What is a Social Enterprise?

Social enterprises are social mission driven organizations which apply market-based strategies to achieve a social purpose. The movement includes both non-profits that use business models to pursue their mission and for-profits whose primary purposes are social.

Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose remains central to their operation.

Rather than maximizing shareholder value, the main aim of social enterprises is to generate profit to further their social and or environmental goals. This can be accomplished through a variety of ways and depends on the structure of the social enterprise. The profit from a business could be used to support a social aim, such as funding the programming of a non-profit organization. Moreover, a business could accomplish its social aim through its operation by employing individuals from disadvantaged backgrounds or lending to micro-businesses that have difficulty in securing investment from mainstream lenders.

Examples

The better known examples of social entrepreneurship are Grameen Bank , a micro credit institution launched by Muhammad Yunus (Winner of the Nobel Prize in Peace, 2006), Jamie Oliver‘s Fifteen restaurants (disadvantaged youth training), John Lewis Partnership (a major UK-based worker co-operative retailer), d.light (solar power solutions for the developing world), RecycleBank (recycling), Aravind Eye Care System (health care), The Big Issue (a magazine helping homeless people).

In Lithuania, the social entrepreneurship concept is yet to be discovered, but a number of innovative projects already tackle social problems applying market-based strategies. The most prominent are the salad bar Mano Guru, Not a Shop (a charity store), Maisto Bankas (a food charity organization), aukok.lt (a donations portal) and a number of other initiatives.

Why do we need them?

Many non-profit organizations see social enterprise as a way to reduce their dependence on charitable donations and grants while others view the business itself as the vehicle for social change. Whether structured as nonprofits or for-profits, social enterprises are simply launched by social entrepreneurs who want to improve the common good and solve a social problem in a new, more lasting and effective way than traditional approaches.

Most 'social entrepreneurship' definitions contain one of more of the following concepts:

- Social entrepreneurship addresses social problems or needs that are unmet by private markets or governments;
- Social entrepreneurship is motivated primarily by social benefit;
- Social entrepreneurship generally works with - not against - market forces.