A definition of a social enterprise

Short Version 

Social enterprises are social mission driven organizations that apply market-based strategies to achieve a social/environmental purpose.

Broad Version 

A Social Enterprise organization is a citizens’ or community innovative initiative that is created in order to achieve social or environmental goals or benefit the community. It is doing so by engaging in commercial activities (the selling of products or services) in a market-driven orientation, striving to be profitable so that the entity can sustain itself on this basis. Those products or services and/or the process of producing them express the enterprise's social mission. The profits of the enterprise's commercial activities are invested in advancing the purposes for which it was created; the owners of the enterprise, who have invested the capital that enable its existence, are entitled to receive back their investment, sometimes with a limited profit. In pursuing its commercial and social goals the enterprise does not engage in abusive or exploitative practices vis-à-vis its clients/workers, customers or suppliers. The organization’s governance system reflects its community and social orientation as it involves stakeholders in decision-making processes in different aspects of the enterprise's work

 

The definition stands on three major bases:

1. A social or environmental goal/objective, which is the raison d'être for its existence

2. A commercial activity entailing sales of products or services in order to reap profits that will ensure the sustainability of the enterprise. This activity is based on 3 principles:

  • The products the enterprise produces or services it provides and/or the process of their production/provision express the social goals of the entity
  • The profits of the commercial activities are invested towards promoting the goals for which the entity was established. The owners/investors are entitled to receive back their investment, sometimes with a limited profit
  • The enterprise pays its employees decent salaries, provides them with appropriate working conditions and does not engage in abusive practices vis-a-vis its workers/clients, customers or suppliers along the entire business chain.

3. A governance system that involves different stakeholders in the process of decision-making so as to accentuate the social and community orientation of the enterprise.

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