By: Bryana Carroll, Associate, ICF
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Much has been said about the ‘organizational market approach’ of Social Enterprise Organizations (SEOs). Isn’t that just another way to say nonprofit? What sets this approach to employment barriers apart from others? How can this approach help those who have few job qualifications seek employment and continue on the path to self-sufficiency?
Social Enterprise Organizations (SEOs) use a profit-maximizing approach to solve society’s challenges and help improve individual and community well-being (Kerlin, 2006). Despite a range of activities, organizational structure, and target populations, all SEOs take a market approach to make a social impact.
Since the early 2000s, SEOS have made a growing impact in social enterprise. Here’s how: Removing Barriers to Self-Sufficiency
SEOs target hard-to-serve populations by offering opportunities such as employment, housing, or mental and physical health services. Various strategies such as workforce training, job placement, microfinancing, literacy resources, and offering affordable health services are just some of the approaches used by social enterprises in pursuing their missions. One of the most common social enterprises are the Work Integration Social Enterprises (WISEs) which focus on gainful employment for those with few job qualifications.
High U.S. Ranking
SEOs operate across the world, but recently, the Thomas Reuters Foundation recently ranked the U.S. as the best country to be a social entrepreneur/enterprise. Rankings were based off government support, ability to attract skilled staff, public understanding, ability to make a living, growth of these organizations, and access to investment. These conditions allow many U.S. based SEOs to emerge and become successful. When scanning for organizations engaged in improving employment outcomes for low-income populations, ICF identified 76 SEOs.
SEOs help by offering alternative social welfare solutions where traditional market forces underserve or overlook at-risk populations. SEOs are unique because they use capital investment to create a social benefit and revenue, which allows the organization to be self-sufficient. In fact, if the social enterprise is operating in a perfect framework, the organization should be completely financially independent. This is different from a traditional non-profit which relies heavily on grants and donations to continue to provide a social service that produces no additional revenue which can be returned to the organization.
Founded in 1902, a prime example of an SEO is Goodwill Industries – this SEO employs and provides job training to low-income people in an effort to provide economic self-sufficiency. In addition to helping employ individuals, Goodwill Industries also makes a positive environmental impact by creating a place where people can donate used goods, instead of the items ending up in a landfill. Goodwill Industries has over 2 million employees, generates $4.6 billion (86% of its budget) through its products and services, which allows the organization to be almost completely financially independent.
Social enterprises are a part of the solution to helping resolve social problems in the future. Traditional non-profits provide services that are vital to communities; however, with limited resources and populations continuing to grow, they are often not sustainable. Social enterprises can provide the same services, but incorporate revenue- generating areas, which is funneled back into the organizations, allowing greater long-term self-sufficiency. Many believe this may be a self-sustaining solution to employer barriers.