Social Enterprises Are Companies that Have Made Sustainability Part of Their Purpose
There are many things a company can do in order for it to be identified as a social enterprise, but what they all have in common is a focus on sustainability—either environmental, social, or both. In the same grain of purpose and profit being inseparable, social enterprises seek to maximize profits while also maximizing social benefit, usually by using profits generated to fund socially responsible endeavors.
Organizations can contribute to social sustainability by developing businesses with the dual motive of making money and contributing to social change. Social enterprises, as they are called, deal with an environmental or social problem through a “market driven approach,” the Social Enterprise Alliance says. Through their product, employment opportunities, philanthropic work or other business practices, these organizations address a problem while also seeking to make profit. As the idea of a social enterprise has generated more and more buzz over the years, the definition of the term social enterprises keeps evolving. An article on B the Change noted that at its core, an organization should commit to a social or environmental cause to be a social enterprise. Once it does, there are a few ways it can go about it -- through its business activity, fundamental/legal paperwork, a side-project or philanthropy. While there is no consensus on the definition of the term social enterprise, as the article said, that has paved the way for the term to be flexible, consisting of a myriad of business models, including those like public benefit corporations, Certified B Corps, etc. In its generous definition, social enterprises, today, also include nonprofits with a revenue-generating model like Girl Scouts of America. In a more traditional sense, for-profit organizations, like Goodwill, which emphasize on making profit by fulfilling a social mission, make the cut for a social enterprise. Apart from being a one-stop-shop for used personal and household products, Goodwill, since its inception, has provided employment opportunities to people for whom jobs are scarcely available. According to the Social Enterprise Alliance, in 2014, Goodwill created employment and job training opportunities for more than two million people while earning a revenue of $4.6 billion. Businesses that are driven by a profit-making primary activity and address social problems through their business practices, like helping out their employees, community, etc. are also a part of the social enterprise bubble. Companies like benefit corporations, which are legally registered with their states as such, and Certified B Corps, which are certified by the nonprofit B Lab U.S. and Canada, fall into this category. Then there are businesses which contribute to sustainability through their donations. Warby Parker, an online retailer for prescription glasses and sunglasses, has a “Buy A Pair, Give A Pair'' program. The program donates a pair of glasses for each pair bought. Addressing lack of access to eye-care and glasses across the world is one of its core missions. Although social enterprises already consist of different types of business models, there is no tapping this category. There are various types of organizational models: cooperatives, awareness brands, etc. that contribute to social sustainability in different ways, overlapping with already established structures in some ways and unique in some others. The overarching objective of any organization with a social purpose is to do good and help alleviate a social problem. As corporate conscience continues to develop and customers continue to demand more accountability from organizations, the space for different types of social enterprises, seems as it is going to continue to expand.