What is Social Enterprise?

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There is currently no legal definition of a Social Enterprise.   Listed below are some definitions that can be applied to Social Enterprise.  Many organisations’ governance and activities may fit one or more of the definitions given below but they may nevertheless choose to describe themselves as a community organisation or as a business rather than as 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 profit for shareholders and owners” (Source - DTI 2002)
  • A Social Enterprise uses a business model to deliver its social aims, has no shareholders and invests all its profits back into the enterprise or community
  • A Social Enterprises is a commercially run, profit making organisation that is driven by social aims and the profits are reinvested into social, community or environmental objectives
  • A social economy enterprise operates like a business, produces goods and services for the market, but manages its operations and redirects its surpluses in pursuit of social and environmental goals
  • A Social Enterprise has six defining characteristics
    1. Having a social purpose or purposes
    2. Achieving a social purpose by, at least in part, engaging in trade in the market place
    3. Not distributing profits to individuals
    4. Holding assets and wealth in trust for community benefit
    5. Democratically involving members of its constituency in the governance of the organisation
    6. Being an independent organisation accountable to a defined constituency of beneficiaries and to the wider community