What is Social Enterprise?
Check out Adrian's interview on Biz 1on1 here.
If you’ve spent time researching the subject, you’d be forgiven for thinking there’s no set definition of social enterprise. The internet is populated with a range of opinions and for the most part, the definition largely depends on who you ask.
It’s important to note that social enterprise as a concept is not solely relegated to for-profits (which are primarily driven by profits, market share, and increasing organizational value) or non-profits (which are primarily driven by mission and resourced through traditional fundraising). It’s also important to note that since social enterprise is a relatively new concept, it is still developing and adapting to modern business models, which themselves are constantly shifting to adapt to the economy.
Confused? Don’t be. It’s a lot more straightforward than you think.
In our view, social enterprise simply means “to use business methodology to accomplish a public good”. We strongly feel that the use of time-tested business practices often has a greater impact in achieving altruistic goals than traditional charitable means.
Under the traditional fundraising model, constantly appealing for resources takes a lot of an organization’s managerial time and organizational resources. With social enterprise, this is instead used to provide services. For perspective, consider the process traditional non-profits have to go through on a daily basis to keep the lights on. They have to devote their staff’s time and energy to look for grants, write grant proposals, organize special events, run fundraising campaigns, pay the fundraising staff’s often expensive salaries, do donor recognition, write reports for funders, then spend time looking after funder relationships. To do all of this effectively, an organization must devote massive amounts of management and staff time while exhausting resources better used for providing services.
This is the downfall of the traditional model. None of the money they receive is guaranteed or lasts very long, special events can fail, grants don’t always come through, economic disruption can severely impact fundraising. Any number of factors can put the model out of flux, and once one issue affects operations, the rest of the organization proceeds to be affected. Even when they receive money, it is for very short term or episodic projects that have a beginning, middle, and end. When a fundraising campaign doesn’t live up to expectations, reductions in staff, service, or both unfortunately often follow.
How can a non-profit effectively plan under such tenuous circumstances? How can they guarantee employment or services to society’s most vulnerable? And most importantly, how can they stand out among the multitude of non-profits competing for donations and attention in an increasingly uncertain economy?
The solution more and more organizations are turning to is social enterprise.
By Adrian Bohach
Adrian Bohach will be discussing how to create real change using Social Enterprise on Biz 1 on 1, airing this Saturday, February 4th, at 5:30pm MT. Please check it out on Bloomberg TV Canada or at: http://www.biz1on1.tv/