What Is Social Enterprise
Social Enterprise and its eco system have deeps roots in Ireland. The old Irish tradition of Meitheal, where people in rural communities came together to work on a neighbours farm, embodies the spirit of social enterprise – working as a community to benefit the community socially and economically. Its evolution can be seen in the development of co-operatives and building societies, the GAA and Credit Union movements - organisations knitted into the fabric of Irish society. They performed another important role too, as a catalyst for private and state investment that improved the local community and economy.
In many respects, Social Enterprises have emerged in the same way as traditional start-up businesses. They meet or satisfy a market need which has not been addressed by either the private or state sectors. They can be driven by the passion and ambition of a social entrepreneur, a socially minded business or from the DNA within an enterprising community.
The origins of Social Enterprises are continually expanding, reflecting a greater awareness of social impact across all aspects of society.
Social Enterprises come in all shapes and sizes, servicing markets as diverse as the environment, food & drink, childcare, transport, education and training, work integration, tourism, health and specialist services. As there is no specific legal company form for social enterprise, they are often constituted differently to reflect the structure their founders decided was the best fit to meet their mission. Some are Companies Limited by Guarantee others Limited by Shares, some have charitable status. However, what they have in common is that they meet the criteria and characteristics that make them a social enterprise.
Where Social Enterprises operate within the economy can be illustrated best in the diagram below. The Social Enterprise sector sits in that ‘sweet spot’ between the charity sector, which provides social value primarily from grants and donations and traditional business whose primary objective is to create financial value for its owners and investors. Social Enterprise creates social impact through the provision of commercial goods and/or services while also being dependent on traded activities to remain as viable businesses.
“Adapted from J. Kingston Venturesome, CAF Venturesome, and European Venture Philanthropy Association (2015)).”
Of course, as in life, nothing is ever black and white. Social Enterprises whose income is derived solely from its commercial activities are currently the exception in Ireland. Income from government, philanthropy and Corporate Social Responsibility programmes with the private sector, play an important role as part of their sustainability. Just as some organisations in the charity sector use a social enterprise approach, traditional businesses are moving to behave more social in what they do.
But what is clear is that Social Enterprise has evolved to be a distinct sector. What’s next for social enterprise is in our hands. It’s an exciting time!
Together we will forge a new beginning for Social Enterprise and will grow this sector to benefit all our people and communities throughout the Republic of Ireland.