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These days we more often hear of organizations or businesses that classify themselves as so called Social Enterprises. At a fist glance this seems contradictory, where enterprises normally are understood to make a profit from the products or services they offer, while the adjective social refers to something that is communal, collective or public. So, what exactly is a Social Enterprise? A Social Enterprise may be defined as an organization that applies commercial strategies to maximize improvements in human and environmental well-being. This may include maximizing social impact alongside profits for shareholders. Social enterprises can be structured as a for-profit or non-profit, and may take the form of a co-operative, a social business, a benefit corporation, a community interest company or a charity organization. They can also take more conventional structures. What differentiates social enterprises is that their social mission is as core to their success as any potential profit. Many commercial enterprises would consider themselves to have social objectives, but commitment to these objectives is motivated by the perception that such commitment will ultimately make the enterprise more financially valuable. These are organisations that might be more properly said to be operating corporate responsibility programs. Social enterprises differ in that their commitment to impact is central to the mission of the business. Some may not aim to offer any benefit to their investors, except where they believe that doing so will ultimately further their capacity to realize their social and environmental goals, although there is a huge amount of variation in forms and activities.
In our own context I’d like to refer to a Social Enterprise as an enterprise that directly addresses social needs through their products and services or through the numbers of disadvantaged people they employ. This distinguishes them from “socially responsible businesses”, which create positive social change indirectly through the practice of corporate social responsibility.
Corporate Social Responsibility (CSR) refers to a business practice that involves participating in initiatives that benefit society. Sustainability is brought more into the core of business operations to create shared value for business and society. CSR can encompass a wide variety of tactics, from giving non-profit organizations a portion of a company’s proceeds, to giving away a product or service to a worthy recipient for every sale made. Broad categories of social responsibility that businesses are practicing include:
Environment: One primary focus of corporate social responsibility is the environment. Businesses, both large and small, have a large carbon footprint. Any steps they can take to reduce those footprints are considered both good for the company and society as a whole. We also see a great deal of pollution by plastic bottles and plastic bags. Is there a responsibility of companies that produce these items to help society deal with this and reduce this form of pollution?
Philanthropy: Businesses also practice social responsibility by donating to national and local charities. Whether it involves giving money or time, businesses have a lot of resources that can benefit charities and local community programs. What, if 5 cents from every bottle of water or soft drink sold, is collected in a fund to finance projects that provide clean water to communities or to schools or hospitals?
Ethical labour practices: By treating employees fairly and ethically, companies can also demonstrate their corporate social responsibility. Many workers do not eat well and suffer from under-nutrition, which will especially negatively impact expecting and young mothers and their children. Providing nutritious food in the workplace is a good example of taking corporate social responsibility.
There are different ways in which the private sector can take initiative and be involved in development and humanitarian activities, making financial support available and at the same time enjoying commercial advantage. While the economy is booming we all need to ask ourselves whether we continue accepting the poverty we see around us every day and expecting the government and donor organizations to do something about it? Or are we going to take social responsibility and do something about it as a business community?