What is a social enterprise?

A social enterprise is a business that has both social and commercial goals. What makes it different from other enterprises is that it places a firm emphasis on tackling social problems. This positive impact is as important to its business objective as any financial bottom line.

How does it work?

Because it operates as a business, a social enterprise does things that make money, such as selling goods or services; unlike a charity which relies on donations. This could encompass a whole host of activities and you’ll find social enterprises with every legal structure in almost every industry. Examples range from Busters Coffee in Sheffield – a coffee shop that employs adults with learning disabilities – through to bloomtrigger – an online funding platform that protects the rainforest. Clearly, the scope of the sector is huge and it’s growing all the time.

Social enterprises come in all shapes and sizes. However, a social enterprise will always reinvest its profits back into the company or use them to further the organisation’s social goals, rather than deliver a return to investors. For example, a social enterprise providing affordable childcare could use its surplus profits to open a new centre in another town.

Examples of social enterprises

ClearlySo has created an online business directory that has 3106 social businesses and enterprises and is growing every day.

You can cross examine these organisations by their industry, benefit and country – you’ll soon discover that it’s a very diverse sector.

We’ve also written a case study about Inside Job Productions; a UK social enterprise that produces professional films for social purposes, funds media projects for hard-to-reach communities and offers serving offenders training and employment opportunities.

What about social businesses?

At ClearlySo, we work with social businesses as well as social enterprises. These differ slightly in that, in addition to a social goal, they may seek to deliver a return to their shareholders. We do not argue that this approach is better or worse than social enterprise. Both place at least equal importance on generating lasting social benefit as their bottom line and that’s what counts. We want to see the emerging social economy in its entirety prosper.

To understand more about the differences between a social enterprise and a social business, please read our definition of a social business.