What is a Social Enterprise?

social enterprise tree

Collective One, launching next month, is a social enterprise. “That’s great” I hear you say, “- but what is a social enterprise??”

There is no legal definition or structure for a “social enterprise” or “social business”. Australian specialist social enterprise development organisation, Social Traders, defines a social enterprise as an organisation that:

  • Is driven by a public or community cause, be it social, environmental, cultural or economic
  • Derive most of their income from trade, not donations
  • Use the majority of their profits to work towards their social mission

What is the difference between a Commercial Business and Social Enterprise? A commercial business exists to make profits for its owners and/or shareholders, whereas a social enterprise exists to make a positive impact on a social issue.

What is the difference between a Social Enterprise and a Non-Profit? A social enterprise uses commercial business strategies to create a financially self-sustaining business, trading in goods or services that fund activities to address a community need. It is not dependent on donations or government funding and grants. A non-profit relies heavily on volunteers, donations, fundraising, and government funding where available.

Social Enterprise

 

Generally, a social enterprise has one main social issue that it is established to improve – usually an issue that its founders have personally experienced. But in a world where so many need support and assistance, how do we choose where we want to make a social impact? Collective One was established as a social enterprise to assist rather than compete with other charities. We believe in using business acumen to run an organisation that is self-sufficient, that doesn’t have to rely on volunteers, donations and fundraising so that it can support the many different organisations that are already doing amazing work on the ground. Collective One encourages everyday people to be a part of something bigger – a community of heart-centred people who support the work of charities, with a simple and affordable purchase of a gift or product that they would likely buy anyway. Why not make a difference at the same as making a meaningful purchase?

 

If you’d like to know more about social enterprises, or innovative giving, we recommend the following:

Book:                Doing Good by Doing Good, by Peter Baines

Websites:       www.socialtraders.com.au; www.sse.org.au

TED Talk:       The way we think about charity is dead wrong – Dan Pallotta

About the Author

Shenoa Gittins

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