What is a social enterprise?

The other day I mentioned to my friends that I have been getting involved in the world of social enterprises. Naturally, one friend asked “what’s a social enterprise?”  And before I could start off my philosophical speech on how social enterprise is something in between the public and private sector or even better, explaining that it’s really a clever way of using capitalism to address social issues, I got cut-off.  Another friend said “isn’t that about using the name of charity to make money?”

I can almost understand where that negativity comes from – it does seem perfectly good and honourable for a “for profit” company (which its sole purpose is to make money) to donate some of its profit for a social cause, but when it’s a company that is set out to address a social issue and it’s making money at the same time?  It does seem to go against conventional wisdom/thinking…

Regardless of the definition, these are my initial understanding of social enterprises:

1. The birth of a social enterprise is to serve a social purpose but once it is “born”, it’s the mindset of running an enterprise that keeps it going.  Yet, when it’s time to make tough decisions, the social cause should always prevail.

2. Social enterprise is really a label that is given by others.  And everyone has their own definition.  So it’s up to the founders of social enterprises to decide what they want to do with this “label”.  Are they going to be bound by what others think?

3. Social enterprise is not an excuse for not making the service/product awesome.  For example, people going to charity dinners don’t usually have high expectation of the food because the biggest reason why they attend is that they support the charity.  However, for social enterprises (say they are in the food industry), they need to make sure their food is of high quality (for their prices) and should never ‘rely’ on being a social enterprise so that your customers would expect less.

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