Social enterprise is, fundamentally, about using a market-driven business model to address key social and environmental issues. It is an emerging field with diverse and shifting interpretations. On this page, we’ll try to sort through all this, introduce you to the major players, and give you a launching pad for future inquiries. For guidelines to plan and establish a social enterprise, see the book Venture Forth! Essential Guide to Starting a Moneymaking Business in Your Nonprofit Organization.
Sections of This Topic Include
- What Social Enterprise Is (and Is Not)
- Leading Examples of Social Enterprise
- Why Social Enterprise Matters
- Related (but Different) Fields and Topics
- Resources for Doing Social Enterprise
- Get Connected: Social Enterprise Networking and Learning Opportunities
Preparation for Starting an Organization
What Social Enterprise Is
Social enterprise is, fundamentally, about using a market-driven business model to address critical social and environmental issues. See Social Enterprise. Many people believe that a fundamental element of social enterprise – indeed, the “social” in social enterprise – is collective ownership. Some go so far as to stipulate a nonprofit legal structure for a social enterprise. For example, see What Are the Legal Structures for Social Enterprises? by Social Enterprise UK.
Until we come up with a broader term than “social enterprise”, some would advocate for a broad interpretation that does not limit it to collectively-owned businesses. If the overarching purpose of the business is to address a social and/or environmental issue, it’s a social enterprise – regardless of its ownership structure. This is a pragmatic position — the world’s problems are far too great to be creating arbitrary silos that limit participation and sharing.
What Social Enterprise Is Not
Social enterprise is not about balancing the “double bottom lines” of profit and social impact, as though they are equally important. The real bottom line for a social enterprise, the goal by which its success should ultimately be evaluated, is its social (or environmental) impact, and being profitable (or at least financially sustainable) is the entirely necessary means to that end. Of course, there can be no social mission without money, but the first goal is mission.
Social enterprise is not the exclusive domain of nonprofits – See “What Social Enterprise Is” above. While nonprofits have been – and continue to be – leaders in the social enterprise movement, social enterprise need not be limited to nonprofits. Moreover, simply being owned by a nonprofit is not sufficient to make a business a social enterprise. The enterprise must have as its overarching purpose the amelioration of social and/or environmental issues.
Social enterprise is not just another fundraising strategy for nonprofits – While it’s possible for a social enterprise that is owned by a nonprofit to generate funds to support the operation of that nonprofit, the generation of those funds is secondary to the direct impact it has on social or environmental issues. If generating funds is your biggest priority, check out the fundraising topic in this Library.
Social enterprise is not about “saving” the nonprofit sector – While social enterprise has great potential for enhancing the vitality and sustainability of the nonprofit sector, that potential impact is secondary to its real purpose – helping (directly, through the operation of the business) to make the world a better place.
Some Additional Perspectives on Social Enterprise
- Social Enterprise – Wikipedia
- Structure is Irrelevant
- Social Enterprise: A Portrait of the Field
- 7 Sins of Social Enterprise
- Why Social Entrepreneurship?
- Social Entrepreneurs’ Tricky Issues of Sustainability and Scale
- Hybrid Corporations: What Business Are You In?
- Do Unions Help (or Hinder) Social Enterprise?
- Understanding Fee-for-Service Models
- “Social” alternatives to Groupon
- Low/no profit is not a virtue
- Are Mergers Good for Social Enterprises?
- New! Social Enterprise Shopping Guide
- What Is NOT a Social Enterprise
- Social Enterprise: A Lawyer’s Perspective
- Case Study: Local Food & Sustainable Agricultural Initiatives in the United States
- State of Social Enterprise: 2012
- Public Administration and the Impact Economy
- Social Benefit Analysis & Social Return – An Introductory Reader
- Do Social Enterprises Need Mobile Strategies?
A Few Great Individual Examples
Social enterprise comes in all shapes and sizes and can be found all over the world. Here are a few examples:
Social Enterprise Directories
Social enterprise matters because it is focused on making positive change at a time when we desperately need it. Social enterprise is one important tool, among many, that is actively and directly making our world a better place.
Social enterprise is more responsive. Social enterprise doesn’t rely on the shifting priorities of government and major foundations; it gets on with making the change that is needed within a community and (sometimes) grows to affect whole cities, countries, and regions.
Social enterprise is scalable. Like all businesses, social enterprise has, with investment and sales revenue, the ability to grow to meet the needs and priorities of the communities it serves, as opposed to traditional nonprofit programs, which are often limited to the funds available from government and philanthropic funders.
Social enterprise actively engages stakeholders. Social enterprise gives the people it helps a direct voice in the operation of the business – as owners, employees, and paying customers.
Additional Perspectives on Why Social Enterprise Matters
- Why Social Enterprise Matters
- A Level Long Enough to Change the World
- 5 Reasons Why Social Enterprise Matters
Benefits of Social Enterprise: Earned-Income Generation
In “Rediscovering Social Innovation” (Fall 2008 issue of the Stanford Social Innovation Review), social innovation is defined as “a novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals.” So defined, social innovation is a bigger concept than social enterprise, which is not limited to enterprise-based approaches to addressing critical issues. Put another way, social enterprise can be a vehicle for social innovation.
Also, see Dimensions of Social Innovation.
Ashoka defines social entrepreneurship as “individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change. Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps.” So defined, social entrepreneurship is concerned with the entrepreneurs who undertake large-scale social innovation – which may or may not involve a social enterprise. See “What is a Social Entrepreneur” for a list of people who meet Ashoka’s definition.
The Grameen Bank is a great example of a social enterprise, led by social entrepreneur Muhammad
Yunus popularized the social innovation of microcredit. Also, see Promise (and Problems) with Microcredit.
Corporate Social Responsibility
CSR is, for many, about maximizing shareholder value in a way that minimizes negative social or environmental impacts. To the extent that this is the case, profit is the first goal, and minimizing harm (not making things better) is the secondary goal. CSR is way better than business as usual, but it’s not a social enterprise. See the Business Ethics topic for more information.
Social enterprises face unique challenges, on top of all the other challenges that any business must contend with. In this section, we focus on presenting resources that address the unique challenges. In later versions of this page, we may add the general resources – keep an eye out for that.
Becoming a Social Entrepreneur
- Social Enterprise Toolkit
- What is a Social Entrepreneur?
- 25 Entrepreneurial Death Trap
- Want Scale? Get Attitude
Starting an Enterprise
- Incubating a Nonprofit Social Enterprise
- Social Franchises Mostly Fail
- Students Create Social Enterprises
- Finding Good Venture Ideas (part 1)
- Finding Good Venture Ideas (part 2)
- Finding Good Venture Ideas (Part 3)
Market Research — Inbound Marketing
Human Resources Planning
Financial Analysis and Management
- Feasibility Testing — Do Just Enough
- Feasibility Testing — A Lost Art
- Feasibility Testing — Top 10 tips
Financing and Taxes
- Social Venture Partners International
- Venture Philanthropy — the Changing Landscape
- High-Engagement Philanthropy: A Bridge to a More Effective Social Sector
- Social Capital Markets
- Life Cycle Financing Options
- Evaluating Outcomes and Impacts of Social Enterprises Run by RDEF’s Portfolio Organizations
- A critical evaluation of social impact assessment methodologies and a call to measure economic and social impact holistically through the External Rate of Return platform
Organizations and Networks
- Ashoka – Innovators for the Public
- Center for the Advancement of Social Entrepreneurship
- Enterprising Nonprofits Fund
- Initiative on Social Enterprise at Harvard Business School
- Nonprofit Enterprise and Self-sustainability Team
- Social Enterprise World Forum
- Roberts Enterprise Development Fund
- School for Social Entrepreneurs
- Social Capital Partners
- Social Enterprise Alliance
- Social Enterprise Coalition (UK)
- Social Enterprise Council of Canada
- Social Ventures Australia
- Social Venture Network
- Social Venture Partners International
- Social Enterprise Goes to Graduate School
- New! Sales Strategy for Rhode Island Social Enterprises
- Social Enterprise Summit, Chicago, 10/30-11/2
- Directory of Social Enterprise Directories
- New! Global Social Enterprise Dining Map
- New Social Enterprise app
- Social Enterprise Magazine
- Stanford Social Innovation Review
- Book Review: Succeeding at Social Enterprise
- SE: Empowering Mission-Driven Entrepreneurs (Marc Lane)
Social Enterprise Alliance. North American membership association offers many resources, some available to all, others members only.
REDF. San Francisco-based funder that’s probably started and supported more successful social enterprises than anyone else. Web site chock full of practical advice.
Community Wealth Ventures. Washington DC consulting firm founded by Bill Shore; resources include SE database, franchising report, L3C report, and more.
Social Enterprise World Forum. Free, global, 7000+ subscriber listserv focused exclusively on social enterprise. Post a question and you’ll likely get five answers in days.
Rolfe Larson Associates*. Denver consulting firm with a Free Resources section with practical worksheets and templates on starting an SE.
Wikipedia. Nowadays every research project has to include Wikipedia, although in this case, it is a bit sparse on practicality.
Aperio in Toronto offers some good articles and case studies.
Continue to Learn in the Library’s Social Enterprise Blog
The blog is hosted by an expert in social enterprise who writes two posts per week, including from guest writers. Learn from those posts — even consider writing an article yourself!
Social Enterprise Blog
Learn More in the Library’s Blogs Related to Social Enterprise
In addition to the articles on this current page, also see the following blogs that have posts related to Social Enterprise. Scan down the blog’s page to see various posts. Also, see the section “Recent Blog Posts” in the sidebar of the blog or click on “Next” near the bottom of a post in the blog. The blog also links to numerous free related resources.
- Library’s Business Planning Blog
- Library’s Marketing Blog
- Library’s Nonprofit Capacity Building Blog
- Library’s Social Enterprise Blog
Vast, Additional Resources in the Category of Social Entrepreneurship