The word is trendy and in the field of development cooperation is now on everyone’s lips. Of those who think “Social” but understand that without business there is a risk of shutting down and of those who think “Business” and have realized that with the Social new markets can be reached. If you don’t want to get caught unprepared find here a minimal vocabulary of Social Business.
Social Enterprise (Social Enterprise)
It ‘s a non –profit organisation, that profit must be reinvested in the social objectives of the company, may not be distributed to the owners or shareholders. In addition, the social enterprise must have a utility designed to achieve social objectives of general interest; It is not dissimilar to a charity or social assistance organization. At the international level there are different types of regulation of social enterprises that normally limit the areas of intervention. Normally they should deal with social assistance , health care and social care, education, environmental protection, protection of cultural heritage, training, social tourism, etc.
Social Business (Social Business)
It ‘s a company that tries to solve some kind of social problem through the production and sale of goods or services that enables economic sustainability. The social business, unlike Social Enterprise, is profit driven and can work in any industry. According to different definitions at the international level (especially in Us and Uk) it con be a common enterprises but with a social profile.
In the definition given by its most famous ideologist, Muhammad Yunus, Social Business firm can operate in all sectors of the free market for goods and services, such as a normal traditional enterprise, but with the sole purpose of achieving the well-being of the community and not the entrepreneur, who is not entitled to the profits, but may recover only the amount invested. These will remain within the company to be reinvested or in research and development, or to lower the costs of goods and services produced, or to hire new personnel.
An NGO (Non Governmental Organization) is different from a social enterprise, although it may have the same or similar purposes. NGO capital may be acquired only through donations and grants while social enterprises make it through selling products and services. This concept is similar to the Yunus definition “An NGO is a voluntary, non- profit organization that operates, contributes to, or participates in, various projects on education, training or other humanitarian, progressive, or watchdog activities. They usually you collect donations for running programs for disadvantaged or distressed people. The difference Is that NGOs operate on donations, Whereas a social business is a self -sustaining business. ”
Is now clear to you? If not, we can help with this scheme prepared by a Canadian University.
Beyond the definitions, which depend on the regulatory instruments of each country, the real problem is to uniquely identify what makes a business social, especially when it comes to countries of the global south where the laws on the matter are still not very advanced. The definition given by Yunus is quite restrictive and covers both the company mission and its system of profit redistribution.
Nowadays it is very clear that there is a lack of specific laws, regulations, dedicated training, shared know-how and expertise in the field, in short what Yunus calls “a global infrastructure for social business” that can attract human and economic resources in this new vision of capitalism.