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  • Writer's pictureAlyssa K. Foust

What is Social Enterprise?

As the impact space has evolved, new terms and concepts have emerged to describe business organizations and their role in the world. Among these is the term “social enterprise.” Social enterprise is difficult to define because it means different things to different people. It spans the spectrum from nonprofit to for-profit entities and, as such, looks very different from organization to organization.

Social enterprise has been defined as “an organization or initiative that marries the social mission of a nonprofit or government program with the market-driven approach of a business”[1] and a “revenue-generating business with a twist.”[2] That “twist” being the added goal of creating a positive impact on society and/or the environment. Social enterprises are described as “organizations that address a basic unmet need or solve a social or environmental problem through a market-driven approach.”[3] Other definitions provide that social enterprises aim to maximize profits while simultaneously maximizing benefits to society and the environment,[4] where others identify the “cause” as the primary motivating factor.[5] While the various definitions are slightly nuanced, the underlying premise is the same – the use of business to benefit society or the environment.

In the end, social enterprise is a business model, i.e., a design for the successful operation of a business. For traditional nonprofits, social enterprise works to advance the social mission of the organization while establishing its ability to do so with financial stability.[6] New startups use social enterprise to incorporate social impact into the company’s culture from the outset so it is often the core of products, services, or operations. But even traditional, well-established businesses use social enterprise initiatives to incorporate social impact goals into their business operations as a means to prioritize social objectives alongside the traditional financial returns.[7]

Social enterprise is by no means a new concept or phenomenon, but it has been gaining traction in recent years due to the rise of impact investing and conscious consumerism. Social enterprises all over the world are tackling some of the biggest issues facing society today and they are doing so in radically different ways. Whether its by training and employing people who are typically excluded from the mainstream economy or by developing innovative products that directly address social or environmental challenges, social enterprises are creating not only economic value, but social and environmental value as well. That makes for a pretty impressive return on investment.

What does social enterprise mean to you and your organization?

Sources [1] Social Enterprise Alliance. (n.d.). What's the difference between social enterprises, B Corps and public benefit corporations?.,driven%20approach%20of%20a%20business [2] BC Centre for Social Enterprise. (n.d.). What is Social Enterprise?. [3] Social Enterprise Alliance. (n.d.). What is Social Enterprise?. [4] Barone, A. (2020, Feb. 3). What Is a Social Enterprise?.,used%20to%20fund%20social%20programs [5] The Good Trade. (n.d.). What Is a Social Enterprise? A Simple Definition & 3 Examples.,and%20serve%20the%20common%20good.%E2%80%9D [6] Social Enterprise Alliance. (n.d.). What is Social Enterprise?. [7] Social Enterprise Alliance. (n.d.). What is Social Enterprise?.

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