What is social enterprise? Take 2

A few months ago, I wrote a piece about the definition of social enterprise. Basically, I was concerned that people were getting too wrapped up in defining the term, and forgetting that they were all in it for the same reason - to achieve a social mission through their respective businesses. Whether that business was for-profit or nonprofit, had a double or triple bottom line, didn't seem as important as the fact that they were doing some good in the world. Perhaps I was just a bit too optimistic.

Since writing that piece, I have seen the situation deteriorate from quibbling over semantics to all-out misrepresentation. In case anyone is wondering, social enterprise is not "a term describing for-profit companies that pair with charities to create innovative ways of changing the world," as the Globe and Mail recently stated. That's corporate social responsibility (CSR), and yes, there is a difference. For-profit companies who partner with or support charitable initiatives are to be commended, but it's misleading and even irresponsible to describe them as social enterprises. If someone doesn't stand up and make the distinction, soon any company that gives money to charity is going to be calling itself a social enterprise. Oh wait, that's already happening...

At a recent conference, a colleague was lamenting the fact that some companies who donate as little as 1% of their profits to good causes are now calling themselves social enterprises. So where does that leave all those other organizations, the "real" social enterprises that are working day in and day out to advance their social mission? Will they simply become really social enterprises compared to their profit-donating counterparts? Or will they have to adopt a completely new term to differentiate themselves from companies who call their CSR or corporate philanthropy practices social enterprise?

Perhaps the answer lies in legislation and regulation. Governments around the world are taking notice of the social enterprise business model, which, from a purely fiscal perspective, lies somewhere between a charity and a for-profit business. If they decide to recognize it as a separate type of organization and regulate accordingly, then this whole business of what constitutes a social enterprise will be cleared up through paperwork and procedure.

Whether this would be a good thing for social enterprise is still up for debate, but one thing is certain: if there is no general consensus on what a social enterprise is (and is not) we run the risk of the term being diluted, or worse, misappropriated completely. The scariest example I've seen so far was in a recent blog post by the CEO of salesforce.com. Titled "The Facebook Imperative Cannot Be Stopped," the piece argued that the use of social networking tools "will be the catalyst of this new productivity revolution - delivered through these new social enterprise platforms." The very next day, I came across a different blog post on another site. This one entitled, "How Twitter makes us more productive - The Social Enterprise."

Seems we have our work cut out for us.

By Nicole Zummach