What is Social Enterprise?
The term “social enterprise” is used to describe an endeavor undertaken by a community to improve its social well-being. A social enterprise is any company that practices commercial approaches to improve the quality of life for members of the community. In other words, this means that a business or nonprofit organization is focused on building self-sufficiency. There are some businesses which claim to practice social enterprise, but many of them do not fit this definition.
What is social enterprise? In theory, a social enterprise gathers enough capital from private citizens in order to make a profit. Social enterprises are not usually profitable for the reason that the members of the community will not be able to reap the full benefits of their investment. Private businesses do not have to pay a significant amount of taxes to the government in order to make their profits.
Why should we call our public and private companies that work on social objectives? In order for social enterprises to operate profitably, they must set aside a portion of their profits in order to carry out their social mission. This is the portion that is commonly referred to as equity. This is also the reason why private companies do not need to give out their profits through dividends.
Private companies do not need to earn profits because their very existence does not depend on earning profits. There is no monetary exchange involved. What is social enterprise in essence then? It is a concept of business administration that recognizes that there are basic economic needs that are not met by the government or the private sector. This is why the government supports what is social enterprise by giving it some funding so that it can continue its mission.
Now, what is social enterprise in effect then if not a non-profit organization? The organization is created for the public good and it is an intermediary between the government and the private sector. In other words, it is an agency or a department that brings together the profit making aspect of the traditional business with the aspects of the non-profit and brings them into one. This brings together the profit motive and the social concern that is a fundamental part of what is social enterprise.
There are some basic ideas that drive the social enterprise concept. These include the idea of providing every individual with the opportunity to excel in whatever endeavor they choose; the idea of sharing profit and loss equally; the idea of allowing the opportunities provided by modern technology to provide new jobs for every corner of the community; and most importantly, the idea of providing a basic service for every individual and family. These services include care, education, healthcare, housing, food assistance, etc. The most important aspect of what is social enterprise is the fact that it provides a service that no one else can provide. In many cases this niche will be filled by an existing or new institution.
The examples of what is social enterprise also include the following. A non-profit agency might develop a website that provides basic information about animal rescue and what is being done to help animals in need. A church might develop a website that speaks more about their mission and what they are doing to serve the community. There are schools that have developed websites that speak more about the mission of the school itself as well as what services they provide. One thing to keep in mind is that these organizations are not always charities, but sometimes they are churches trying to raise money to meet other needs.
As you can see, the answer is not simple. It is important to remember that what is social enterprise isn’t always charity. Sometimes these organizations will claim that they are providing a service for a social need, but when you dig deeper, most of them will be providing services that address other people’s social needs, but at a very steep cost. This is why it is important to consider how social entrepreneurs actually create change rather than simply donating to charity.