What is a Social Enterprise? Description and Examples.

A social enterprise is an organisation that uses commercial strategies to tackle social issues. These issues can relate to homelessness, helping at risk or vulnerable people with food supply, education or protecting the environment. A social enterprise does not have to be a non for profit organisation. These social enterprises live in the space in between NFP’s and purely for profit businesses. Having a positive impact is built into their business models. However, unlike charities a social enterprise may produce products or provide services unrelated to the impact they’re aiming to make. In this way, they can facilitate social good without being responsible for delivering it directly.

A social enterprise may offer a product unrelated to the impact it aims to make.

For instance, Karma Pay is a social enterprise that was founded by Pete Winn in Perth, Western Australia. Their primary product is a mobile payments app similar to purely commercial products like Apple Pay. The difference is that Karma Pay uses blockchain technology to allow a transparent, trackable revenue split that helps fund universal education by building schools in third world countries through Classroom of Hope. The app also motivates users by measuring the personal impact of each purchase they make on the app. In this way, Karma Pay supplies the funding required to build each school, without actually building the schools themselves.

A social enterprise will often partner with charities.

A social enterprise will sometimes make strategic partnerships with non for profit businesses for the fulfilment of their social mission. For example, Feed Mee Australia is an online grocery store that delivers groceries from Coles, Woolworths or Aldi in under three hours for a $7 delivery fee. However, they also redirect a portion of their profits in order to deliver food boxes from NFP’s like Oz Harvest or Food Rescue to disadvantaged people for free. We recently spoke to the founder of Feed Mee Australia – Tyler Spooner, to get his advice on How to Build a High Growth Startup.

A social enterprise goes beyond corporate social responsibility.

Social Enterprises are different from other for profit businesses that simply uphold their corporate social responsibility. CSR refers to a company taking responsibility for the negative impact they make on either the environment or social wellbeing. Some commercial enterprises may implement genuine social initiatives (McDonald’s ‘McHappy Day’ or Cotton On’s ‘products that give’). However, commitment to these initiatives is often driven by the positive sentiment they create. Which allows the enterprise to be more profitable overall.

Social Enterprises are different in that their commitment to positive social impact is central to the mission of their business. A true social enterprise has a mission for social impact built into their company’s DNA. Therefore, it’s pivotal that the founder of a social enterprise is mindful when bringing on co-founders, advisors, investors and staff. When profit isn’t the sole objective of a businesses, determining the company’s vision, mission and values become even more important. Finding a team that is willing to live by those values often determines the company’s future.

When you listen to a social enterprise founder like Tyler Spooner or Pete Winn, what stands out is the commitment they have to their goals. The whole reason their businesses exist is because of their passion to make a positive social impact on the world. Which is why the founding team are so central to the success or failure of any social enterprise, because they drive the identity of business.

Mike Drysdale

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