Why Social Enterprise?

Are they different? You’re not going to love this answer, but there isn’t a consensus here. Sometimes these terms are used interchangeably, sometimes they’re not. If we wanted to make a distinction, we’d say social enterprise is the use of business tools to address a social need, and social innovation is addressing a social need in a new, ground-breaking way. While it’s possible to use business tools without using them innovatively, and it’s possible to innovate without using business tools, we champion—and seek out—those working at the intersection of these two concepts.

For most people, “social enterprise” winds up being the (very broad) default term used to cover all of it. And as the term (and the movement itself) has gained traction over the last few years, its definitional parameters have been expanded to include just about everything mildly entrepreneurial and innovative but the kitchen sink. This is good in some ways, and not so good in others. Good, because it gets the message to a wide audience that there are ways to impact social or environmental issues other than the traditional nonprofit. Not so good, because it tends to lead the average member of society to assume that the biggest and loudest entities are the only (or even the best) social enterprise approaches.

Plenty of well-intentioned companies and ideas floating around in this space will tell you that they’re “changing the world” or “solving” their social problem of choice. But if they’re not addressing why people are poor in the first place, or why gaps in education continue to persist, or any number of other causal issues, the hard-to-swallow reality is, they’re not really solving anything. Performing charity, perhaps. But eradicating a social problem from the earth? Unfortunately, probably not. Indeed, the ventures that have garnered the most attention to date are only distant cousins to the social enterprises we seek foster. (For example, you’ve probably heard about a well-known shoe company that rhymes with moms). Don’t get us wrong, we love our cousins. But the degree of separation is a meaningful one.

For better or worse, the expansiveness of the term social enterprise that has snowballed its popularity (the bigger the bucket, the more stuff you can throw in there), has also led to trouble coming up with a definition everyone can agree on. Ask different people and you’ll likely get a different answer.

Definitions can include some or all of a number of concepts. Small nonprofits using entrepreneurial practices are on one end of the spectrum. Big mainstream companies simply doing business better (using environmentally sound practices, treating their employees particularly well, or donating a portion of their proceeds to pre-existing charities—often referred to as triple bottom line companies or conscious brands) on the other end of the spectrum.

In the middle you’ll find other definitions, spurring debate over aspects like the degree to which an entity’s primary activities must tie to its a social mission, the necessity of including social commitment in an entity’s formational documents, and whether a side project of an existing organization makes the cut. Yes, some definitions provide for overlap. And yes, it’s confusing.

Like most things in life, the portion of the vast social enterprise world that most resonates with you will depend on your experience and your objectives.

With all the murkiness and inefficiency that has come to surround defining social enterprise, articulating just what that portion is can be challenging. So, instead of adding more of the same, we’re inventing our own category. We call it non-nonprofit (that for-profit, mission-first stuff we were yammering about here). By carving out our own piece of social enterprise in this way, we are able to communicate more efficiently with our audience, connect with the right clients, and focus on what resonates most with us—entities created to solve deep-rooted social problems that can sustain themselves as for-profits.