Social enterprises are social mission driven organizations which apply market-based strategies to achieve a social purpose. The movement includes both non-profits that use business models to pursue their mission and for-profits whose primary purposes are social. Their aim – to accomplish targets that are social and/or environmental as well as financial – is often referred to as the triple bottom line. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose remains central to their operation.
Rather than maximizing shareholder value, the main aim of social enterprises is to generate profit to further their social and or environmental goals. This can be accomplished through a variety of ways and depends on the structure of the social enterprise. The profit from a business could be used to support a social aim, such as funding the programming of a non-profit organization. Moreover, a business could accomplish its social aim through its operation by employing individuals from disadvantaged backgrounds or lending to micro-businesses that have difficulty in securing investment from mainstream lenders.
The Social Enterprise World Forum was established in 2008 to provide an opportunity for social enterprise leaders and practitioners from around the world to collaborate in support of social enterprise development. To date over 1500 people have attended the annual world forums, these have been held in Edinburgh (2008), Melbourne (2009) and San Francisco (2010). The 2011 World Forum is being held in Johannesburg and the SEWF steering group is receiving expressions of interest for the 2012 World Forum to be held in Asia.
Some well known social enterprises include John Lewis, Welsh Water (Glas Cymru), Cafédirect, The Eden Project, Divine Chocolate (Kuapa Kokoo), The Big Issue, the Co-operative Group, Duchy Originals, the London Symphony Orchestra, and Jamie Oliver's Restaurant - 15.
Three common characteristics of social enterprises as defined by Social Enterprise London are:
1. Enterprise orientation: They are directly involved in producing goods or providing services to a market. They seek to be viable trading organisations, with an operating surplus.
2. Social Aims: They have explicit social aims such as job creation, training or the provision of local services. They have ethical values including a commitment to local capacity building, and they are accountable to their members and the wider community for their social environmental and economic impact.
3. Social ownership: They are autonomous organisations with governance and ownership structures based on participation by stakeholder groups (users or clients, local community groups etc.) or by trustees. Profits are distributed as profit sharing to stakeholders or used for the benefit of the community.
