What is the main objective of social entrepreneurship?

Social entrepreneurship is the process through which specific types of actors – the “social entrepreneurs” – create and develop organisations that may be either social enterprises or other types of organisations. It also designates a field including a broad set of initiatives with a social impact dimension in a spectrum ranging from for-profit to non-profits.

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Publications
Main The Goals of a Social Enterprise

Social entrepreneurship flourishes when a holistic policy ecosystems is in place – an appropriate regulatory framework, means to ensure a better access to market and finance and opportunities for skills development notably through business support structures.

Since its 1990’s pioneering work to define social enterprises, the OECD’s work on social entrepreneurship has significantly expanded and has developed a robust evidence base on effective policies for social entrepreneurship.

Social enterprises are identified by the OECD as “any private activity conducted in the public interest, organised with an entrepreneurial strategy, whose main purpose is not the maximisation of profit but the attainment of certain economic and social goals, and which has the capacity for bringing innovative solutions to the problems of social exclusion and unemployment.”

More recently, the European Commission has defined a social enterprise as being “an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or shareholders. It operates by providing goods and services for the market in an entrepreneurial and innovative fashion and uses its profits primarily to achieve social objectives. It is managed in an open and responsible manner and, in particular, involves employees, consumers and stakeholders affected by its commercial activities."

Projects

Policies to support social entrepreneurship in the European Union

Since 2011, the OECD has worked to develop policies and programmes to support social entrepreneurship and foster social enterprise development, with the financial support of the European Commission DG Employment, Social Affairs and Inclusion (DG EMPL).

This work has notably materialised in the production of in-depth policy reviews on social entrepreneurship that aim to assess the policy gaps in EU Member States in this field and to promote good policy practices.

Promoting the legal and regulatory frameworks for social enterprises in the European Union

In 2020, the OECD launched a two-year project, with the financial support of the European Commission DG for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW), to promote the development of legal and regulatory frameworks in EU Member States that effectively allow social enterprises to develop and thrive.

As part of its outputs, a manual providing guidance for policymakers to assess, design and improve legal and regulatory frameworks for social enterprises will be produced. The production of a manual will be complemented by a mutual learning seminar for representatives of national governments involved in designing policies, especially legal and regulatory frameworks for social enterprise development.

More information on the Action can be found on the dedicated webpage

Publications

Our work on supporting social entrepreneurship consists of the following:

Manual

Designing Legal Frameworks for Social Enterprises: Practical Guidance for Policy Makers (2022)

Milestone publications

In-depth country reviews on social entrepreneurship

Policy briefs

* These publications have been produced with the financial support of the European Union.

Contact

For general information about Social Economy, please contact

Social enterprises have missions that are meant to support and serve social or ethical issues or needs. Social enterprises are directly involved in producing goods or providing services and competing in the same markets as other business who do not identify as social enterprises.

Some might argue all enterprises are to a degree social enterprises when you consider they usually operate by a standard of ethics and they create jobs which serves society, however, a large differentiating factor is, social enterprises are less concerned with paying owners and stakeholders and more concerned with serving their societal mission.

A social enterprise aims to…

Design operations to profit for both social impact and survival of the organization.

Innovate focussing on community or environmental issues.

Institutionalize impact and scale up for optimal efficiency and growth of a cause to maximize reach.

The objective of a social enterprise could be to encourage the employment of women in tech-related fields.

The business sells services and products relative to their mission and then reinvests the money into the program itself or into efforts supporting women in tech such as free resources.

Social entrepreneurship can be very rewarding, but also tricky so prepare yourself as much as possible and take calculated risks.

Are you a social entrepreneur? We would like to hear from you. Send us your pitch!

A social enterprise or social business is defined as a business with specific social objectives that serve its primary purpose. Social enterprises seek to maximize profits while maximizing benefits to society and the environment, and the profits are principally used to fund social programs.

A social enterprise is a business with social objectives.
Maximizing profits is not the primary goal of a social enterprise as is with a traditional business.
Unlike a charity, social enterprises pursue endeavors that generate revenues, which fund their social causes.
Regarding employment, preference is given to job-seekers from at-risk communities.
Funding for a social enterprise is often obtained by selling services and goods.

The concept of a social enterprise was developed in the U.K. in the late 1970s to counter the traditional commercial enterprise. Social enterprises exist at the intersection of the private and volunteer sectors. They seek to balance activities that provide financial benefits with social goals, such as housing for low-income families or job training.

Funding is obtained primarily by selling goods and services to consumers, although some funding is obtained through grants. Because profit-maximization is not the primary goal, a social enterprise operates differently than a standard company.

While earning profits is not the primary motivation behind a social enterprise, revenue still plays an essential role in the venture's sustainability. Sustainable revenue differentiates a social enterprise from a traditional charity that relies on outside funding to fulfill its social mission. This goal does not mean social enterprises cannot be profitable. Instead, it's simply that their priority is to reinvest profits into their social mission rather than fund payouts to shareholders.

A social enterprise is not to be confused with social entrepreneurship, which focuses on individuals who develop solutions to social and environmental problems using existing business techniques and strategies. Social entrepreneurs seek innovative ways to drive change, whereas social enterprises form to fulfill a business purpose and solve societal needs through their commercial activities.

Many social enterprises successfully maximize improvements in social well-being. For example, Warby Parker is an American eyeglass retailer that donates a pair of glasses to someone in need for every pair sold. TOMS, a California-based retailer, similarly has pledged to donate a pair of shoes or sunglasses for every pair sold. Also, Radicle trains businesses and gives them software tools to track and cut their greenhouse gas emissions.

Employees of social enterprises come from many backgrounds, but priority is given to those from at-risk sections of the communities. These may include long-term underemployed workers, who have historically worked in jobs where they were informally paid.

Social enterprise opportunities may seek to provide a living wage, which is above the minimum wage in most cities. Some social enterprises may pointedly seek out employees from at-risk groups as a requirement for hire.

Social enterprises are usually a blend of private and volunteer sectors. A credit union, a coffee shop that sells fair-trade beans and hires candidates from at-risk communities, or a neighborhood food co-op are all examples of social enterprises.

If you own a business, you could partner with a nonprofit, food pantry (if applicable), or other charity and donate your time, money, or products. If you are starting from the ground up, the first step may be to identify a problem and your solution to it, explain to potential funders your action plan, and make sure you have experts to back up and support your endeavor.

If you want to get hired by a social enterprise, you should understand both the for-profit and the social benefits that it provides. Many employees of social enterprises are from diverse backgrounds and some may come from at-risk communities. Like any job, the qualifications will likely be based on experience and education, as well.