There seems to be so much hype surrounding social enterprise at the moment. But why? It’s not as if making money and helping people at the same time is a new concept. The answer is that we are seeing for the first time just how profitable doing good can be. In some cases, maybe even more so than traditional profit-making models. And this is prompting the need to define social enterprise and provide more clarity about how it works. Questions like “What is a social enterprise?” and “What is a social business?” are coming up more and more. And even more relevant “what are the differences between charity, social enterprise, social business and profit-oriented businesses?”.
A breakdown through examples is helpful.
We all know about charities, right. They are organisations designed to generate money to help people and animals in need. Or alternatively to provide a solution to a social or environmental problem. But what is less well known is that the financial data is staggering, with charities in the UK generating billions of pounds successfully. According to Thirdsector UK, Cancer Research UK finished top of the list for fundraising income by a significant margin in 2016 and in their 2015/2016 annual report, they were reported to have generated and invested over 85 million pounds since 2005.
And social enterprise is also a profitable but uncomplicated concept. Social enterprises have commercial and social goals but their focus is on making a positive social impact. Profits from social enterprise can be reinvested in the community or the company. It is one of the largest growing profit-generating business models on a global scale. In the 2016 UK Social Enterprise Awards, the Welsh based cooperative Dulas won Social Enterprise of the Year Award. It’s mission to deliver renewable “green” energy solutions to business, property owners and charity organisations. Dulas does business from Austria to Zambia, which just goes to show how global, social enterprises can truly be. And it also shows how social enterprises do business in all kinds of sectors.
What is more complicated to show is the difference between a social business and social enterprise. An easy way to contrast the two models is to say that social enterprises and social businesses both focus on profits and social impacts. But social enterprises are more focused on social impact and social businesses are more focused on profits. So then you might say that companies like Green and Black’s or Ben and Jerry’s are social businesses.
In an interview with the BBC, the director of campaigns at Social Enterprise UK, Celia Richardson said that hard economic times are the reason for the success of social enterprises. She said:
“They see opportunities in market failure, so these are the perfect conditions for the social enterprise sector.”
“It’s a win-win situation because we’re looking for sustainable growth. Social enterprises spot the social problem and the social opportunity first but they use business methods and create wealth to solve them.”
Social entrepreneurs want to make money like anyone else. But they dare to think outside of the box and find a way to help others whilst helping themselves. It was Robert F Kennedy who said “There are those that look at things the way they are, and ask why? I dream of things that never were, and ask why not?”
This is a typical social entrepreneurial attitude. The only difference is, successful social entrepreneurs dream and then after that they strategically plan, successfully utilize tools and implement steps to make their dreams come true whilst having a positive social impact.