Social Enterprise in the Balance, based on a study conducted by the Charities Aid Foundation and Manchester University, concludes that there is clear potential among voluntary and community groups to develop social enterprise as a source of sustainable income. But the study also says that funders and investors often have unrealistic expectations of the risks and returns, and that many groups encounter gaps in funding at critical stages of their development. Groups face further tension in balancing the commercial and social aims.

"The voluntary sector is uniquely placed to support local, social and economic growth," says Cathy Pharoah, director of research at CAF."What is needed now is a clearer understanding by policy makers, funders and investors, of the challenges these groups face, in delivering their own, unique brand of social enterprise."