What is a social enterprise?

        

"A social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profits for shareholders and owners."

              

       [Government Publication, Strategy for Success, 2002]


There are some common characteristics that social enterprises display:
 
Enterprise Orientation - they are directly involved in producing goods or providing services to a market.
 
Social Aims - they have explicit social aims such as job creation, training or the provision of local services. They have ethical values including a commitment to local capacity building. Their profits are principally reinvested to achieve their social objectives. Increasingly social enterprises measure their social impact.
 
Social Ownership - many social enterprises are autonomous organisations whose governance and ownership structures are normally based on participation by stakeholder groups (e.g. employees, users, clients, local community groups and social investors) or by trustees or directors who control the enterprise on behalf of a wider group of stakeholders. They are accountable to their stakeholders and the wider community for the social, environmental and economic impacts.
 
The term "Community Enterprise" is often used to describe a social enterprise which works within and is accountable to a defined community - of place or of interest.
 
Social enterprises tackle a wide range of social and environmental issues and operate in all parts of the economy. By using business solutions to achieve public good, the Government believes that social enterprises have a distinct and valuable role to play in helping create a strong, sustainable and socially inclusive economy.
 
Social enterprises are diverse and operate in all parts of the economy. They include local community enterprises, social firms, and mutual organisations such as co-operatives and credit unions.
 
There is no single legal model for a social enterprise. They can be companies limited by guarantee or by shares, industrial and provident societies, some organisations are unincorporated and others are registered charities.