Social enterprise

Social enterprise is a relatively new term for a type of business that has been in existence for at least a century.

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Briefly, social enterprises are organizations which trade in goods or services and link that trade to a social mission. The need to deliver on both financial and social performance targets is often referred to as having a double bottom line.

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It could be that the profit (or surplus) from the business is used to support related or unrelated social aims (as in a charity shop), or that the business itself accomplishes the social aim through its operation, say through the employment of people from a disadvantaged community.

Related Topics:
Profit - Surplus - Charity shop

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The term social enterprise relates to social entrepreneur, the name originally given to 19th century philanthropic businessmen and industrialists, who had genuine concern for the welfare of their employees. Today, its use varies in different regions. In Britain, the focus is on the use of the surplus as the defining characteristic. In North America, there is less emphasis on generating a surplus and more on the double bottom line nature of the enterprise. European usage tends to add the criterion of social rather than individual ownership.

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Social enterprises are generally held to comprise the more businesslike end of the spectrum of organisations that make up the third sector or social economy. A commonly-cited rule of thumb is that at least half their income is derived from trading rather than from subsidy or donations.

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