By running a successful restaurant business, the Shoreditch Trust charity can maintain a steady income, writes Fiona Reddan

IN 2002, TV chef Jamie Oliver first brought the concept of a restaurant built on the tenets of social enterprise to the masses, through a television series and the subsequent opening of Fifteen restaurant.

Six years on, the concept, which had the dual aim of creating a top-class restaurant while at the same time giving disadvantaged youths the chance to gain professional training, has expanded to Cornwall, Amsterdam and Melbourne and has influenced other socially- minded restaurateurs.

One of the more successful proponents of this ethos has been the Shoreditch Trust.

The trust was created in 2000 following the launch of the UK government's New Deal for Communities, which allocated £2 billion (€2.51 billion) in public money to revive inner cities in 39 deprived areas. Shoreditch, which is part of the London borough of Hackney and has an unemployment rate double that of the greater London average, received £59.4 million to be spent on a range of programmes between 2000 and 2010.

Michael Pyner, who will be speaking in Galway on May 20th as part of the Venture Advancement Summer Seminar Series, was hired to establish the trust.

He was clear from the start that he did not want to go down the traditional route of simply subsidising projects. "There have been so many regeneration programmes internationally, where the money comes in, it is spent, and one then wonders what the impact really is."

Instead, he started to look at how the trust could spend the money in sustained activity that would last longer than 2010.

Initially, Pyner concentrated on buying property in the area and soon built up an asset base of some £11-13 million. However, the return the property was making was not enough, so he began thinking of social enterprise.

Social enterprises are driven by a social purpose and seek to deliver a "triple bottom line" based on financial, social and environmental performance targets.

The opportunity to go down this road soon presented itself when Pyner was approached three years ago by the HIV charity, the Terence Higgins Trust, to open a restaurant at a site it owned in King's Cross, London. Having never set up a restaurant, Pyner got in touch with Arthur Potts Dawson and Jamie Grainger-Smith, both of whom had helped Oliver establish Fifteen restaurant.

In November 2006, the trust's first restaurant, Acorn House, was born, based on an ethos of creating an ecologically sound, sustainable restaurant with seasonal menus and training opportunities along the lines of those offered at Fifteen. The trust invested £300,000 in the project, in return for a 99 per cent stake in the restaurant and a 48 per cent share of profits. By the first quarter of 2008 the restaurant had made its first operating profit and, in the 18 months since it has been open, it has turned over £1.4 million.

Buoyed by this success, earlier this year the trust opened its second restaurant, Water House, in Shoreditch. Next year, it will open Fire House in Amble, northern England, and another restaurant soon after in Derry.

Such geographical diversity is important for Pyner, who has already turned down 14 requests to set up restaurants for the trust in London. "We don't want to be a London-centric operation, particularly if we head into a recession."

He adds: "We're a charity so we're constituted in such a way that however and wherever we make money, this money has to be ploughed back into the community in Shoreditch. It frees us up to look for opportunities that are broader than just those offered here."

Pyner expects that, when the UK government's £59.4 million is finally spent next year, the trust should have an asset base worth about £15 million and eight to 10 social enterprises providing an annual income of between £1 million and £1.5 million, which will fund the trust's 260 projects.

Pyner believes social enterprise is the way forward as it gives people an opportunity to drive their own agenda and demonstrates that communities have a role to play. It also marks a significant change in how charities are traditionally perceived.

"Before, if you were in the voluntary sector, you were grant driven, and every time 30p dropped on the table you were scrambling for it. But now I think there's a maturity in the sector that's saying, if you can run a business, it doesn't have to be loss making and doesn't have to be of low quality. Charity-driven business can be commercially hard nosed and make money."

Of Irish origin, Pyner lived in Dublin for two years in the 1990s and, while he thinks the restaurant market is saturated at present, he does not rule out bringing his concept over in the future.