What is Social Enterprise?

by Rachel L. West, MSW, LMSW
SJS Staff Writer

Social enterprise (AKA social entrepreneurship) has become a buzz word in recent years.  There are some who think it is the wave of the future mixing the financial incentive of the for-profit sector with the social good of the non-profit world.  But what exactly is social enterprise?  The Social Enterprise Alliance defines it as the following:

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.

One example of a social enterprise is the New York based Hot Bread Kitchen.  Their mission is to provide training and opportunity for  foreign-born and low-income men and women to enter the specialty food industry.  They off set program cost by selling their specialty breads to the community.  Another social enterprise is TOMS shoes.  For every pair of shoes purchased TOMS donate a pair to a child in need.