Social enterprises are businesses whose primary purpose is the common good. They use the methods and disciplines of business and the power of the marketplace to advance their social, environmental and human justice agendas.
Three characteristics distinguish a social enterprise from other types of businesses, nonprofits and government agencies:
- It directly addresses an intractable social need and serves the common good, either through its products and services or through the number of disadvantaged people it employs.
- Its commercial activity is a strong revenue driver, whether a significant earned income stream within a nonprofit’s mixed revenue portfolio, or a for profit enterprise.
- The common good is its primary purpose, literally “baked into” the organization’s DNA, and trumping all others.
In its early days, the social enterprise movement was identified mainly with nonprofits that used business models and earned income strategies to pursue their mission. Today, it also encompasses for-profits whose driving purpose is social. Mission is primary and fundamental; organizational form is a strategic question of what will best advance the social mission.
The social needs addressed by social enterprises are as diverse as human ingenuity. In our 2009 Field Study, the top five mission foci of social enterprises were workforce development, housing, community and economic development, education, and heath.
Social enterprise business models are equally diverse, including: retail, service and manufacturing businesses; contracted providers of social and human services; fee-based consulting and research services; community development and financing operations; food service and catering operations; arts organizations; and even technology enterprises. Chances are you already do business with social enterprises without even knowing it.
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