Have you found yourself asking questions about social enterprise, and just getting blank stares?
Or trying to Google something about social enterprise, just to end up more confused than when you started?
Let's answer some of the most common questions about social enterprise.
1. What is a social enterprise?
Ok, if you're reading this, maybe you already know what a social enterprise is. But if you're new here, let me explain. A social enterprise is an organization that sells products or services in order to achieve its social purpose. I have a whole post about this topic - check it out here!
2. How do I know if my organization or business is a social enterprise? Based on the definition above, there are a couple of key phrases we can pull out, to help us determine if your organization or business is a social enterprise.
"Sells products or services" = sells a tangible good or delivers a service for a fee.
"Social purpose" = nonprofit with tax-exempt status for social purpose OR business with social purpose declared in Articles of Incorporation, in directors decision-making, and included in regular reporting.
If your organization sells a product or service and has a social purpose - BOOM - that's a social enterprise.
A social enterprise can be "social" by:
Sharing: Organizations that exist to share some or all of their profits with charitable organizations or causes.
Selling: Organizations that make their impact through what they sell or to whom they sell it.
Sourcing: Organizations that develop their programs by how they make their products or services, typically using environmentally sustainable methods.
Staffing: Organizations that employ underserved communities, for example individuals with disabilities or individuals who are/were homeless.
3. Can a social enterprise be a nonprofit? Can a social enterprise be a for-profit? Is a social enterprise both nonprofit and for-profit?
Yes! Ok next question... Kidding. But yeah, a social enterprise can be a nonprofit, for-profit, or can be any kind of combination of these two. Women's Bean Project is a 501c3 nonprofit. Fair Anita is a Benefit Corporation (for-profit). CityKid Java is an LLC wholly-owned by a 501c3 nonprofit Urban Ventures. All of these are considered social enterprises, because they 1) sell a product or service and 2) have a social purpose they are trying to achieve.
In the nonprofit sector, we call a social enterprise a COMMERCIAL NONPROFIT.
In the business sector, we call a social enterprise a SOCIAL BUSINESS.
4. How many social enterprises exist in the world? No one knows! Because the definition of a social enterprise is vague, flexible and just beginning to gain consensus (which is all fine in a newly shaping sector), it's been hard to exactly count how many social enterprises there are in the world. However, more developed social enterprise ecosystems like the United Kingdom have begun to count and measure these organizations. "Government statistics identify around 70,000 social enterprises in the UK, contributing £24 billion to the economy and employing nearly a million people." Source: Social Enterprise UK - The Future of Business - State of Social Enterprise Survey 2017 I've started a list of the social enterprises based in Minnesota. If I'm missing any, please let me know!
5. How is a social enterprise different than a regular for-profit business?
While both a social enterprise and regular for-profit business have a product or service they are selling, social enterprise has a social/environmental purpose or mission they are also trying to achieve.
6. What makes a social enterprise successful?
It's easy to measure how successful a for-profit business is, right? Look at the bottom line and see if it's positive or negative. Are you making money or not? Pretty easy to measure. But measuring success in a social enterprise is more difficult. In addition to positive financial performance, there are a few ways to look at mission success:
IMPACT MEASUREMENT / FEEDBACK SURVEYS: Some social enterprises measure their impact by asking the participants, or people impacted by the social enterprise's programs, about their experience. This could look like pre- and post- feedback surveys to measure changes in behavior, satisfaction, outlook about the future, etc. Social enterprises that have a workforce development or training component may measure impact by contacting past participants at 30, 60, 90 and 365 days after leaving the program, to find out their employment status, earnings, or other key metrics.
MACRO-LEVEL MEASUREMENT / GLOBAL GOALS FOR SUSTAINABLE DEVELOPMENT: A social enterprise can also measure their success by showing their impact alongside other similar organizations, to create large-scale change. This could look like a group of social enterprises in your geographic region sharing information about progress toward one of the Global Goals for Sustainable Development.
7. This all sounds super freakin' cool. How can I be involved in social enterprise?
Buy from social enterprises. Spend your money with businesses that treat people and the environment well. Look for third-party certifications like B Corp, Fair Trade, 1% for the Planet and others, that show you the company has values in line with their operations. But not every social enterprise will have these certifications - so do your research.
Volunteer at a social enterprise. Many social enterprises are nonprofit organizations and are looking for help from volunteers to supplement their workforce. If you have expertise or even just moderate knowledge in an area, or can lend an extra set of hands to help out, you may be able to volunteer with a social enterprise in your community. Check out Volunteer Match for volunteer opportunities in your area.
Develop socially-minded practices at your own company. Alright - not every business in the world is going to drop everything and become a social enterprise, as much as I would like that. But, you can start now, where ever you are. No matter what role you're in or company you're at, you can find a way to incorporate socially-minded practices into your own work. What do I mean by socially-minded practices? Think about the ways your current job impacts customers, suppliers, the supply chain, the environment... are there small changes you could make to your own job that would treat people better (pay a living wage, improve their quality of life, more fulfilling work, safer working conditions, opportunities for skill development and advancement) and improve the environment (less waste, more efficient logistics routes, more recycling, buying locally, environmentally-friendly raw materials)? Take a minute to think about that. I bet there's one small change you could make to what you're doing right now.
Get a job at a social enterprise. Many social enterprises are in the start-up phase of business growth, meaning, jobs are somewhat few and far between. But, there are social enterprise jobs out there. Get the Ultimate Social Enterprise Job Search Guide here, with a download to organize your social enterprise job search.
Tell three people about social enterprise. Even though social enterprises have been around for over 100+ years (shoutout, Goodwill!), it's still a fairly new concept to most people. Tell three friends or family members about what you learned from this post.