Key Term

What is Social Enterprise?

Definition

A social enterprise is a business organization that combines commercial strategies with social impact objectives. These entities operate by selling goods or services in the market to achieve both financial sustainability and specific social, cultural, or environmental goals. Unlike traditional nonprofits, social enterprises generate their own revenue while pursuing their mission, rather than relying solely on grants and donations.

Significance

Social enterprises represent a crucial bridge between traditional business and charitable giving, offering donors and philanthropists an alternative way to create sustainable social impact. They demonstrate how market-based solutions can address social problems while generating financial returns, making them attractive to impact investors and strategic philanthropists. This model is particularly significant as it promotes self-sufficiency in the charitable sector, potentially creating longer-lasting social change than traditional donation-based approaches. For donors, supporting social enterprises can multiply the impact of their giving by helping to build sustainable organizations that continue to generate social benefits well beyond the initial investment.