What is a social enterprise?

“Social enterprises are businesses that are set up to tackle social problems, improve communities, people’s life chances, or the environment. They make and do things that earn money and make profits like any business. It is how they work and what they do with their profits that is different: working to make a bigger difference, reinvesting the profits they make to do more good.”  Social Enterprise UK, 2011                                      

Well-known social enterprises include The Big Issue, CafeDirect, Divine Chocolate, The Co-operative Group, and the The Eden Project. 

They all share the common defining characteristics of social enterprises:

• A social enterprise is a business. That means it is engaged in some form of trading, but it trades primarily to support a social purpose. 

• Each social enterprise has clear social or environmental aims – the difference they are trying to make, the people they are trying to help and why. Fundamentally - the reason they exist in the first place.

• Like any business, it aims to make a profit, but it seeks to reinvest those profits principally in the business or in the community to enable it to deliver on its social objectives. It is, therefore, not simply a business driven by the need to maximise profit to shareholders or owners. 

• Social enterprises are structured, owned and governed by a range of stakeholders (e.g. employees, service users, customers, members, local community groups and social investors), or directors who control the enterprise on behalf of a wider group of stakeholders.  

Social enterprises are started for many different reasons and can develop from a number of different routes.   They can be completely new ventures or existing organisations that want to become social enterprises e.g. voluntary organisations and charities.