I couldn't have been the only person listening to Ronnie Cohen last week - in the flesh or online - who thought 'Yes but what you are describing isn't a truly sustainable model'. He mentioned with regard to capital funding for the third sector Say's Law which could be stated as 'provide the capital and the sector will grow'. In other words fetters on access to financing are a chief problem, a version of 'the banks aren't lending' for the social enterprise sector - actually much older than either the badge social enterprise or indeed the badge Big Society. The reason I raise the Discussion topic is that Cohen's examples seemed simplistic. Maybe I didn't understand him correctly but he appeared to say that third sector organisations could be given incentives for performance - dealing with the habitual offender for example. Investment to grow this kind of business would help it grow faster in the future and fees earned would also be ploughed back - creating a virtuous circle of development. And he also went on to describe in a rather hazy way a social enterprise buying and renting out housing stock, encouraging tenants into employment and growing the rent roll - sounds like a Housing Association? And all I would observe is that a) the work with recidivists appears not to have a market income source but a public sector one and b) the property development model based on my own experience of property development is that the residential sector (at RSL rates) does not generate a proper business model - we've only been able to make it work on the Heartlands project by using grants and zero interest loans.
In my experience of starting and running social enterprises they really only work well with a mixed income base - trading, services, memberships and possibly manufacturing. They have to have developable assets like land and buildings, strong social capital networks, proper financial systems, strong Boards and good staff. Only when these things are either in place or capable of growth can they properly benefit from capital support.
If anyone want to debate this further then please reply.