Critics often question if these kinds of for-profit ventures are really creating social value-how can we differentiate PR measures and greenwashing from tangible change? Compounded with the fact that “impact” is a long-term goal, social enterprises are challenged about how they can measure such outcomes. Because “social enterprise” is a paradigm rather than a legal structure, its understanding is a bit murky, and an entity’s overall impact can be hard to qualify or quantify. However, social enterprise is not without critique. And while there are many ethical businesses out there focusing on responsible sourcing, safe and fair working conditions, and eco-friendly production, social enterprises take it a step further to make “impact” the bottom line. Some create job opportunities for those in need or make clean water more accessible. In addition, instead of sharing profits with shareholders, a social enterprise-like Grameen-reinvests profits back into its mission. A successful social enterprise balances upholding the social mission of its organization and maximizing the productivity of its business venture to ensure sustainability. Unlike most nonprofits which rely on grants and donations, social enterprises embrace financial support and for-profit opportunities to earn more sustainable revenue.
Today, some of the most well-known social entrepreneurs include Muhammad Yunus of Grameen Bank and Jacqueline Novogratz of Acumen, a social enterprise working to eradicate global poverty, though the field is quickly growing and diversifying. While the terminology is newer, the concept of social enterprises started with “cause marketing” in the 1970s, primarily in the United States (though many similar business models existed before that).
(Plus, it makes the brownies for Ben & Jerry’s-what’s not to love?) Proceeds from this certified B Corp support its sister foundation, Greyston, investing back into the local community. Social enterprise models are a smart, savvy way to combine the best of traditional nonprofits and traditional businesses.įor example, Greyston Bakery is a for-profit company with an open hiring policy, often employing formerly incarcerated individuals. Put simply, a social enterprise is a cause-driven business improving social objectives and serving the common good.
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