Not all social enterprises look alike. While many people immediately think of nonprofits (or nongovernmental organizations, NGOs), in practice any type of business can be a social enterprise. As long as you “harness the power of the marketplace to solve critical social or environmental problem,” which to me means you sell stuff to customers as you pursue your larger social purpose, you’re in.
Regardless of whether you’re set up as a nonprofit, a for-profit, a hybrid like the new L3C in the US, or just an individual with an idea to change the world, funded — at least in part — by selling products or services, you’re a member of this special club.
Social enterprise is not just about finding the right business-like strategies, which, if applied correctly, will help create social impact. It’s also a movement, of tens of thousands of people and organizations around the world working on their own and working together to change the world, combining the best of the commercial and non-commercial sectors.
What makes this a movement is the shared vision for social change — how the world will be better if we succeed at our work; and the business models — how that work gets paid for, at least a big share of it, from entrepreneurial strategies.
Now, speaking of share, there’s no formula on what percentage of your income needs to be “earned” (as opposed to granted or donated) to be a social enterprise. But I tend to think the earned portion needs to be at least 25% to make some claim to the “enterprise” portion of the term. And while profitability is a good thing, and for for-profit social enterprises ultimately an essential thing, it’s not a requirement to qualify as a social enterprise.
So, for example, if you have a sustainable business model that relies on half of its revenue from earned income, and half from grants, I call that a successful social enterprise.
So regardless of your organization’s legal structure, or lack thereof, join us to talk about not just why we do this work, but how. It’s the how that will be the primary focus of this blog, but we won’t shy away from the why as well.
What are the challenges you’re facing with your social enterprise work?