What is a social enterprise?

Social enterprises use a commercial model for the primary purpose of having a positive social and/or environmental impact. Their mission is embedded within their business activities and processes. The high level of integration between a social enterprise's activities and mission distinguishes it, for example, from a business that adopts a code of ethics or one that uses corporate giving to achieve positive outcomes after generating profits from an unrelated activity. Social enterprises aim to be financially self-supporting, distinguishing them from a charity, but (for the most part) any trade profits are re-invested for increased social and environmental impact.

Why support a social enterprise?

Those who initiate, invest, or otherwise participate in social enterprises often value:

  • Earning their livelihood through the direct pursuit of social and environmental purposes
  • Achieving positive community impacts without becoming dependent on outside funding
  • Drawing on commercial approaches to innovation, creativity, and flexibility for not-for-profit purposes

If you are more highly motivated by the collective good than by private profit, and if you enjoy the independence and challenges of the business sector, then you might find that a social enterprise is just right for getting the job done.

How does a social enterprise work?

Social enterprises have many models, depending on which parts of their commercial activities are most closely tied to their mission.

  • They may meet their aims by providing employment and training to a target group for social justice purposes (a cafe that employs people who are homeless).
  • They may increase access to a socially or environmentally valuable service they deliver (a mobile environmental education service).
  • They may involve a joint venture where they generate ethical profits that are wholly repurposed to supporting a charity's purposes (a charity op shop).
  • They may do a combination of the above.

Where can I go to learn more?

  • The Ākina Foundation, a New Zealand government partner in the development of social enterprise providing training, information, and advisory services
  • The LE Store, including How Communities Heal by Vivian Hutchinson and Companies We Keep by John Abrams
  • The Charities Service for its expectations of social enterprises that seek charities registration
  • Contact the LE team for more support

Living Economies Educational Trust (LE) promotes exchange systems and investment models that build community strength and well-being, offer interest-free alternatives to 'business as usual', and respect both people and our living planet. Our network of volunteers can recommend resources and provide educational support for community initiatives. LE (CC 38114) is a registered educational charity, and we do not provide financial or legal advice.

© 2018 Living Economies