often understaffed and working on shoestring budgets – for the benefit of all of us.

The only imaginable distinction, then, is ‘profit.’ But so-called ‘non-profits’ are, in many ways, very profitable indeed to Irish society, including from the perspective of employment. According to the Centre for Nonprofit Management in the Business School in  Trinity College, the over 24,000 ‘nonprofit’ organisations in Ireland employ over 63,000 full- and parttime workers, and contribute more than €2.5 billion to our economy. How’s that for ‘profit?’

And over two million people – two-thirds of Irish adults – engage annually in the social, cultural and humanitarian enterprises offered by the sector. How’s that for ‘mainstream?’

Community and voluntary sector groups daily face the same business challenges as those faced by profitmaking SMEs, such as managing product and service design and delivery, ensuring customer/client satisfaction, managing financial and human resources, marketing products and services, managing complex stakeholder networks and public relations.

SME Supports

Ireland provides, by any international standard, excellent supports for profit-making SMEs. In addition to cash grants and tax relief, the State provides research and development supports, training and organisational development, and many other supports – think of the programmes operated by the IDA, Enterprise Ireland and the County Enterprise Boards or the training programmes tailored for business such as Skillnets.

These supports have contributed in no small way to enabling Irish business to compete internationally and play its part in contributing to the building of a strong Irish economy. Excluding an entire sector from such supports is inarguably unfair.

It is also beginning to change. Like all employers, those in our sector have always contributed to the National Training Fund, but without receiving any support back from the fund. However, in 2004, an initial – and temporary – change was made in this policy when funding was provided from the National Training Fund to The Wheel to explore and develop the Sector Skills suite of training programmes. As readers of Le Chéile will be aware, the Sector Skills pilot programme, which ended in 2007, was extremely successful. As a result of this, I am very pleased to announce that the full programme has been funded for a further rollout for 2008. We acknowledge the significant development in the thinking within the Department of Enterprise, Trade and Employment, which has made this possible and we in The Wheel see this as a very positive step for our sector. More information about this exciting development will be published in future editions of Le Chéile.

It’s a good start. But the Irish Government remains a long way from mainstreaming support for community and voluntary enterprises, which deserve, finally, to be counted among the many valuable SMEs that are the backbone of our economy.

Deirdre Garvey, chief executive officer

This article is taken from the March 2008 edition of Le Cheile , which is available for download here.