Social enterprises use business principles to achieve social good and seek to make a positive change in the world.
There is no universally agreed upon definition for social enterprises, but the main thing is they focus on making social impact as much as making money. They tackle societal problems, improve opportunities for disadvantaged people and strengthen communities. They differentiate themselves from charities and traditional non-profits by building in financial sustainability meaning they are not reliant on grants and continued funding. They come in a huge variety of shapes and sizes with some looking like small local charities and others looking like large commercially-minded organisations, but a good rule of thumb is they show these characteristics:
Some examples of social enterprises include:
Social enterprises can also be known as 'social economy enterprises', 'social businesses',
'social-purpose businesses', 'social ventures', 'purpose-driven businesses' and 'mission-driven businesses'.
It should be clear who social enterprises help and these stakeholders, often called beneficiaries, and typically fall into these groups:
Due to their variety, there is generally no one-size-fits-all legal structure for social enterprises; they typically span the spectrum from limited companies through to non-profits, and sometimes one entity can have multiple legal forms. Being transparent and accountable means that their governance is typically 'flatter' (fewer management layers) and more democratic than other enterprises. It is therefore far more common to see them take the form of co-operatives, mutual organisations or community interest companies.
For more views, definitions and information:
- European Commission: Social Enterprises
- Social Enterpise UK: FAQs
- Social Enterprise Alliance: Social Enterprise
- British Council: Social Enterprise
- The voluntary code of practice ('The Code') for social enterprises in Scotland
- The Grameen Creative Lab: The Social Business Concept and 7 principles of Social Business
- BC Centre for Enterprise: What is social enterprise?
- Social Enterprise Mark: Eligibility Mark
- Yunus Centre: Social Business