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'Social enterprise' is more than a buzzword

Written on Jun 13, 2019

By Jessica Salerno, OSCPA senior content manager

As the business world searches for ways to stay socially conscious, organizations might be too eager to label themselves as a “social enterprise” when they might not understand the meaning of the term.

Sheri_Chaney_Jones“When you really dig down deeper and ask people what it is or why they want to be a social enterprise, there's not much clarity,” said Sheri Chaney Jones, president of Measurement Resources Company.

She hopes to shed some light on what a social enterprise is and isn’t at the upcoming Not-For-Profit Conference in Cleveland. Her session is titled, “Is a Social Enterprise Right For You? Uncovering the Benefits and Challenges of this Social Impact Trend.”

The presentation will cover how social enterprises embedded within nonprofits can be effective for sustainability and considerations to remember when deciding to label your business as a social enterprise.

“A social enterprise is a concept where a particular entity, it could be a for profit model or nonprofit model, are generating social impact returns,” Jones said. “But they're also at the same time generating financial return.”

A popular example of a social enterprise is Hot Chicken Takeover, a restaurant that earns profits from food sales but also offers jobs to those who have faced homelessness, previous incarceration or other barrier to employment.

Social enterprise popularity has grown as board members see the benefit of generating revenue to sustain the organization while also creating social impact, Jones said. However, like many buzzwords, social enterprise can sometimes be misconstrued.

“You can have a for-profit business that chooses to donate some of its profits. But I don't think that model classifies as a social enterprise, because it's not embedded as part of its mission,” Jones said. “And at the same time, I don't think that it makes sense for every nonprofit organization to attempt to add social enterprise component to their business model if it takes them away from their core mission.”

Jones said the distinction of mission, high performance and fiscal high performance is key when defining a social enterprise.

“Consumers are going to start to question the social impact,” she said. “If you are going to claim that you are a social enterprise, you are going to have to have metrics in place to prove that you are actually making a difference. That will distinguish a social enterprise from a company that chooses to give back some of its profits.”

Hear more from Jones next week at the Cleveland Not-For-Profit Conference and register today.

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