Roxanne L.

Tan

Rose Miles P. Veranda

Social enterprises are known by many names: social businesses, social-

purpose businesses, mission-driven businesses, social ventures, etc. Whatever
name they go by, social businesses have a dual purpose: to advance a social goal
while also making a profit. These are the companies that prioritize the needs of their
customers and the environment over shareholder profit and invest their income in
bringing about constructive social change because they have social and
environmental missions.

The role of social enterprises promotes innovation and entrepreneurship.

They encourage creative thinking and problem-solving by developing new products
or services that meet societal needs. Through their entrepreneurial spirit, they inspire
others to think beyond profit-making and consider the greater good.

Some complementary definitions:

● Social enterprise applies an entrepreneurial approach to addressing social

issues and creating positive community change.
● A social enterprise is a business that uses entrepreneurial methods to
accomplish social goals and/or feed profits to a parent charity or non-profit to
enable it to fulfill more of its own social mission.
● A social enterprise is a revenue-generating business with primarily social
objectives whose surpluses are reinvested for that purpose in the business or
in the community, rather than being driven by the need to deliver profit to
shareholders and owners.
 Many social businesses are successful in maximizing gains in societal
wellbeing. For instance, American eyeglass shop Warby Parker gives away a pair of
spectacles for every pair of eyewear it sells to a person in need. A pair of shoes or
sunglasses will be donated for each pair of shoes sold by TOMS, a California-based
store. Additionally, Radicle provides software tools and training to businesses to help
them track and reduce their greenhouse gas emissions.

How do social enterprises work?

To explain this, let us distinguish social enterprises from profit-oriented

organizations and social-oriented organizations. The first point you need to pay
attention to is the difference in their purpose.

● Profit-oriented organizations are motivated by profit and seek to maximize

profits, and ultimately, returns to shareholders. A company may have a social
impact, for example, through a corporate social responsibility program, but
that is no more important than a profit goal.
● Non-profit organizations do not make a profit. Examples are charities and
non-governmental organizations. They rely on funding from sources such as
donations and grants. Any money they receive does not go to the owners or
organizers.

Social enterprises compromise the goals of the two organizations above.

They are a for-profit social organization. They operate commercially to make a big
social impact. In other words, they make a profit, but it is more used to sustain the
organization’s social goals.

Then, the following three characteristics of social enterprises describe how

they operate:

● They make money in a socially and environmentally responsible way. They

also adopt ethical principles in operating the business. For example, they offer
 environmentally friendly products such as renewable energy. Another
example is to provide fair wages.
● They need to make a profit to survive. Without profit, business does not
continue. It is their main source of capital to run the business. They cannot
rely on donations like charities.
● They use most of the profit or surplus to benefit society. In other words, they
use business principles to achieve social goals. They may compete with
profit-oriented firms in the same market or industry.

Social enterprises exist in almost every industry, from healthcare to energy,

from retail to recycling, from employment to sport, and from housing to education.
Whatever they do, they do it differently from other businesses, because they are
centrally driven by a social and environmental mission, and they are focused on the
needs of the communities they serve.

In conclusion, our society needs social enterprise because they address

pressing issues, promote inclusivity and equality, and inspire change within the
business world. By supporting these organizations and their initiatives, we can create
a more sustainable future where profit-making goes hand in hand with positive
societal outcomes.