Social Enterprise

“Social Enterprise”

Defining Social Enterprise

  • A social enterprise is a business that has specific social objectives that serve its primary purpose.
  • These organisations aim to maximise social and environmental good, often reinvesting a significant proportion of their profits back into benefitting society.
  • While they generate income like other businesses, their main goal is to promote, encourage, and make social change.

The Distinction from Traditional Businesses

  • Unlike traditional businesses, social enterprises have a “double bottom line”– they consider both economic and social outcomes.
  • A social enterprise’s success is not just measured by profit, but also by the positive impact it makes on society, the environment and local economy.
  • The principle of social enterprises is to provide goods and services in an ethical manner, often targeting under-served or disadvantaged communities.

Types of Social Enterprises

  • There are various models of social enterprises including cooperatives, social firms, mutual organisations, and community interest companies.
  • Social enterprises can exist in nearly any industry, from healthcare to education, and from environmental conservation to community development.
  • Some social enterprises are structured as non-profit entities, while others operate like traditional for-profit businesses, but with major differences in values and goals.

Funding Social Enterprises

  • Funding for social enterprises can come from a variety of sources, such as grants, loans, investment, and revenue from sales of goods or services.
  • Many also gain funds through partnerships with other companies, crowdfunding, or through government funding programmes specifically tailored towards social enterprise.
  • The challenge for a social enterprise is to balance the need for financial sustainability with the drive to deliver social or environmental goals.

Role in Society and Economy

  • By addressing social issues, social enterprises play a significant role in society and the economy.
  • They often focus on providing services and jobs to disadvantaged individuals and/or revitalising downtrodden communities.
  • By doing so, social enterprises promote inclusive economic growth, reduce inequality, and contribute to sustainable development.