Overview: Social Enterprise

Social enterprises are defined in many ways, but typically are nonprofit organizations that operate businesses in order to generate revenues and fulfill their missions. The concept has become increasingly common in the past three decades as a result of a combination of government funding cuts to social programs. Other factors promoting the growth of social enterprise include growing nonprofit recognition of the importance of earned income to enabling their organizations to use independently generated revenue to support programs that make sense for their communities, build community wealth, and directly improve the job skills of people facing barriers to entry in the workplace.

History

Although social enterprise did not become a defined concept until the 1970s, nonprofits have been involved in such enterprises for over a century. For example, founded in 1902, Goodwill Industries began by employing poor, city residents to repair and sell donated goods, and then used the revenues generated to fund its community and job training programs. Other prominent nonprofits with long histories of social enterprise include the Girl Scouts and YMCA.

Social enterprises play a critical role in building community wealth for several key reasons:

  • These businesses build locally controlled wealth, which helps stabilize community economies.
  • Social enterprises can provide valuable training opportunities and supportive jobs for those who have been excluded from the traditional labor market.
  • The revenue organizations generate through such enterprises helps reduce their dependence on government and philanthropic funding, and thus, often encourages nonprofits to adopt more innovative, community-driven approaches.
  • Through the development of such businesses, nonprofit organizations can strengthen their management and business capacities, which, in turn, can boost their overall program effectiveness.

Community-wealth.org houses an extensive collection of resources focused on social enterprise and this strategy’s role in community wealth building. Below is a glimpse of the rich array of materials you will find as you explore our site:

Our Support Organizations section features major organizations that are actively advancing the social enterprise field.  One such group is the Social Enterprise Alliance , a membership organization committed to promoting the success of social enterprise through research, information sharing, advocacy, and network building.

Key Facts & Figures

(from a recent survey of the field)

Percent of survey respondents considering launching a social enterprise

57%

Percent of survey respondents with 2 or more social enterprises

45%

Percent of the largest survey respondents (i.e., budgets > $5 million) with social enterprises

60%

Percent of the smallest survey respondents (i.e., budgets < $250,000 million) with social enterprises

40%

Percent of social enterprises with revenues greater than $1 million

34%

Our Best Practices section showcases exemplary social enterprises such as FareStart in Seattle, WA, which provides meals to those in need while helping disadvantaged people gain work skills in its restaurant, café, and catering businesses.  In 2012 alone, FareStart prepared 562,000 meals for shelters and low-income day care centers, provided training opportunities for 242 individuals, and generated 50 percent of its operating revenues through its business enterprises.

Our Research Resources section highlights web-based resources on social enterprise.  For example, the Duke Center for the Advancement of Social Entrepreneurship's website provides links to a range of articles, papers, case studies, organizations, and other resources focused on social entrepreneurship and related topics.

Our Articles and Publications section includes links to a diverse selection of articles, reports, papers, and books focused on social enterprise.  One such report is Community Wealth Ventures, The Social Enterprise Alliance, and The Center for the Advancement of Social Entrepreneurship’s Social Enterprise: A Portrait of the Field (2010), which highlights key findings from a comprehensive survey designed to identify trends and best practices among North American social enterprises.

Our Toolbox features resources designed to help on-the-ground practitioners working to develop social enterprises or advance the field more generally.  For example, Community Action Partnership’s Social Enterprise Toolkit includes a step-by-step guide to help nonprofit practitioners create and finance successful social enterprises.

And, lastly, our Policy Guide provides an overview of federal initiatives and programs that can help practitioners leverage resources and increase their impact. For example, the Social Innovation Fund (SIF) is a program that provides resources to grantmaking intermediaries, who then use those funds to support nonprofits implementing innovative program models such as social enterprise.