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    Their shared common thread is that they all operate to achieve a balanced financial, social and environmental set of objectives. Within the Trading Enterprises there are employee owned enterprises and membership owned enterprises. Financial Institutions Saving and Loans organisations such as credit unions, micro credit organisations, co-operative banks and revolving loan funds are membership owned social enterprises.

    Credit Unions were first established in the s in Germany and spread internationally. Co-operative Banks have likewise been around since the s, owned as a subsidiary of a membership co-operative. In recent times Microcredit organisations have sprung up in many developing countries to great effect. Local currency exchanges and social value exchanges are also being established.

    Community Organisations Many community organisations are registered social enterprises: These are membership organisations that usually exist for a specific purpose and trade commercially. All operate to re-invest profits into the community. There are village co-operatives in India and Pakistan that were established as far back as The profits are used to provide salaries for people who provide free services to specific groups of people or to further the social or environmental aims of the organisation.

    Origins[ edit ] The idea of a social enterprise as a distinct concept first developed in the late s in the UK as an alternative commercial organisational model to private businessesco-operatives and public enterprise. The concept, at that time, had five main principles [4] divided into 3 values and 2 paradigm shifts. The 2 paradigm shifts were: Originally, non-profit organizations relied on governmental and public support, but more recently[ when? However, market failure is emphasized[ by whom?

    Muhammad Yunus used the term referring to microfinance. His work in this[ which? Paulo Freire and critical traditions in research e. This intellectual foundation, however, does not extend as strongly into the field of social entrepreneurship, where there is more influence from writings on liberalism and entrepreneurship by Joseph Schumpeterin conjunction with the emerging fields of social innovationactor—network theory and complexity theory to explain its processes.

    Social enterprise unlike private enterprise is not taught exclusively in a business school context, as it is increasingly connected to the health sector and to public-service delivery. Publications[ edit ] The first international social-enterprise journal was established in by Social Enterprise London with support from the London Development Association.

    The Social Enterprise Journal has been followed by the Journal of Social Entrepreneurship, and coverage of issues pertaining to the social economy and social enterprise are also covered by the Journal of Co-operative Studies and by the Annals of Co-operative and Public Economics.

    The Skoll World Forum, organised jointly by Oxford and Duke universities, brings together researchers and practitioners from across the globe. Terminology[ edit ] The term 'social enterprise' has a mixed and contested heritage due to its philanthropic roots in the United States, and cooperative roots in the United Kingdom, European Union and Asia.

    In the US, the term is associated with 'doing charity by doing trade', rather than 'doing charity while doing trade'. In other countries, there is a much stronger emphasis on community organising and democratic control of capital and mutual principles, rather than philanthropy.

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    Muhammad Yunus, founder of the Grameen Bank, believes that a social enterprise should be modeled exclusively to achieve a social goal. Another view is that social enterprises should not be motivated by profit, rather profit motives should be secondary to the primary social goal.

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    According to this definition, the social enterprise's social mission is to help the disadvantaged, which is executed by directly providing goods or services not money. A third definition is purely based on how the organization is legally structured, or formed as a legal entity. In this context, a social enterprise is a legal entity that through its entity choice chooses to forgo a profit motive.

    A fourth definition asserts that a social enterprise consists of a community of dedicated individuals that are continuously thinking about social impact, and as a result employ business and management techniques to approach social causes. Nonprofit[ edit ] Social enterprises are not only a structural element of a non-profit.

    A large portion of social enterprises are non-profits; however, there are also for-profit social enterprises. The social enterprise model offers non-profit organizations an alternative to reliance on charitable donations. This may allow them to increase their funding and sustainability, and assist them in the pursuit of their social mission.

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    However, two potential issues emerge: Corporate Social Responsibility[ edit ] Many commercial enterprises would consider themselves to have social objectives, but commitment to these objectives is motivated by the perception that such commitment will ultimately make the enterprise more financially valuable. These are organisations that might be more properly said to be operating corporate responsibility programs.

    Social enterprises differ in that their commitment to impact is central to the mission of the business. Some may not aim to offer any benefit to their investors, except where they believe that doing so will ultimately further their capacity to realize their social and environmental goals, although there is a huge amount of variation in forms and activities.

    Corporate social responsibility CSR is a practice that businesses can use to be conscious of the social and environmental impacts their activities make. Social enterprises place a lot of emphasis on external social responsibility as a result of their social objectives, so social impact is built into the organization. However, there had been debate on whether or not social enterprises place enough emphasis on internal CSR.

    Social Entrepreneurship[ edit ] Like social enterprise, social entrepreneurship has a variety of existing definitions. Currently there is not a widely accepted, standard definition for the term, and descriptions vary in level of detail.

    There is an emphasis on change agents for social enterpreneurship, in contrast to the organizational focus of social enterprises. Social entrepreneurship usually takes place in the non-profit sector, with a focus on creating and implementing new solutions. Social Enterprise[ edit ] Social impact and social enterprise are not the same. Social impact may refer to the overall effects of a business, but a business that has social impact may or may not be a social enterprise.

    Social enterprises have socially bound mission statements and operate with the goal of solving a social problem as a part of their mission. Social Enterprise Funding[ edit ] Socially responsible investing SRI seeks to maximize both financial gain and social impact.

    The methods in which these Social Enterprise's create sustainable revenue streams differ from social business to social business, but all share the goal of abandoning the need for government or donor support. Gregory Dee's and Beth Anderson discuss this difference in funding strategies as the innovation that differentiates the social enterprise from the traditional non-profit actor.

    Salesforce said they would withdraw applications to trademark the term 'social enterprise', and remove any references to 'social enterprise' in its marketing materials in the future. They are able to go about achieving these goals by employing the financial and flexible advantages of a limited liability company. Currently there is more literature and research on the emergence of the social enterprise sector, as well as the internal management of social enterprise organizations.

    Due to the dual purpose missions of social enterprises, organizations cannot directly employ the typical management strategies of established business models. Recent academic literature has argued against prior positively held views of social enterprises success in striking a balance between the two tensions, and instead arguing that the social mission is being compromised in favor of financial stability. Prioritizing social good over financial stability contradicts rational firm management, which typically prioritizes financial and profit-seeking goals.

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    As a result, different management issues arise that range from stakeholders and management agreeing on the firm's goals, but disagreeing on an action plan; to management and stakeholders disagreeing on the firm's goals. Some social enterprises have taken on same-sector and cross-sector partnerships, while others continue to operate independently.

    A major challenge is figuring out how to gauge success with conflicting goals. Many social organizations grapple with who to hire, as many want to help disadvantaged people, but also need workers with business skills to ensure the success of the enterprise.

    Organizations face the challenge of deciding on which organizational structure and legal form e.

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    Non-Profit, for Profit to operate under. These tensions are amplified with the maintenance of relationships with stakeholders who may have conflicting identities from the organization. In the short term, organizations aim for stability which can be evaluated based on metrics such as costs, profits, and revenues, but in the long run they want growth, flexibility, and progress in achieving their social mission.

    The project was led by Associate Professor Jo Barraket, Australia's leading social enterprise academic. One of the key features of this Australian research is its intention to define social enterprise in a way that was informed by and made sense to those working in or with social enterprises.

    The research design therefore included workshops to explore and test what social enterprise managers, researchers, and relevant policy makers meant by the term 'social enterprise'. This was the resulting definition: Social enterprises are organisations that: This is a movement that has been captured by many throughout all sectors of the Australian Economy. Social Enterprise activity can be found primarily in small communities and larger institutions.

    These institutes work for more than profit alone; they foster social and environmental innovation and are accountable for their employees, consumers and the communities. They offer a business model where people can be given direct voice in running the organisation. In North America[ edit ] United States[ edit ] The Social Enterprise Alliance defines a "social enterprise" as "an organization or venture that advances its primary social or environmental mission using business methods.

    S, two distinct characteristics differentiate social enterprises from other types of businesses, nonprofits, and government agencies: Social enterprises directly address social needs through their products and services or through the numbers of disadvantaged people they employ. This distinguishes them from "socially responsible businesses", which create positive social change indirectly through the practice of corporate social responsibility e. Social enterprises use earned revenue strategies to pursue a double or triple bottom lineeither alone as a social sector business, in either the private or the nonprofit sector or as a significant part of a nonprofit's mixed revenue stream that also includes charitable contributions and public sector subsidies.

    This distinguishes them from traditional nonprofits, which rely primarily on philanthropic and government support. The double bottom line consists of social goals and profit maximization.

    Here the two are not contradictory; however, proper financial management to achieve positive profits is necessary in order to undertake the organizations social goals. The triple bottom line is essentially the double bottom line, with the addition of environmental sustainability. All these types of entities grapple with social needs in a variety of ways, but unless they directly address social needs through their products or services or the numbers of disadvantaged people they employ, they do not qualify as social enterprises.

    Social enterprises are one more tool for non-profits to use to meet their mission to contribute to healthy communities. Social enterprises may directly address social needs through their products and services, the number of people they employ or the use of their financial surplus. This can distinguish them from "socially responsible for-profit businesses", which create positive social change indirectly through the practice of corporate social responsibility e.

    Social enterprises may use earned revenue strategies to pursue a double or triple bottom lineeither alone as a social economy business, in either the private or the not-for-profit sector or as a significant part of a not-for-profit corporation's mixed income stream that may include charitable contributions and public sector assistance. This distinguishes them from some traditional not-for-profit corporations, which may rely in whole or part on charitable and government support.

    Significant regional differences in legislation, financing, support agencies and corporate structures can be seen across Canada as a result of different historical development paths in the social economy.

    Middle East[ edit ] There is no separate legal entity for social enterprises in the Middle East. Most social enterprises register as companies or non-profit organizations. There isn't a proper definition of social enterprises by the governments of the Middle Eastern countries.

    A majority of the existing social enterprises are engaged in human capital development.
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