What is a Social Enterprise?

The text books call a Social Enterprise "a profit-making venture set-up to tackle a social need". Many commercial businesses might consider themselves to have a social objective, but a Social Enterprise is unique because their social purpose is central to what they are. Rather than maximising shareholder value, their aim is to generate profit to further their social purpose.

Some commentators describe this as "not-for-profit" as their profits are not distributed to financial investors, this is a little misleading as it implies they are unbusiness-like. It is better said that profits of the business is used to support its social aim or that the business itself accomplishes the social aim through its operation.

However, there are some misleading interpretations of the term "Social Enterprise" particularly new businesses who try to ride a wave of popular support for Social Enterprises in the community. However, despite the owners best motives and goals to establish a business based on meeting social outcome they can't truly be called a Social Enterprises as there is no binding or legal structures to ensure their profits continue to support that social purpose long-term and so it is best to discriminate between what is a "socially responsible business" and a Social Enterprise.

Consequently, Social Enterprises must have a legal structure that ensures the long-term support of its social purpose. For example: a collective where the owners are a disadvantaged group; an "Incorporated Association" or "Limited by guarantee" company where the social purpose is enshrined in their constitution disallowing profits to be syphoned away for other purposes.

SA Group Enterprises as a specialist supported employment service for people with disability our social enterprise model also combines the principles of social role valorisation. Our aim is to create viable businesses in mainstream commercial sectors that operate and promote themselves as highly competent businesses, which employ skilled personnel. This not only ensures the business develops and has the expertise to offer quality products and services, but also provides valued employment for people with disabilities who work with and alongside others in an integrate workplace.