One of the first major questions that a social entrepreneur has to answer is whether they intend to house their enterprise within a non-profit, for-profit or hybrid form. Embedded below is a while paper on the different legal forms available to social entrepeneurs.
In addition to the white paper above, SiG staff have produced numerous articles about and for social entrepreneurs. One such article appears on the MaRS Entrepreneur’s Toolkit and is called Being a social entrepreneur. This article explains at a high-level the difference between for-profit social purpose businesses and non-profit social enterprises. Below is an excerpt describing the latter.
Social Enterprises (SEs) – Social entrepreneurs from the non-profit and voluntary sector are setting up this type of organization to become more self-sufficient and financially sustainable, but also to enhance their social mission and increase their impact. Social enterprises are revenue-generating entities generally owned and operated by a non-profit organization (which may or may not also have charitable status). Since there are no shareholders, any profits from the operation are re-invested into the work of the organization.
The article goes on to discuss for-profit social purpose businesses.
Since social entrepreneurship is an emerging field, you will find some definitions for social enterprises that include for-profit businesses, but here at MaRS, we reserve the term to describe our non-profit social ventures.
Social Purpose Businesses (SPBs) – Social purpose businesses are commercial for-profit entities, created by social entrepreneurs to address social issues. SPBs maintain their social purpose at the core of their operations, while existing in the market economy and delivering shareholder value. Many successful examples can be found internationally focused on a range of societal challenges, ranging from environmental impacts through clean technology organizations to poverty reduction through microfinance initiatives like the Grameen Bank.
SPBs are also often referred to as having double or triple-bottom-lines referring to social and/or environmental benefits, in addition to traditional profits.
While the successful cases studies are all helpful in understanding the landscape of social entrepreneurship, SiG also sees the value in examining unsuccessful efforts in social entrepreneurship. The story of Vartana Bank is one such story. Vartana was going to serve as a bank for charitable organisations. As the article below details, the social enterprise ran into more than a few roadblocks along the way.
Social entrepreneurship is a fascinating field with many opportunities as well as pitfalls. Additional resources to research are the archives of the Stanford Social Innovation Review as well as the Ottawa-based Technology Innovation Management Review. David Bornstein’s seminal book How to Change the World: Social Entrepreneurs and the Power of New Ideas is also an excellent resource. We encourage you to continue your dive into social entrepreneurship by following the #socent hashtag on Twitter.
SiG has also contributed a number of practical articles to the Entrepreneurs Toolkit on the MaRS website. Explore those now.
Note: A complete list of all SiG educational resources can be found in our publicly-available document library. We hope you’ve found this pathway to learning in social entrepreneurship helpful.