Social entrepreneurship vs enterprise

Ben & Jerry’s is a great example of social entrepreneurship because they started as two friends who wanted to go into the ice cream business, and created the Ben & Jerry’s Foundation to provide funds for community projects. They have a set percentage allocated towards this foundation every year and consistently donate money towards environmental and social issues. One advantage of this is their ability to further connect with the communities they operate in, turning them from a chain to a local business. Being interested in local issues will connect them with people in the community and be recognized as more than just another ice cream store. However, they must consider the growth they are sacrificing by allocating this money towards the foundation. An important balance must be met between stable internal growth and impact on the local community.

One example of a social enterprise is a grocery store co-op, with many different individual examples throughout the country. The premise of a co-op is that the community owns the store, instead of a set of shareholders that may not have any incentive to provide benefits to the local community. This is an example of a social enterprise because it emphasizes the connection between community and store, yet still operates to earn profit to potentially reward the members with dividends. An advantage of this organization is they are more likely to benefit the community at large, as the shareholders of the cooperation are members of the local community. However, one disadvantage is the competition with larger corporate supermarkets that can successfully leverage economies of scale to offer better prices on more products to the community.

Social enterprises seem very interesting to me because you must balance revenue generation and value creation with providing for your social mission. Being able to optimize and understand the relationship between necessary revenue to keep the business running and profits that can be used towards your social mission seems like a very tricky balance that would be dynamic as the external environment around you changes and competitors enter and exit the market.

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