Structuring a Social Enterprise

The idea of "doing good while doing well" certainly isn't new, but it is increasingly popular in both the business and non-profit worlds. Increasingly, non-profits are developing social enterprises to help the organization become financially sustainable without being as dependent upon the good will of donors. On the other hand, some for-profit businesses are intentionally being established with the mindset that the business's social impact or mission is at least equally as important as earning a profit.

A social enterprise is a business that is both purpose-driven and market-driven. Unlike a typical for-profit business, a social enterprise is not exclusively dedicated to maximizing profits, but unlike a typical non-profit organization, a social enterprise does sell goods or services to raise revenue while addressing a larger societal issue. Social enterprises can range from socially responsible or philanthropic-minded for-profit businesses to revenue-generating arms of traditional non-profit organizations.

How is forming a social enterprise different from establishing other types of business entities? And how should you structure a social enterprise?

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