Social entrepreneurs have been around for many years, but the explosion in global connectivity and intense competition for philanthropic funds seems to have propelled the sector into a more central position in the business world. The essential difference between social enterprises and traditional businesses is that the mission is central to the business of a social enterprise, and income generation takes an important, but secondary, supportive role. The social entrepreneur seeks to implement innovative and creative ideas to solve large-scale social problems in a sustainable way. A social enterprise faces the same issues that any traditional business faces in its growth and operations. But social entrepreneurs also face unique challenges in delivering the social value, social returns or social impact of the enterprise in addition to commercial value.


Social enterprises can be run as for-profit or non-profit and sit somewhere in the middle of the traditional corporation and a purely charitable organization. Some organizations are able to generate sufficient income through the sale of socially beneficial goods or services, but many are not. Other funding opportunities include corporate investment, donations and government funding. Approaching investors may not be easy, however, if the organization is perceived as more non-profit than profit-oriented and not likely to make a reasonable return for investors. On the other hand, many donors are distrustful of a social enterprise being run as a for-profit company where too much focus may be placed on wealth generation and too little on social value.

Communicating Value Objectively

The social enterprise delivers more than commercial value, and it is the additional social value that often ignites the passion of the social entrepreneur. This in combination with the fact that social value is not easily measured can make it difficult to communicate the bottom line to investors, donors or the community at large. It is important to stay objective to remain convincing, and to make the right decisions in moving the enterprise toward its goals.

Strategy and Long-Term Focus

It is important to any business to identify a long-term strategy, define appropriate goals and drive growth in a sustainable manner. Difficulties for social enterprises again stem from the fact that the purpose of the organization is to create social benefits. It is often the case that multiple social benefits can mean multiple goals, all of which must be evaluated in terms of cost of provision to ensure true value creation. A strong strategy will identify a unique value proposition compared to other organizations and indicate clearly what the organization will not do. Activities of the social enterprise should work together and reinforce each other.

Remaining True to the Mission

Establishing a good strategy for the social enterprise will help to mitigate the possibility of mission creep. It is often easier to fight fires and not focus on the long-term goals of the organization, but this could result in an undesirable shift in the social value provided. A successful organization will continuously review strategy and work to improve it, but changes in the mission can cause confusion and dilute the organization's impact.