Social enterprises sit at the intersection of business and impact. They are built to address social or environmental challenges while creating a model that can sustain the work over time.
What Is a Social Enterprise?
A social enterprise is a business or organization designed to address a social or environmental problem through its core work. You may also hear these organizations described as social ventures, especially when referring to early-stage companies or entrepreneurial solutions.
It can be for-profit or nonprofit. It might sell products, provide services, build technology, work with government, or serve communities directly.
What makes it a social enterprise is not its legal structure. It is that the organization’s purpose is connected directly to how it creates value.
What Can a Social Enterprise Look Like?
Some well-known organizations help show how different social enterprise models can be:
Patagonia sells outdoor apparel while making environmental responsibility central to its purpose, governance, and ownership.
SeaWorld is a for-profit company connecting its commercial operations with animal rescue, conservation, research, and education
TOMS is a for-profit company that describes its mission as using business to improve lives and directs part of its profits toward nonprofit partners and community impact.
Goodwill operates retail stores using donated goods, with revenue helping support job training and employment services in local communities.
Newman’s Own sells food and beverage products while directing the profits and royalties received by its foundation toward charitable causes.
A social enterprise could look completely different. It could be:
a technology that helps people with disabilities navigate public spaces
a food business that creates jobs for people facing barriers to employment
a healthcare platform that improves access to community resources
an energy or water solution that helps cities reduce waste
a transportation service designed for people with limited mobility
a product that reduces waste while creating a sustainable source of revenue
There is no single industry, product, or business model that defines social enterprise.
For more examples, our venture portfolio shows how entrepreneurs are applying different approaches to social and environmental challenges.
How Is a Social Enterprise Different?
A traditional for-profit business is generally built around creating value for customers and generating revenue. A nonprofit is organized around advancing a mission and may rely on donations, grants, contracts, earned revenue, or a mix of those sources.
A social enterprise connects the mission directly to the way the organization operates.
That means it still has to answer normal business questions: Who is the customer? Who pays? Is there demand? Can the model sustain itself? But it is also asking: Who benefits? What problem are we solving? Are we actually creating the outcome we set out to create?
Sometimes the customer and the beneficiary are the same person. Sometimes they are not. A city might purchase a solution that benefits residents. A healthcare provider might adopt a tool designed to improve patient outcomes.
The difference is not simply profit versus purpose.
For a social enterprise, purpose is part of the business model.
Where Rally Fits
Helping Social Enterprises Build Stronger Ventures
Rally works with entrepreneurs developing solutions to social and environmental challenges. Through the Rally Social Enterprise Accelerator, Fellows strengthen their ventures, better understand customers and partners, and build relationships that can help move their work forward.
Testing What Works in the Real World
A promising idea still has to work outside of a pitch deck. Real-world testing helps founders see what holds up, what needs to change, and what customers or institutional partners need before moving forward.
Rally connects entrepreneurs with businesses, municipalities, nonprofits, universities, community organizations, and others looking for new approaches to persistent challenges.
At its core, social enterprise is about building a solution to a meaningful problem and a model that can sustain it.
Whether you are building a social or environmental solution or looking for new approaches to a challenge your organization is facing, there are ways to plug into Rally.
New to social enterprise? Start with Rally’s Intro to Social Entrepreneurship Workshop to learn more, see examples, and explore where your idea might fit.
