Explainers
What is a social enterprise?
Social enterprise is a broad label for businesses that put a social or environmental goal on equal footing with profit. What it usually means and how to read it.
A social enterprise is a business that exists to address a social or environmental problem and uses commercial revenue, rather than only donations or grants, to do it. Unlike B Corp or benefit corporation, the term has no single legal definition in the United States, so it covers a wide range of organizations.
What usually falls under it
- Nonprofits that run a business to fund their mission, such as a thrift store or a training program that sells services
- For-profit companies whose product is the mission, such as a company that hires people leaving incarceration or that sells clean cookstoves in developing markets
- Hybrids, where a nonprofit owns a for-profit subsidiary
How it differs from a B Corp
A B Corp has been assessed and certified by B Lab. A social enterprise may or may not have any outside verification. Some social enterprises are also B Corps; many are not.
How to read the label
Because the term is loose, the useful questions are practical ones:
- What problem is the company trying to solve, in one sentence?
- How does the business model connect to that problem?
- Who checks whether it is working?
A company that can answer all three clearly is usually the real thing.
Why it matters when you're job hunting
Social enterprises often sit between the nonprofit and for-profit worlds, which can mean nonprofit-style pay with for-profit-style hours, or the reverse. Ask about compensation and workload directly. The mission does not tell you either.