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Re: Defining SE?

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  • Rolfe Larson
    Well, the conversation continues on what it is ah, to be, or not to be, a social enterprise. For the moment, that is the question. Interesting to some, and,
    Message 1 of 1 , Jun 26, 2012
      Well, the conversation continues on what it is ah, to be, or not to be, a social enterprise. For the moment, that is the question.

      Interesting to some, and, well, probably not so much to others. With this posting, we'll call this defining moment to an end.

      Here are the responses to David LaPage's comments on this topic:

      "What do we really mean when we discuss social enterprise? We know for a fact that there is no legal business form that is called social enterprise. We also know, from scanning the major social enterprise sites, that there is no common international definition.

      [David's list of definitions at: http://finance.groups.yahoo.com/group/npEnterprise/message/3744 ]

      Despite the differences however, there are common themes across all definitions. they are businesses; they create community impacts and social values; and they limit or don’t have distribution of profits and assets to individual share holders. So rather than a defined thing, social enterprises are much more a means to achieve value, they are a verb, not a noun. Social enterprise is why rather than what!"

      [Earlier posting on definitions: http://finance.groups.yahoo.com/group/npEnterprise/message/3743 ]

      (1) From John Pepin [one of our many subscribers from the UK]

      I take a very simple approach. The mission is key and social enterprise is a commercial means to achieving the mission.

      There are variety of models (see Venturesome): ones that maximise profits for investors while achieving impact e.g. see examples on our web site http://www.aperio-group.com . Others focus on mission without necessarily maximising profits (e.g. social firms); and a third category where the mission impact is maximised alongside profit maximisation (e.g. cooperatives).

      (2) From: David Weisberger <djweisberger@...>

      In response to Jim Harrity's original request for sources:

      Check out Kathy Brozek's excellent analytical article entitled "Exploring the Continuum of Social and Financial Returns", from the 2009(?) Federal Reserve Bank of San Francisco's Community Development Investment Review.

      [Editor's note: http://www.frbsf.org/publications/community/review/vol5_issue2/brozek.pdf ]

      To join the general conversation on definitions:

      Since, as has been pointed out by several contributors, there is no formal or consensus meaning of "social enterprise", generally I find the benefit of the term in the people it throws together. If you are struggling with running a successful business with a social mission, you benefit from talking with other people addressing the same tensions, regardless of their legal structures, financial distribution models etc. Excluding people by definition may serve a very limited purpose, inasmuch as it helps guide public policy decisions, but runs a high risk of cutting us off from each other and the mutual exchange and advice we need to share in order to grow this tiny sector.

      (3) From Jerr Boschee

      Nice work, David . . .

      Although I will still quarrel with your statement that "they limit or don't have distribution of profits and assets to individual share holders."

      Some social enterprises in the private sector do not formally "limit" distribution of profits to individual share holders. To use Kevin's language, they may have certain values "baked into" the way they do business, but that becomes an "informal" limitation on profitability per se, not a formal limit on distribution of whatever profits are generated.

      For example, Tom Triplett and I had a long conversation about whether Medtronic is a social enterprise. He was closely associated with the company during its formative years. I believe strongly that it is -- a lot of people who once worked for me wound up in later years at Medtronic -- and Tom eventually agreed with me.

      Of course, not EVERY private sector business that claims to be a social enterprise deserves the phrase, if they do indeed maximize profits at the expense of their social mission. The challenge is always to decide which ones qualify and which ones don't.

      And that's a challenge I'll leave to my betters to address.

      (4) From Michelle Rock

      Social Enterprise can be not-for-profit or for-profit entities that have a ‘social’ mission. It is the word “ social’ that perhaps needs to be clarified. However, in my experience, organizations that have a social mission are focused on the betterment of community, not just the creation of revenue.

      (5) From Tom Aageson

      Excellent point. When the Social Enterprise Alliance went to the common good, while true, it jumped into the kettle with other organizations whose intentions are the same as social enterprises. This is the ultimate goal of government and religion...the Common Good, the Greater Good.

      (5) From Drew Tulchin

      Regarding how to define a social enterprise, here is an interesting article
      about SEs in the non-profit landscape, published by the National Executive
      Service Corps (NESC) - "Social Enterprise's Expanding Position in the Nonprofit
      Landscape." -
      http://nesc.org/download/social-enterprises-expanding-position-in-the-nonprofit-\
      landscape.pdf

      Also, here is a link to the Greyston Bakery website
      (http://www.greystonbakery.com/). The Bakery is a great example of a social
      enterprise in NY that has become a `benefit corporation' (B Corp), taking
      advantage of a new corporate structure that accommodates for-profit entities
      whose social benefit purpose is central to their existence.
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