The social enterprise is a shining example of the fusion of social change and business savvy, put to work for a philanthropic purpose. Social enterprises capture the smarts and tactics of the big business world to provide great professional opportunities to those who need them the most. Social enterprises have the potential to deeply impact communities in a positive way, but what do they look like in action?
Social enterprises are businesses whose primary purpose is the common good. They use the methods and disciplines of the business world to empower people that normally wouldn’t succeed—or be given a chance—in the conventional realm of business. Social enterprises provide useful skills and job experience to those that lack a formal education or business experience.
As businessman and philanthropist George R. Roberts puts it in a recent article in the Wall Street Journal, “Social enterprises leverage a business approach to address a social mission, making improvements in human and environmental well-being, rather than maximizing profits for external stakeholders.”
Simply put, the three characteristics of a social enterprise include:
- Directly addressing a demanding social need and serving the common good.
- Business principles are used to acquire capital to fund their ventures.
- The primary goal of a social enterprise is to help others and serve the common good—making a profit is not the driving force.
Roberts’s ongoing charitable work illustrates just how powerful and effective philanthropic efforts that utilize social enterprise can be. He founded the Roberts Enterprise Development Fund (REDF) in 1997, and has since helped to empower thousands of individuals by helping them find jobs when they were in need.
Roberts’s REDF is the embodiment of social enterprises at work. REDF is a San Francisco-based and philanthropy-focused organization designed to to create jobs through social enterprises. REDF accomplishes this by providing equity-like grants (and other forms of business assistance) to California nonprofits that embrace the ideals of social enterprise. These nonprofits then intentionally employ the young and the underprivileged that desperately need job experience, but may find it difficult to achieve on their own.
If the concept of social enterprises spreads and becomes a common practice in our society, the entire world will benefit from the increased rate of philanthropic donations and organizations that would surely follow.