What is the problem with the definition of social enterprise?
It’s not a secret. With regard to the definition of social enterprise, things can be confusing quickly.
For starters, let’s talk about a non-profit mega that has been around 100 years, like Goodwill? Or a new technological start-up selling a soccer ball alternating life that can generate energy for a whole rural village? What about coffee at the corner of the street that only trades equitably exchanged, coffee beans without pesticides and give profits to local charities?
The answer is: Yes, yes, and yes – a social enterprise can be all the above.
Two pieces necessary for the puzzle
There have been a lot of returns recently on the definition of a social enterprise. And rightly. For example, if non-profit organizations and for-profit companies can be called social enterprise, does it mean that any company with social value qualified? (No.) And that would not be underestimated what social change is all about and making the term without meaning? (Yes.)
The truth is, there are two pieces in the puzzle that must be in place for the label to be adapted.
Exhibit N ° 1: There is a social and / or environmental mission at the heart of what the organization or business does. The social impact is prioritized as much as the economic return – in fact, the resolution of social problems is the reason for the existence of this organization. This is the “why” of the company.
Exhibit 2: A service or product is sold to a profit to maintain the work and continue the social mission. This is the “how” of the company.
This delicate word “social” – and the dangers of social washing
Maybe you can now start to see what big problem is everything. Having a firm and flexible definition clearly indicates what the social enterprise is and leaves space for an amazing variety to grow.
The use of the word “social” contributes to some of the confusion. Imagine a non-profit goal that offers professional training for people with disabilities – but only on donations and grants. This non-profit goal definitively serving a social mission. But it’s not a social enterprise because there is no service or product sold at a price to maintain their efforts.
And what about traditional companies like the target giving 5% of the benefits to environmental or educational initiatives? Once again, we are all to see companies recognizing their social and environmental impact. But the target exists to be a great profitable box retailer. He wants to sell clothes, toys and fun tips of the dollar bins – not for the social impact, but to optimize the return of shareholders.
And that brings us to “who”.
Choose the correct business model for your social company
The definition of the social enterprise brings clarity on which it really benefits. The “WHO” of the social enterprise usually appears in one of the following ways:
Hiring practices – intentionally hiring people related to the social mission you find yourself.
Conscious Sourcing – Do you forget that this local corner coffee? It captures WHO by ensuring that its beans have been harvested by farmers with working conditions and fair compensation.
The current product or service – Repend to this football bullet. It is designed to enjoy families who need ready and reliable light to read, cook and play.
The benefit of benefits – the benefits of this product or service are shared with organizations, communities and people you like.
What is exciting is that these aspects refine the definition, but leave a lot of room for the way a social enterprise can organize and operate.
Towards a mission-oriented economy
The truth is that we care to define the social enterprise because we think it’s more than changing an organization. It’s about marrying what is the best social and environmental causes with what is the best business.
Support social enterprises is part of the transition from a market with only financial values to its heart to a market that creates social, environmental and economic benefits for all.