List of business entities Forms of business ownership vary by jurisdictionbut several common entities exist: A sole proprietorshipalso known as a sole trader, is owned by one person and operates for their benefit.
Their shared common thread is that they all operate to achieve a balanced financial, social and environmental set of objectives. Within the Trading Enterprises there are employee owned enterprises and membership owned enterprises.
Financial Institutions Saving and Loans organisations such as credit unions, micro credit organisations, co-operative banks and revolving loan funds are membership owned social enterprises. Credit Unions were first established in the s in Germany and spread internationally.
Co-operative Banks have likewise been around since the s, owned as a subsidiary of a membership co-operative. In recent times Microcredit organisations have sprung up in many developing countries to great effect. Local currency exchanges and social value exchanges are also being established.
Community Organisations Many community organisations are registered social enterprises: These are membership organisations that usually exist for a specific purpose and trade commercially.
All operate to re-invest profits into the community. They have large memberships who are customers or supporters of the organisation's key purpose. There are village co-operatives in India and Pakistan that were established as far back as The profits are used to provide salaries for people who provide free services to specific groups of people or to further the social or environmental aims of the organisation.
Origins[ edit ] The idea of a social enterprise as a distinct concept first developed in the late s in the UK as an alternative commercial organisational model to private businessesco-operatives and public enterprise. The concept, at that time, had five main principles  divided into 3 values and 2 paradigm shifts.
The 2 paradigm shifts were: Originally, non-profit organizations relied on governmental and public support, but more recently[ when? However, market failure is emphasized[ by whom? Muhammad Yunus used the term referring to microfinance. His work in this[ which?
Paulo Freire and critical traditions in research e. This intellectual foundation, however, does not extend as strongly into the field of social entrepreneurship, where there is more influence from writings on liberalism and entrepreneurship by Joseph Schumpeterin conjunction with the emerging fields of social innovationactor—network theory and complexity theory to explain its processes.
Social enterprise unlike private enterprise is not taught exclusively in a business school context, as it is increasingly connected to the health sector and to public-service delivery.
Publications[ edit ] The first international social-enterprise journal was established in by Social Enterprise London with support from the London Development Association. The Social Enterprise Journal has been followed by the Journal of Social Entrepreneurship, and coverage of issues pertaining to the social economy and social enterprise are also covered by the Journal of Co-operative Studies and by the Annals of Co-operative and Public Economics.
The Skoll World Forum, organised jointly by Oxford and Duke universities, brings together researchers and practitioners from across the globe. Terminology[ edit ] The term 'social enterprise' has a mixed and contested heritage due to its philanthropic roots in the United States, and cooperative roots in the United Kingdom, European Union and Asia.
In the US, the term is associated with 'doing charity by doing trade', rather than 'doing charity while doing trade'. In other countries, there is a much stronger emphasis on community organising and democratic control of capital and mutual principles, rather than philanthropy.
Muhammad Yunus, founder of the Grameen Bank, believes that a social enterprise should be modeled exclusively to achieve a social goal. Another view is that social enterprises should not be motivated by profit, rather profit motives should be secondary to the primary social goal.
According to this definition, the social enterprise's social mission is to help the disadvantaged, which is executed by directly providing goods or services not money.
A third definition is purely based on how the organization is legally structured, or formed as a legal entity. In this context, a social enterprise is a legal entity that through its entity choice chooses to forgo a profit motive.
A fourth definition asserts that a social enterprise consists of a community of dedicated individuals that are continuously thinking about social impact, and as a result employ business and management techniques to approach social causes.
Nonprofit[ edit ] Social enterprises are not only a structural element of a non-profit. A large portion of social enterprises are non-profits; however, there are also for-profit social enterprises.
The social enterprise model offers non-profit organizations an alternative to reliance on charitable donations.
This may allow them to increase their funding and sustainability, and assist them in the pursuit of their social mission.This article needs additional citations for verification.
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