Social enterprises are businesses whose profits are used to help people or the community. They try to make positive changes in society or the environment and are usually started by entrepreneurs who want to make a difference. Social enterprises are different from traditional businesses because they put social and environmental goals ahead of making money.
There are two main types of models for social enterprises: those that make money and those that don’t.
Social enterprises that make money are like regular businesses, but the money they make goes to help people or the environment. They can be set up as a corporation, a limited liability company (LLC), or a cooperative. Warby Parker, which sells glasses and gives a pair to someone in need for every pair sold, and TOMS Shoes, which gives a pair of shoes to a child in need for every pair sold, are both examples of for-profit social enterprises.
Non-profit social enterprises are businesses that are set up as non-profits and use the money they make to help people or the environment. They are usually set up as NPC organisations and can get money from people, businesses, and foundations. The Grameen Foundation and the Kiva Foundation are two examples of non-profit social enterprises. The Grameen Foundation gives microloans to the poorest people in the world to help them start businesses. The Kiva Foundation gives microloans to entrepreneurs in developing countries.
People are looking for ways to use their money to make the world a better place, so social enterprises are becoming more and more popular. Both for-profit and non-profit social enterprise models have the potential to help society in meaningful ways and make changes that last.