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A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being—this may include maximizing social impact alongside profits for co-owners.

Social enterprises can be structured as a for-profit or non-profit, and may take the form (depending on in which country the entity exists and the legal forms available) of a co-operative, mutual organization, a disregarded entity,[1] a social business, a benefit corporation, a community interest company, a company limited by guarantee or a charity organization. They can also take more conventional structures.

Social enterprises have both business goals and social goals. As a result, their social goals are embedded in their objective, which differentiates them from other organizations and corporations.[2] A social enterprise's main purpose is to promote, encourage, and make social change.[3] Social enterprises are businesses created to further a social purpose in a financially sustainable way. Social enterprises can provide income generation opportunities that meet the basic needs of people who live in poverty. They are sustainable, and earned income from sales is reinvested in their mission. They do not depend on philanthropy and can sustain themselves over the long term. Their models can be expanded or replicated to other communities to generate more impact.

A social enterprise can be more sustainable than a nonprofit organization that may solely rely on grant money, donations or federal programs alone. As a for-profit model, you control the curriculum and funding of the program. The incentives of the company are designed such that greater impact directly correlates to a great profit. Investors and business partners today want to know that the companies they choose are doing more than just providing a product or service. They look for companies that are doing good. They will feel a special connection to companies whose values align with their own.[4]

The original concept of social enterprise was first developed by Freer Spreckley in 1978, and later included in a publication called Social Audit: A Management Tool for Co-operative Working published in 1981 by Beechwood College. In the original publication the term social enterprise was developed to describe an organisation that uses Social Audit. Freer went on to describe a so

A business with primarily social objectives whose surpluses are principally reinvested for that purpose.

The original concept of social enterprise was first developed by Freer Spreckley in 1978, and

The original concept of social enterprise was first developed by Freer Spreckley in 1978, and later included in a publication called Social Audit: A Management Tool for Co-operative Working published in 1981 by Beechwood College. In the original publication the term social enterprise was developed to describe an organisation that uses Social Audit. Freer went on to describe a social enterprise as:[52]

triple bottom line. Freer later revised the Social Audit in a more structured way.[53]

Twenty year

Twenty years later Spreckley and Cliff Southcombe established the first[54] specialist support organisation in the UK Social Enterprise Partnership Ltd. in March 1997.

In the British context, social enterprises include community enterprises, credit unions, trading arms of charities, employee-owned businesses, co-operatives, development trusts, housing associations, social firms, and leisure trusts.

Whereas conventional businesses distribute their profit among shareholders, in social enterprises the surplus tends to go towards one or more social aims which the business has – for example education for the poor, vocational training for disabled people, environmental issues or for animal rights, although this may not always be the case.[55]

Social enterprises are often seen as distinct from charities (although charities are also increasingly looking at ways of maximising income from trading)[56] and from private sector companies with policies on corporate social responsibility. An emerging view, however, is that social enterprise is a particular type of trading activity that sometimes gives rise to distinct organisation forms reflecting a commitment to social cause working with stakeholders from more than one sector of the economy.

Three common characteristics of social enterprises as defined by Social Enterprise London are:

A survey conducted for the Social Enterprise Unit in 2004 found that there were 15,000 social enterprises in the UK (counting only those that are incorporated as companies limited by guarantee or industrial and provident societies). This is 1.2% of all enterprises in the UK. They employ 450,000 people, of whom two-thirds are full-time, plus a further 300,000 volunteers. Their combined annual turnover is £18 billion, and the median turnover is £285,000. Of this, 84% is from trading. In 2006, the government revised this estimate upwards to 55,000, based on a survey of a sample of owners of businesses with employees, which found that 5% of them define themselves as social enterprises.[57] The most up to date estimates suggest that there are approximately 68,000 social enterprises in the UK, contributing £24 billion to the UK economy.[58]

Using the EU definition of social economy, the annual contribution of social enterprises to the UK economy is four times larger at £98 billion[59] because it includes the contribution of all co-operatives, mutuals and associations that produce goods or services to improve human well-being.

Every two years, Social Enterprise UK carries out and publishes the findings of the state of social enterprise survey, the largest piece of research looking at the UK's social enterprise sector. The most recent report, The People's Business, details the findings of the 2013 survey.

Bodies

The first agency in the UK—Social Enterprise London (SEL)—was established in 1998 following collaboration between bodies supporting co-operative enterprise. SEL did more than provide support to emerging businesses: it created a community of interest by working with the London Development Agency (LDA) to establish both an undergraduate degree in social enterprise at the University of East London and a Social Enterprise Journal (now managed by Liverpool John Moores University). SEL built a network of over 2,000 social enterprises and social entrepreneurs, directly brokered over 500 social enterprise jobs under the DWP's Future Jobs Fund and delivers consultancy and business support across the world in countries including Vietnam, Korea and Croatia.

The national membership and campaigning body for the social enterprise movement in Britain is Social Enterprise UK (SEUK) (previously the Social Enterprise Coalition),[60] and this liaises with similar groups in each region of England, as well as in Northern Ireland, Scotland and Wales. S

Using the EU definition of social economy, the annual contribution of social enterprises to the UK economy is four times larger at £98 billion[59] because it includes the contribution of all co-operatives, mutuals and associations that produce goods or services to improve human well-being.

Every two years, Social Enterprise UK carries out and publishes the findings of the state of social enterprise survey, the largest piece of research looking at the UK's social enterprise sector. The most recent report, The People's Business, details the findings of the 2013 survey.