Defining Social Enterprise

Defining Social Enterprise
05.08.10

This is the current UK Govt`s (cabinet office) definition of Social Enterprise:

“Social enterprises are businesses with primarily social objectives.  They principally reinvest their surpluses in the business or community for these purposes.  Unlike commercial business, they are not driven by the need to produce profit for shareholders and owners.

Social enterprises come in many shapes and sizes.  They range from small community-owned village shops to large charities delivering public services, and from individual social entrepreneurs to national businesses”

The world’s leading social entrepreneur Muhammad Yunus is more explicit – sees them as:

“Non-loss, non-dividend companies dedicated to meeting social needs – where the investor gets the investment money back over time, but never receives dividend beyond that amount.  All profits of the business go towards improving the product or service provided, and increasing its reach.”

The 5 Scottish Criteria for Social Enterprise (as co-ordinated by Senscot) are set out here http://www.senscot.net/docs/scottishcriteriajune10wb.pdf

Many businesses – privately owned or public sector subsidiaries – also meet social needs and a generic term would be useful to embrace all social businesses.