Building Business. Enriching Lives.

What is a Social Enterprise?

Social Enterprises are “double-bottom-line” organizations; that is, organizations designed to earn a profit and fulfill a social mission.

A social enterprise is an organization with primarily social objectives and an overall mission to serve the public good. In addition to providing social programs and/or support services, a social enterprise will operate one or more profit enterprises to generate earned income.  Social Enterprise organizations reinvest their earned income into realizing their social mission; they pursue the development of the community rather than being driven by the need to maximize profit for shareholders and owners.

A growing number of charitable and not-for-profit community service organizations that have traditionally been dependent upon public donations and government grants to fund the costs of programs and services for vulnerable populations are stepping into the realm of business as a new source of revenue.

The revenue generated from business strategies permit a Social Enterprise to increase its sustainability by becoming more self-sufficient, improving organizational effectiveness and overall program quality, thereby ensuring its ability to meet its social mission.

“The rewards of social entrepreneurship can be considerable. Most organizational leaders following this approach hope to build higher-functioning, more sustainable organizations less dependent on a few mission-dictating funders.”

– Mark Pomerantz, Social Enterprise Magazine Online


 

Social Enterprises tackle a wide range of social and environmental issues and operate in all parts of the economy. Social Enterprises can be local community groups, regional and or national charities and business.

There are a few Social Enterprises that source the most of their revenues from profit enterprise or business ventures. For the majority of Social Enterprises business income is part of a diversified income stream that includes the grants, donations, and other forms of support.

Social Enterprise is being widely promoted in the United Kingdom.  The support and advancement of these organizations is a priority on the national government’s agenda. The Social Enterprise Unit within the Department of Trade and Industry was established in the fall of 2001.  The Government is pursuing an ambitious strategic plan intended to create an enabling environment, make social enterprise better business, and establish the value of social enterprise.

“Social Enterprises are dynamic, progressive businesses that we can all learn from. They experiment and innovate, and have the advantage of being able to draw upon the best practice in the voluntary sector, as well as the entrepreneurial flair that exists in the best of our companies.”

– Patricia Hewitt, Secretary of State for Trade and Industry, UK


 

The first conference of Social Enterprise agencies was held in the United States in November of 1998. Six nationally known advocates of social entrepreneurship convened a “gathering” in Colorado Springs of people interested in the field. Non-profit entrepreneurs, who previously had operated in isolation, came together for the first time to discuss best practices, share knowledge and advocate for a national non-profit social venture agenda. In November 2000 at the 3rd National Gathering in Seattle, a national membership association was officially launched. Since this time the movement of Social Enterprise has continued to flourish in the USA.

In Canada the recognition and promotion of social enterprise by the public, the government and key funding institutions is gaining momentum.  While there is a growing interest among community service agencies to improve their sustainability by stabilizing and increasing their revenue base, there remains the traditional divide between generating a profit through business activity and remaining dependent upon donations and grants to serve the public good that continues to be an operational tenet for a majority of private non-profit community agencies.

It is our hope that this perspective, that profit and the pursuit of social objectives are mutually exclusive objectives, will soon disappear within community service agencies in Canada, and that it will be replaced with the understanding that profit and social objectives can be mutually beneficial goals that will us to develop health communities.

“Our vision is bold: social enterprise offers radical new ways of operating for public benefit. By combining strong public service ethos with business acumen, we can open the possibility of entrepreneurial organizations - highly responsive to customers and with the freedom of the private sector – but which are driven by a commitment to public benefit rather than purely maximizing profits for shareholders."

Tony Blair, Prime Minister UK

It is our hope that Canadian leaders will follow in the footsteps of countries like the UK in seeking to support its service organizations to unlock the potential that social enterprise generates.