Social Enterprise is a global movement that is steadily building momentum here in Auckland. Leaders from government, not for profit and business sectors are recognizing that social enterprise offers a unique combination of social purpose and financial independence.
Social Enterprises are hybrid organisations that trade goods and services to achieve social, environmental, economic, and cultural outcomes.
A common way to describe this is to use a spectrum with traditional charities at one end and traditional businesses at the other, with varieties of social enterprise occupying the space in between.
Traditionally social, environmental, economic, and cultural initiatives are developed and implemented by government (the public sector), and delivered in partnership with either business (the private sector), or charities (the community sector).
Social enterprise provides a unique alternative to traditional social service provision and are able to develop innovative new approaches to solving tough problems.
Social Enterprise in New Zealand
In New Zealand social entrepreneurs use both limited liability companies (LLC’s) and charitable trusts (CT’s) and often a combination of these (a business owned by a trust) to structure their enterprises.
An organisation’s legal structure is not always useful in defining a social enterprise. At Social Enterprise Auckland we look at the following:
Purpose – A Social Enterprise can clearly articulate their social, environmental, economic, or cultural purpose. This should be at the foundation of the organisation.
Trade – A Social Enterprise earns the majority of its income from the sale of goods or services.
Profit – A Social Enterprise makes a profit and invests the majority of that profit in achieving their stated purpose.
Impact – A Social Enterprise can measure the difference they are making and use this information to ‘prove and improve’ their impact.