A range of names is often used interchangeably to collectively describe the organisations and programs striving to create social value in society; this situation is similar to most other western economies. Terms include non profit, not-for-profit, Social Economy and Third Sector.
3.2.1 The Social Economy
For the purposes of the research it was agreed that Social Economy was the most useful and inclusive term to be used in the study. It is acknowledged that many other terms were used to describe/define the Social Economy and that many of these meanings are sometimes highly contested.
To reduce any uncertainty, the term Social Economy refers to: the production of goods and services not solely provided by the non-profit sector, but also, in some cases by private enterprises with shareholder agreements that force the majority of shareholders to agree to social objectives undertaken by the firm. Among the organisations that belong to the Social Economy, one can find associations, cooperatives and mutual organisations and more recently foundations. This kind of economy is regulated by stakeholder principle, which stands in stark contrast with shareholder capitalism. The “Social Economy” is a broader concept than the non-profit sector[17].
3.2.2 Public and Private organisations
Another term that is often misused is that of “private enterprise”.
There is a tendency to describe the economy as consisting of private, public and non-profit sectors, organisations or enterprises.
Public organisations generally refer to government organisations and should not be confused with public companies which are private enterprises owned by many individuals.
Private enterprises are assumed to capture the for-profit component of the economy. But the reality is that many social enterprises and non-profit organisations are in fact companies limited by guarantee and differ from for-profit companies in their aims, objects and constitutions.
As described below, the boundaries across sectors are blurring. A term of particular relevance to the study but also confused in definition and language-use is ‘social enterprise”.
3.2.3 Social Enterprise
There have been a number of attempts to define Social Enterprise and the schema proposed by Dees and Anderson (2006) offers some insights into the range of structural types among organisations. According to this schema, it is the objectives and modes of operation that form the prime differentiating characteristics. The spectrum describes the full range of business models available to social entrepreneurs, from purely philanthropic to purely commercial, with many variations in between. Philanthropic methods are involved anytime an organization falls short of the far right side, or on at least one dimension of the spectrum, indicating some form of subsidy or sacrifice. Excluding purely philanthropic or purely commercial ventures is not a major sacrifice in scope because very few social-purpose organisations exist at either extreme.
In the spectrum, the overlap between social enterprise and business enterprise highlights two phenomena; a) the actual and potentially huge number of social enterprise organisations and programs in the Social Economy; and b) the potential for complexity of hybrid social enterprise models of organisations and programs in the sector.
Table 1: The Social Enterprise Spectrum
To ensure clarity, a social enterprise project distinguishes itself from other programs or organisations within the Social Economy in that it has an earned income while still being driven by social mission, and usually seeks to use the sale of goods or services to achieve financial self-sufficiency. In the words of the OECD[18]: This concept refers to any private activity conducted in the public interest, organised with an entrepreneurial strategy and whose main purpose is not the maximisation of profit, but the attainment of certain economic and social goals, and which, through the production of goods and services, brings innovative solutions to the problem of social exclusion and unemployment (see OECD, 1999). Social enterprises are part of the thriving and growing collection of organisations that exist between the private and public sectors. They stand out from the rest of the non-profit sector as organisations that use trading activities to achieve their goals and financial self-sufficiency. Social enterprises combine the entrepreneurial skills of the private sector with a strong social mission that is characteristic of the nonprofit sector as a whole. They come in a variety of forms including employee owned businesses, credit unions, co-operatives, social co-operatives, development trusts, social firms, intermediate labour market (ILM) organisations, community businesses, or charities’ trading arms. They mainly operate in two fields of activity: the training and integration into employment of persons excluded from the labour market, and the delivery of personal and welfare services (”services de proximité”). Thus throughout this report, to be inclusive we shall use the terms Social Economy to refer to the sector as a whole, and Social Economy organisations to refer to all the organisations (traditional non-profit and social enterprises) that constitute the Social Economy. Social enterprises constitute a subset of the Social Economy.
Discuss this article on the forums. (0 posts) |
