Social Enterprise: A definition
In its most basic form, a social enterprise is a business which places its social mission at the core of the operation. Instead of tending to the interests of the shareholder, a social enterprise aims to benefit and improve society, thereby aiming to satisfy the wider community instead of focusing solely on profits.
Businesses can be early-stage ventures or long-established companies that consider every aspect of their social and environmental impact. More important than discussing whether a company is structured as a charity, partnership, limited by shares, or a community interest company is to consider what they actually do, how they plan to grow their business, and how they bring about social or environmental change.
Whilst this type of company also focuses on profit since it needs it to pay employees and suppliers or fund its initiatives, it does so as part of a more encompassing approach to business, also known as the triple bottom line: people, profits and planet. A company can aim to deliver profit to its shareholders while advancing the happiness and success of its people, either customers, suppliers or employees and ensuring the planet’s welfare.
On the surface, many social enterprises appear to operate like traditional businesses. But when you engage in a deeper analysis of their methodology, there is one main characteristic that sets this type of company apart: their mission is at the centre of business and is its raison d’être with income generation playing an important supporting role. By shifting the focus away from profits, the social enterprise ensures all of its stakeholders — management, employees, suppliers, investors, community and other collaborators — are focused on its social mission, whether it’s about saving the environment, helping abused children and women or eradicating poverty, with the revenue stream becoming a means to achieve that end.
All businesses have an impact, and it falls under their remit to decide what kind of impact they can have. When great businesses are founded upon great principles, it is possible to do good while doing well in the more common financial sense of the expression — enterprise and investment can be immensely powerful forces for good.
The truly revolutionary aspect of a social enterprise is its prioritisation of the welfare of the many, or the least favoured, or the most abused depending on the cause it addresses, in lieu of the relentless pursuit of profit for the benefit of the few, an endeavour which has jeopardised our very existence as a species as our natural resources are depleted, our atmosphere is contaminated and our democratic processes are toppled in order to ensure that wealth stays in the hands of the powerful.
When ethical, environmental, human and social aspects of enterprise become so interwoven into the fabric of society that the term social enterprise will be rendered useless, we will have achieved the highest pinnacle of development at least in what business, entrepreneurship and governance are concerned.
This article was written as part of an ongoing collaboration with Volunteer Invest, a London-based social enterprise at the forefront of several organisations advancing human rights, child development, child therapy and HIV/AIDS treatment across the world.