The Enterprising Non-Profits Program uses the term "social enterprise" to refer to business ventures operated by non-profits, whether they are societies, charities, or co-operatives. These businesses sell goods or provide services in the market for the purpose of creating a blended return on investment, both financial and social. Their profits are returned to the business or to a social purpose, rather than maximizing profits to shareholders.

Others use a broader definition that includes privately owned ventures that have a very strong blended financial and socially responsible return on investment.

For non-profits and charities, operating an enterprise is nothing new. Museums and art galleries have operated gift shops as a way to generate revenue to support their exhibits and promote art. Service organizations such as the YMCA and YWCA have used fee-based programs to support their charitable activities. And many non-profit social service or relief agencies have operated thrift stores as a means of generating revenue for their activities and providing low-cost goods to their clients.

Reasons for Starting A Social Enterprise 

There are many different reasons why non-profits think about starting a social enterprise. They range from the purely financial to purely mission-based. Most often they are some combination of the two.

There are three primary reasons to develop and operate a social enterprise:

1. Fill a need the market will never meet on its own, such as employment for marginalized communities. Examples of this type of social enterprise include Pot Luck Catering creating employment in Vancouver's Downtown Eastside, The Right Stuff providing employment for youth at risk in a rural community, and the Cleaning Solution, a commercial janitorial service employing mental health consumers.
2. Provide an opportunity to advance mission, particularly in areas of cultural and environmental activities. Examples of this type of social enterprise include: Lawn and Gardent Smart which is Evergreen's environmental lawn service, Xa:ytem an aboriginal cultural centre, and Strathcona Dental Clinic delivering dental care to low income youth and seniors in Vancouver's inner city.
3. Enhance the organization's financial sustainability through the generation of profits that flow to a social purpose. Examples of this type of social enterprise include: Penny Lane a thrift store whose profits support youth services and Atira Property Management, a for-profit property management service owned by Atira Women's Resources.

Often, a social enterprise will have components of all three of these factors, but will identify one leading purpose for the social enterprise. You may also go to the Marketplace for a broader view of a full view of the diversity of social enterprise products and services.

Social Enterprise Products, Services and Outcomes

A social enterprise can take on a remarkable diversity of forms.

• From a product perspective, it can create anything from planter boxes, fertilizer or patio furniture to packing cartons, meat pies, and cookies.
• From a service standpoint, a social enterprise can deliver anything from consulting services, recycling, or building management to courier and voice mailbox services, lawn maintenance, cafes and restaurants.
• From a fiscal perspective, non-profit enterprises can generate anywhere from 5% to 100% of a program's or organization's costs. Income sources can range from high-end businesses with private clientele or discounted services paid for by low-income clientele, to government contracts or government-funded services.
• From an outcomes perspective, non-profit enterprises can provide pre-employment services for Aboriginal youth, supply food or dental services for low-income children, improve watershed management and increase fish stocks, or support the employment of mental health consumers or people with developmental disabilities.