Social enterprise, also known as social entrepreneurship, broadly encompasses ventures of nonprofits, civic-minded individuals, and for-profit businesses that can yield both financial and social returns.
One example of social enterprise is an earned income venture. By selling goods or services, a traditional 501(c)(3) nonprofit organization can diversify its funding base while providing positive impact in the community.
Fieldstone Alliance's worksheet can help you assess whether you have the capacity and readiness to launch such a venture.
The concept of social enterprise also applies to for-profit ventures with a strong social bottom line. One emerging type of organization that puts mission first and profits second is the low-profit limited liability company (L3C). As for-profit organizations, L3Cs pay taxes on profits and can't receive traditional grants or tax-deductible charitable contributions, like 501(c)(3) public charities can.
However, private foundations can make program-related investments (PRIs) to L3Cs through an expedited review process by the IRS. Legislation is still pending in many states on this new legal structure, but L3Cs formed in states that have approved it can do business in other states.
Another developing type of organization, a benefit corporation, is a for-profit entity created with the purpose of providing a general public benefit. Benefit corporations are required to submit an annual benefit report outlining the impact of their activities, and, in contrast to traditional corporations, their directors are permitted to place community and environmental considerations above financial gain in their decision making.
The legal structures for benefit corporations have been formalized in Maryland and Vermont, and legislation is pending in several additional states. For more information, see the B Lab website. Benefit corporations should not be confused with "Certified B Corporations," which are recognized independently by B Lab.
Please see our related Knowledge Base articles:
Social Enterprise Typology
Virtue Ventures
This typology breaks down the traditional boundaries between the nonprofit and private sectors and draws definition to this new institutional animal--part business-part social--the social enterprise.
Provides information and convenes conferences for charities and businesses interested in operation in a socially responsible and environmentally sustainable way.
Stanford Social Innovation Review
The Stanford Social Innovation Review offers strategies, tools and ideas for nonprofits, foundations and socially responsible businesses.
Short- and Long-Term Approaches to Finding New Revenue Sources
Fieldstone Alliance
Tips and techniques for conducting a feasibility study and market research on your target audience before launching your venture idea. NOTE: This is an archived version of the original page.
10 Free Things Every New Social Entrepreneur Should Have
Stanford Social Innovation Review
An article providing 10 useful tips for social entrepreneurs.
SCORE, Mentors for America's Small Businesses
A national association that can give you a personal business coach to help you with every step of your business. SCORE has offices in each state and 24/7 online advisors.
StartSomeGood: Igniting Ideas, Investment & Impact.
StartSomeGood is a peerfunding site - a platform for social entrepreneurs to gather a community and raise the funds needed to create change. Designed by social entrepreneurs for social entrepreneurs.
Membership organization provides multiple resources about social enterprise: digital library of research, publications, and articles; surveys; listserv; and more.
Institute for Social Entrepreneurs
Provides seminars and training, resources and downloads of information for social enterprises around the world.
Social Enterprise business models
MaRS Discovery District
Explore different business models that will allow you to deliver social value to your customers, including fee-for service, employment, market linkage, or service subsidization.