Types of social enterprises

A social enterprise is nothing more than a project of a company or organization with or without a profit motive that aims to improve the community in which it is inserted. There are different types of social enterprises; here are the most important ones.

First, a brief overview of the essential qualities of a social enterprise. In addition to the social, ethical, environmental and also financial purpose, it is distinguished by its form of action. Despite not having as a central objective the generation of profits, it uses a strategic market model to achieve its ends.

In other words, it acts as a company, but intends to contribute to solve a social problem. Of course, it needs resources to subsist, so it sells goods and services without this being detrimental to its nature.

What types of social enterprises are there?

Although a high level of social awareness predominates in all of them, the truth is that notable differences can be perceived between the different types of social enterprises. These are the types that can be found the most:

Professional entrepreneurship

In this first case, we include the experts who devote their knowledge and skills to solving a lack or problem in a community. They can be part of their own enterprise, of an organization or even of a private project; what distinguishes them is their aptitude.

For example, we can talk about a psycho-pedagogue who offers activities for children and young people in a deprived neighbourhood, or an organisation or company that has a professional in hygiene to give training talks in schools and public entities.

Awareness Raising Enterprise

You probably run into them more often than you think. These ventures are made up of people with very strong ideals, who seek to convince and persuade others of their arguments to change a certain behavior or lifestyle.

Here we could cite as an example the environmental groups, who do not intend (mostly) to sell a good or a service, but seek to drive a change to improve the sustainability of resources and quality of life on the planet.

Social entrepreneurship born of a private

When a soft drink company decides to give its customers a discount for taking a used bottle to be recycled later, we are in the presence of a social enterprise of this third type.

The characteristic here is that a company is dedicated to doing good directly to society, but its employees or customers do not necessarily have to share it. They are simply ‘secondary’ actors in the process, as they may even disagree with or not be interested in the social action that their employers promote.

So, you don’t try to convince, but offer a benefit to someone to contribute to the cause. The same applies to workers involved in production: what is sought from them is effectiveness in achieving objectives. Of course, a balance is needed; the stronger the social impact, the lower the financial return.

Entrepreneurship dependent on a corporate model

In this type of social enterprise, it is not the organization that produces its own resources and at the same time benefits the community, but it receives contributions from a company, as a form of sponsorship.

This would be the case, for example, of a multinational fast food company that advises and finances a non-profit organization for the construction of housing in low-income areas.

In this case, the purpose of the company is none other than economic gain, while the social purpose is fulfilled through collaboration with a second party involved in the process. This is a model that is often seen today.

Other classifications

What we provide above is a classification according to the organization of the social enterprise and its nature. However, we can also divide them according to other criteria, such as the origin of the idea.

Was the problem first found and a venture chosen to combat it, or was the first action decided and then a theme chosen?

We could also differentiate between a social enterprise of innovation or one of resolution of a need. The first, more research-oriented, will seek new methods or theories to address an issue; the other, on the other hand, has the mission of creating the means to solve a problem, or to resort to others already tested.

Finally, it is possible to divide them according to the type of funding (public or private), or even by the number of participants (individual or collective). Of course, this classification is not exhaustive and can accept other forms of differentiation.

Beyond the differences, no one model of social entrepreneurship is better than another. In the end, everything will depend on the management, resources and capacity of the professionals involved in the process. All, however, contribute to a fairer world with better conditions for its inhabitants.