This blog post has been sitting in my drafts for almost two years now. I keep coming back to it every few months–questioning its relevance, comparing it to the rapid evolution of thinking about social enterprise that has taken place since I first wrote this, asking friends for feedback, and then deciding I’m not comfortable sharing it. While our thinking about what “social enterprise” means has certainly evolved over the past few years, there is still room to question its meaning and trajectory. More and more, I’ve been gravitating towards the notion of “organizational values” and away from entities and missions. I wrote a bit about that here, but I wanted to FINALLY share this post below, as a draft, open for feedback and improvement.
Readers: What do you think? What’s missing? Is this even relevant? Are organizations adopting these values, and would those that don’t traditionally think of themselves as social enterprises want to advertise themselves as such if they aligned with the framework below? Add in the comments or message me. I really want to hear what you think and have your help in shaping this concept further.
“That’s a non-profit, it’s not a social enterprise.” People make this comment all too often. The definition of the term “social enterprise” widely varies, but what is often most misunderstood is that social enterprises as entities can be for-profit, non-profit, or a hybrid, and I argue in this piece, even governmental.
We should separate the legal formation of social enterprise from the values and goals of social enterprise. Let’s think of social enterprise as a set of values for an organization. In this sense, social enterprise is a framework of values for change, and we can encourage all organizations to adopt this framework.
What is the social enterprise framework of values?
- Double or Triple Bottom Line: Social enterprises often pursue a double or triple-bottom line of combining positive economic, environmental, and social impact. Unilever, typically thought of as big business, strives to meet a triple bottom line of impact, and I would view it as a company setting an example for following the social enterprise framework.
- Meets a Social Need: Social enterprises use data from the market to inform what solutions could work best. Social enterprises shouldn’t be launched on the whims of the entrepreneur’s desire to be an entrepreneur, but because there is a real market or social gap that needs to be met, and that social enterprise is one of the only one addressing that need. And as my friend Ben Thurman explains, the social mission should never be forgotten.
- Sustainability in every sense of the term: Sustainability includes environmental and financial sustainability. But it goes beyond these components to include being designed around a community’s needs and capacities and being properly managed to allow for long-term operations. This article from SSIR describes the different models of sustainable funding for non-profits, while I’ve previously written about sustainability for long-term impact here.
- Management best practices: Social enterprises aim for great management and workplace culture, transparency with shareholders, donors, and partners, and accountability for stakeholders. While not every organization has achieved transparency and accountability, many of the best aim to do so. Indego Africa is an example of an organization I respect for their transparency.
- Sector-agnostic: One of the biggest strengths of social enterprises is that they take the best values and strategies from the for-profit, non-profit, and government communities. Yet, many still try to place social enterprises in one sector. Take as an example USAID’s new Global Development Lab, which seeks to leverages partnerships and the best resources and ideas from across sectors to develop and implement innovative solutions.
- New Approaches: Social enterprises experiment with new business models, hybrid organizational structures, and different approaches to achieve social change. These risky approaches eventually serve as inspiration for other organizations to follow suit.
This social enterprise framework encourages all organizations—non-profits and for-profits, governments, and hybrid models—to aspire to these values. Social change requires systemic change, and for systemic change we need cross-sector collaboration and sector-agnostic thinking and strategies.
The CEO of Mercy Corps seems to agree. In an interview, he noted: “In the private sector, you innovate or you die. You have to bring new ideas, new approaches, new products, more efficient services to the marketplace, or you don’t thrive. There’s nothing analogous to this in the social marketplace. That’s why social entrepreneurship is so promising: it brings together the systems, the methods, the reach, of both the public and private sectors to tackle these very difficult problems.”
By thinking about social enterprise as a framework as opposed to an entity, we remove prejudice about particular business models and focus more on embedding these values in all organizations, and encouraging collaboration among them.