Social Enterprises are organizations that blend their business between financial and social returns on investment. The social needs are often charitable and philanthropic ventures that range from environmental, community, and cultural programs to relief aid and sustainability projects. However, these social objectives are intermingled with a business purpose to make money and thus are structured most often as a for-profit company, although non-profits exist as well. The main difference between a regular enterprise and a social enterprise is that the profits gained are not benefits for the company’s shareholders, but rather the social issue the company has adopted.
Blended Return on Investment
Traditionally, non-profits seek a high yielding social return on investment and commercial enterprises seek high yielding financial return on investment. Social Enterprises look to blend both social and financial ROIs in attempts to raise social awareness and aid to their cause, and to funnel monetary support to both the company’s growth and social issue as well.
Social Entrepreneurs differ in their vision in comparison to business entrepreneurs. They believe that the primary purpose of the enterprise they create should focus on a social issue; that their products and services directly address social issues. This is opposite to most commercial enterprises where social objectives are indirectly addressed whether through charitable donations or gestures to social causes.
Financing Social Enterprises
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