Social Enterprise: Negosyong Makalipunan (English Translation)

(Note: This is an English Translation of my article on Social Entrepreneurship which I posted here last January 29, 2014. I have done this for the benefit of you non-Filipino speakers around the globe who might chance upon this blog!)

Here is my first article about social entrepreneurship. Although we often  hear the term "social entrepreneurship," many of us still find its meaning quite vague or confusing. Even I myself who wants to be a social entrepreneur am still confused over its meaning as well. Sometimes I ask myself if I could already consider myself as a social entrepreneur since I purposefully make my products in my online business to be inspirational for young people. So I thought it best to study first the concept of social entrepreneurship and here I am sharing to you what I have learned so far.

Social Entrepreneurship: Definition

Social entrepreneurship is a way of establishing and operating an organization by using business approaches and principles but with the main objective of creating a positive change or providing solutions to the problems of a community, often with regard to its on the social, cultural, and environmental aspects. This concept can be used by philanthropists, social advocates, co-operatives, charities, and any other organization or individual with activities that aim to uplift a community. However, there is often confusion over  its definition especially with regard to the question on whether a social enterprise should be for profit or non-profit. Still, most people who are active in this work might agree with this description: If the main measure of a regular entrepreneur to find out if his business is successful is how much he earned or how great his profit is, the social entrepreneur (the founder or manager of the social enterprise) is concerned over how many or how much his enterprise was able to help. (Social Enterprise Canada)

Cherrie Atilano is the president of social enterprise Agricool, "a movement which dreams to build the lifestyle of healthy food consumption while creating agricultural opportunities in the Philippines." - See more at: http://gk1world.com/from-eco-warrior-to-eco-entrepreneur#sthash.0wmDRiVp.dpuf

Social Enterprise: Definition

Social entrepreneurship can be used in a non-profit organization because it involves the use of business  principles and strategies to solve social problems. Now “social enterprise” in itself is the very organization that is established using the strategies of social entrepreneurship to address social or global issues but this time, profitability is an important mechanism to achieve these goals. The social enterprise, thus, through its income generating business or trade activities should be able to provide good social impact in his community.

Differences between Non-profit Organization and Social Enterprise

A non-profit organization (NPO) aims to provide service to a community that has specific needs or to support an advocacy or groups who are working on  projects that will create favorable impact on society. The funds of an NPO often comes from donations given by private organizations, individuals, and the government. In contrast to social enterprises, an NPO does not need to develop activities to earn or generate funds, but sometimes they may also conduct fundraising projects and similar methods to raise additional funds for their operation or to create public awareness about their cause. Nevertheless, the main goal of a non-profit organization will always be to espouse  its advocacy. Members of NPOs may receive salary but many non-profit organizers or supporters are volunteers. However, although social enterprises are often likened to NPOs, social enterprises must have the capacity to earn. It should be self-sustaining in order to carry out its purposes. A social enterprise can also be established by an NPO, however its  operation must be separate from the NPO itself because a large part of its operations is related to activities concerning the financial aspects of the business. The NPO-run social enterprise cannot simply involve itself in charity works or advocacy campaigns unless the aim of such activities will serve as marketing activities resulting in more revenue for the social enterprise. Any private individual can also establish a social enterprise. He can be a sole proprietor who has a clear advocacy or has placed a socially relevant facet in his  business. He may also encourage his neighbors or the members of his community to put up a social enterprise or, form a cooperative, a known type of social enterprise. Therefore,  it can be deduced that a social enterprise is a mix of  profit and non-profit since the enterprise is established for profit, but the earnings are allocated not to increase the wealth of the organizers but to give support to the people in a community, service to those in need, or positive change in people or even the whole world.

Social Enterprise: Self-sufficient

A social enterprise may also receive donations just like NPOs. However, it is important for it to be able to stand on its own feet or be "self-sustaining" because its operation requires continuous funds in order to serve its selected community or advocacy. It is usual for social enterprises to employ workers from the community they serve. One of the main objectives of most social enterprises is to provide good and regular pay to their employees (who are members of the community that they serve) thus social enterprises cannot rely on donations alone. It is the priority of social enterprises to reinvest its earnings to the organization. The social entrepreneur earns only in accordance with  his/her role in the organization, similar to  how the workers’ wages are computed. Sometimes though, a social entrepreneur works for the enterprise pro bono because her only aim in working for a social enterprise is to help others and support a  cause (and that the social entrepreneur may in fact have another job or sources of income).  Social enterprises also welcome volunteers and participation from non-profit organizations and the government to ensure that they can properly serve the community they selected. But clearly social enterprises cannot rely on donations or grants.  A social enterprise should be a revenue-generating business.

Answer to My Personal Question

I believe that I am  not yet a social entrepreneur  although my goal in building an online business seems to include solving a particular social need. I have come to this conclusion because I have not yet found a concrete community that will benefit from my business. But this does not mean that my business is not good, only that today my business is still in an area of entrepreneurship that is different from social enterprise. Nonetheless, I would like to believe that my business is anchored on doing good and has a corporate social responsibility (CSR). (Later I will discuss what CSR is.) On the other hand, I have realized and thus would also like to emphasize that, in my opinion, not everyone should aspire to establish a social enterprise to become a good entrepreneur. It is already a great help to society when businesses provide employment for its people while engaging in trade with sound principles, noble intention, and fair practices.