Social enterprise facts for kids

A social enterprise is a special kind of organization. It uses business ideas to make the world better. Instead of just making money for owners, it focuses on helping people, communities, or the environment. Think of it as a business with a big heart!

These organizations can be set up in different ways, like a regular business, a partnership, or even a non-profit group. What makes them special is that their main goal is to create positive change, not just profit. They earn money by selling things or services, and then they put most of that money back into their mission. This helps them keep going without always needing donations.

Social enterprises are often more stable than charities that rely only on gifts. They can grow and help even more people over time.

What Are the Types of Social Enterprises?

Social enterprises are always changing to meet new needs. But they all aim to do three things well: make money, help people, and protect the planet.

Businesses Owned by Workers

These are businesses where the employees own and run the company. Examples include large stores like John Lewis Partnership in the UK or smaller groups where workers share decisions and pay.

Financial Help Organizations

These groups help people with money, like credit unions or micro credit organizations. They are owned by their members. Credit unions started a long time ago, helping people save and borrow money fairly.

Community Groups

Many local groups are social enterprises. This includes things like housing co-operatives, community centers, or even local pubs and shops. They earn money to invest back into their community. They often have many members who are also their customers or supporters.

Charities and NGOs with Businesses

Some charities and non-governmental organizations (NGOs) run businesses to earn money. For example, Oxfam International might sell products or offer consulting. The money they make helps pay for their free services or supports their social and environmental goals.

How Did Social Enterprises Start?

The idea of social enterprises began to grow in the late 1970s. People wanted a new way to run organizations that was different from regular businesses or government groups.

Early Ideas

The first ideas for social enterprises focused on a few key things:

• Shared Ownership: Members or workers would own the organization together.
• Fair Decisions: Everyone involved would have a say in how things were run.
• Triple Bottom Line: They would focus on three main goals:

* Making enough money to be strong. * Creating social good and helping people. * Being kind to the environment.

These groups also wanted to measure their success in all three areas, not just money.

From Non-Profits to Social Enterprises

Many ideas for social enterprises came from non-profit groups. Non-profits used to rely mostly on government help or donations. But over time, their costs went up, and donations sometimes went down. So, many non-profits started using business ideas to earn their own money. This led to a new kind of organization that mixes social goals with business methods.

Muhammad Yunus and Microfinance

Muhammad Yunus, who started Grameen Bank, helped make the term "social enterprise" famous. He won the Nobel Peace Prize in 2006 for his work. He gave small loans, called micro-credit, to poor people, especially women. This helped them start their own small businesses and improve their lives.

Growing in Universities

Big universities like Harvard and Stanford also started studying and teaching about social entrepreneurship. This helped the idea spread and become more recognized.

What Do We Call Them?

The term "social enterprise" can mean slightly different things in different places. In some countries, it's about helping charities earn money. In others, it's more about community groups and shared ownership.

Social Enterprise vs. Non-Profit

It's easy to confuse social enterprises with non-profits. Many social enterprises are non-profits, but not all. Some social enterprises are for-profit businesses that still put their social mission first. The main difference is that social enterprises use business methods to earn most of their money, rather than relying only on donations.

Social Enterprise vs. Corporate Social Responsibility

Regular businesses sometimes do good things for society or the environment. This is called corporate social responsibility (CSR). But for social enterprises, helping people or the planet is their main goal. For a CSR business, the main goal is still making money, and social good is a way to help that.

Social Enterprise vs. Social Entrepreneurship

Social entrepreneurship is about the people who create new ways to solve social problems. A social enterprise is the organization or business they create. So, a social entrepreneur starts a social enterprise.

How Social Enterprises Get Money

Social enterprises often use smart business plans to fund their social work. They want to earn enough money so they don't always need government help or donations. This allows them to be strong and keep working on their mission for a long time.

A Famous Name Dispute

In 2012, a big software company, Salesforce.com, started using the term "social enterprise" for its products. Many social enterprise groups around the world protested. They felt the company was taking their name, which stood for helping people, and using it just for business. Salesforce.com eventually agreed to stop using the term in their marketing. This shows how important the name "social enterprise" is to those who truly focus on social good.

Mixed Types of Organizations

Some organizations are a mix of different types. They might not be purely private, public, or non-profit. Two examples are:

• Low-Profit Limited Liability Company (L3C): This type of company aims for social goals first, but also has some financial benefits of a regular company.
• Benefit Corporation (B-Corp): This is a company that works to create a "general public benefit" alongside making money.

Where Are Social Enterprises Found?

Social enterprises are growing all over the world, adapting to local needs and cultures.

Australia

In Australia, social enterprises have a long history, even if they weren't always called that. They are businesses that:

• Have a main goal of helping the community, society, or environment.
• Earn most of their money from selling things or services.
• Put most of their profits back into their mission.

Research shows there are over 20,000 social enterprises in Australia, employing hundreds of thousands of people. They contribute billions to the economy! Many help people with disabilities or those who have been unemployed for a long time find jobs.

Organizations like the Alliance of Social Enterprise Networks Australia (ASENA) help connect and support these businesses across the country.

North America

United States

In the U.S., social enterprises are defined as groups that solve social or environmental problems using a business approach. They are different because:

• They directly help people through what they sell or by hiring disadvantaged people.
• They use earned money to achieve both social goals and financial stability. This is called a "double bottom line" (social and profit) or "triple bottom line" (social, profit, and environment).

They face challenges like finding the right legal structure, measuring their impact, and getting enough money.

Canada

In Canada, social enterprises are often businesses owned by non-profit groups. They sell goods or services to earn money and achieve social, cultural, or environmental goals. They are another way for non-profits to help their communities. Examples include Habitat for Humanity ReStore, which sells donated home goods to fund housing projects.

Asia

Middle East

There isn't a special legal type for social enterprises in the Middle East. They usually register as regular companies or non-profits. However, many are active, especially in helping people develop skills and find jobs. Young people in the region are very interested in creating social impact.

South Korea

South Korea has a special law, the Social Enterprise Promotion Act, passed in 2007. This law helps organizations that create jobs for disadvantaged people or provide social services. The government supports these groups with tax breaks and financial help. Many Korean social enterprises focus on creating jobs.

China

The idea of social enterprise is newer in China, becoming more known around 2012. They often focus on innovation and taking risks to solve social problems.

Hong Kong

Like the Middle East, Hong Kong doesn't have a separate legal type for social enterprises. They are businesses that aim for social goals, and their profits are mostly put back into those goals, not given to shareholders.

India

In India, social enterprises can be non-profit organizations or businesses that aim to help the poor. They might raise money through events, donations, or selling products. For them, the social cause is always more important than making a profit, though profit is needed to keep the business going.

Malaysia

Malaysia defines social enterprises as organizations that use business models to solve social problems and support themselves financially. The Malaysian government actively supports social enterprises with programs to help them grow, get funding, and reach markets.

Philippines

In the Philippines, groups like the Social Enterprise Network help connect people interested in social entrepreneurship. Universities also offer courses on the topic. Organizations like GKonomics International help develop social enterprises to build a new generation of producers.

Thailand

Social entrepreneurship is growing in Thailand. Universities host competitions for new social enterprises. Many groups focus on areas like agriculture, education, and tourism to create jobs and help communities. The Thai government also supports the creation of new social enterprises.

Europe

EMES (European Research Network)

EMES, a European research group, has a detailed way of defining social enterprises. They look at nine points, including:

• They produce goods or services.
• They are independent and run by citizens.
• They take financial risks.
• They have paid workers.
• Their main goal is to benefit the community.
• They are started by groups of citizens.
• Decisions are not based on how much money someone owns (often "one member, one vote").
• People who use their services are involved in decisions.
• Profits are mostly kept within the organization or used for its social mission.

European Commission

The European Commission also defines social enterprises. They say these businesses have a main goal of social impact, not just profit. They use their profits mostly for social objectives and are managed openly, involving employees and customers.

United Kingdom

In the UK, a social enterprise is defined as: "A business with primarily social objectives whose surpluses are principally reinvested for that purpose."

This means they are businesses that put their social mission first. Instead of giving profits to shareholders, they use the money to achieve their social goals, like educating the poor or helping disabled people find jobs.

Some well-known UK social enterprises include The Big Issue, which helps homeless people, and The Co-operative Group, a large business owned by its members.

There are tens of thousands of social enterprises in the UK, employing many people and contributing billions to the economy. Organizations like Social Enterprise UK support and promote them.

Community Interest Companies (CICs)

The UK has a special legal form called a community interest company (CIC). These companies are designed to benefit the community. They have rules that prevent profits from being taken out by owners, ensuring the money stays within the company for its social purpose.

Social Firms

A social firm is a specific type of social enterprise in the UK. It's a business created to provide jobs for people who have a hard time finding work in the regular job market.

Africa

Kenya

In Kenya, many social enterprises use business models to improve lives, especially in rural areas. For example, KOMAZA helps small farmers plant trees and sell them. Alive & Kicking makes sports balls, creating jobs in Nairobi. Even mobile money services like M-Pesa are seen as social enterprises because they help people with financial transactions.

Zambia

In Zambia, social enterprises often focus on creating jobs. Alive & Kicking also has a stitching center in Lusaka, making sports balls and employing local people. Zambikes makes bicycles, including special ones for ambulances, and trains mechanics.

Latin America

Chile

Chile is encouraging social enterprises to help with social inclusion and develop the private sector. The government is even working on a new law to define the rights and duties of social enterprises. They also offer programs to help social entrepreneurs get funding and support.

See also

In Spanish: Emprendimiento social para niños