By: Courtney Barthle, Director of Social Policy & State and Local Projects
The historic notion that the socioeconomic landscape is made up of three distinct sectors – public, private, and nonprofit – that each operate according to a unique and particular set of rules and philosophies is being challenged by the rise of social enterprise and social entrepreneurship. According to these models, organizations across sectors are:
- Able to apply effective market-based approaches to core operational and service delivery challenges;
- Not isolated actors occupying one-third of the landscape but institutions embedded in and responsible for human growth and excellence; and,
- Potential agents of change.
Recent data – while not representative of this vast and unique set of organizations – suggest that social enterprises, defined in this blog as efforts that use market-based principles to solve social challenges – tend to be small in both revenue and employee size, domestically focused, and – at least for those that responded to the Social Enterprise Census – a relatively even mix of for- and non-profit organizations.
While many definitions would exclude these for-profit organizations, a growing recognition that for-profit companies can be agents of social change through both internal and public-facing actions has taken hold. For profit companies are recognizing the importance of social impact to their workforce – according to the Deloitte 2018, 77% of respondents cited social impact as important or very important. The education sector echoes this trend as socially focused MBA degrees are offered at such prestigious programs Duke’s Fuqua School of Business’ Center for the Advancement of Social Entrepreneurship, University of Pennsylvania’s Wharton School of Business in partnership with the school’s School of Social Policy & Practice, and Yale’s School of Management’s Program on Social Enterprise.
For human services organizations, these burgeoning trends – 30 percent of social enterprise organizations are less than 10 years old (Census) – offer not only a pool of candidates trained in both business administration and social change but a pathway to a new way of advancing their missions. By creating income-generating activities, organizations have the potential to diversify their funding streams, decreasing reliance on grants and private donations. While those legacy funding sources are important and should be maintained, the fiduciary independence that comes with self-generated income fosters flexibility and sustainability, two things often in high-demand in the social/human services and nonprofit spaces. .
Organizations interested in learning more about the social enterprise research base can:
- Visit the Self-Sufficiency Research Clearinghouse to view the literature on SEOs;
- Review the Office of Family Assistance’s recent PeerTA listening session on social enterprise, and;
- Register for the March 20 CAP Webinar Wednesday where my colleague, Dr. Kristin Abner, and I will be presenting on how to translate the current research on social enterprise into human service action.