What is a Social Enterprise? A conversation with Social Enterprise Alliance President and CEO Jim Schorr

By on August 21, 2015
jim schorr

Jim Schorr is President and CEO of the Social Enterprise Alliance. Previously, Schorr was Executive Director of Juma Ventures, one of the U.S.’s most successful and admired social enterprises, and taught coursework on social enterprise as an Adjunct Professor at Vanderbilt University and as a Senior Fellow at UC Berkeley’s Haas School of Business. As an MBA student at Northwestern University in 1993, Schorr helped launch Net Impact, and subsequently served as a board member and chair during Net Impact’s growth and global expansion in the 2000s. He currently serves on the steering committee of the Social Enterprise World Forum, and as Chair Emeritus at Net Impact and Social Enterprise Alliance, where he was a board member for 7 years before his appointment as CEO.

What is Social Enterprise?

We had a chance to speak with Jim Schorr via conference call last week and clear up some common misunderstandings about Social Enterprise. Many of us have heard the terms social entrepreneurship and social enterprise, but what does that actually mean? Jim Schorr was kind enough to sit down and help us figure out exactly what is, and what is not, a social enterprise or social entrepreneurship.

Here are a few points we learned from our conversation:

What is a Social Enterprise?: A Social Enterprise is actually a new type or format for an organization or business that merges the mission-driven goals of a traditional non-profit organization with the traditional enterprise approach of a business. It is essentially a hybrid organization. It can be considered part business and part non-profit.

The field of Social Enterprise is a new area of activity in the business sector that is meeting a need not currently being met in the traditional business, government or non-profit sectors. It is a distinctly different approach to social issues.

What is not a Social Enterprise: Social Enterprise is absolutely not a fundraising strategy for traditional non-profits, nor a marketing strategy for traditional businesses. It is also not just a division or another side of your marketing. A Social Enterprise is a hybrid business model that fulfills an un-filled need in society.

Some basic foundations of what makes up a Social Enterprise:

1. Social Enterprises use market-based strategies to address social or environmental needs.

2. The Social Mission of the organization is the main function of the business, whereas a traditional business’s main function is to create ROI (Return On Investment).

3.  A Social Enterprise will provide a tangible product or service and not be based primarily on philanthropy or charity like a traditional non-profit organization.

4. Social Enterprises will re-invest their profits, or a significant % of their profits to the organization’s core mission. Though there is no exact % that defines whether it is a social enterprise.

5. Social Ownership: The goal of the company is to drive the mission of the company,  whereas a traditional business is owned by a person, persons or stockholders and their mission is to create profits.

6. The social or environmental mission of a social enterprise is part of its “DNA” from the outset.

Jim provided much needed clarity on our own mission of helping to empower Social Entrepreneurs. We hope this has helped you gain clarity also. If you’d like to read up more on Jim, please visit the Social Enterprise Alliance website at http://www.se-alliance.org/staff

 

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