Three Challenges in Social Enterprise
Social enterprise is the current buzzword for profitable revenue-generating services or products that also address an important societal need. More formally, a social enterprise is an organization or line of business that uses commercial strategies to maximize improvements in human and environmental well-being. It can be a nonprofit or for-profit organization. It demonstrates its dual objective by producing a blended return of financial profit and measurable social impact.
To foster more social enterprises, our community must address three challenges.
The first challenge is to convince nonprofits and the general public that social enterprise, and the profits it brings, are essential to supplement philanthropy if nonprofits are to sustain their mission services.
The second challenge is to provide the expertise and support so that nonprofits can develop business plans and pro formas to evaluate the commercial viability of their ideas.
The third challenge is to provide the investment capital to finance these social enterprise start-ups at the scale necessary for them to achieve their financial and social impact potential.
There is good progress on the first two challenges. The third challenge remains: how to bring capital to our local projects when most social investment (70%) goes to third-world countries. They certainly need support. But we also need to provide capital in our own backyards.