Take a closer look at what defines a social enterprise
A social enterprise is
Social enterprises are organizations that use business strategies to achieve a social, cultural, or environmental mission. Alongside generating revenues through the sale of goods and services, social enterprises simultaneously intend to create a positive impact and measure results in doing so. As the business of a social enterprise grows, the social impact is expected to grow.
The organization derives a substantial portion of its income through the sale of goods and/or services.
The organization intends to create a social or environmental impact through its business activities. The impact is intentional and not merely a by-product of business operations.
The organization has a blended business model, with social impact as a defining element of its business model. The social and/or environmental impact of the social enterprise grows in lockstep with its business growth.
But not every business is a social enterprise
Social enterprise is MORE than
A socially responsible business seeks to ensure that it operates in an economically, socially and environmentally sustainable manner (a ‘do no harm’ approach).
A social enterprise goes above and beyond the focus of operating in a sustainable manner. Instead it seeks to actively contribute to solving a key social, environmental or cultural societal issue by generating revenue for the sake of expanding the impact of its social, environment and/or cultural mission.
While maximizing profit is an important aspect of a social enterprise, because the more profit it makes the more it can invest back into the mission, it is not its primary focus.
The primary focus of a social enterprise is expanding the impact of its social, environment and/or cultural mission.
Selling Fair Trade products in and of itself is not sufficient to be a social enterprise. The business must go beyond the selling of Fair Trade products. For example, establishing direct relationships with producers who are suppliers of the product, or employing or supporting a vulnerable or marginalized population in the local community through the business activities of the enterprise.
As a social enterprise, the business itself creates a social or environmental impact with a substantial portion of its profits going back into the business to grow the impact of the mission. A charitable donation is not a core function of a business.