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Social Entrepreneurs Dilemma: Should the enterprise be profitable or non-profit?

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May 3, 2012

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Ruhul Kader
9 years ago

We written. However, i have considerable doubt on the capability of a Non profit as you call it social enterprise's capability on making profit. Moreover, you blend both non-profit and social enterprise in your writing. Social enterprise often deals with products or services they produce and their focus often on social good instead of making profit. Example can, Arong in Bangladesh, Rages to Riches in Philippine.

On the other hand, non profit organization like Action Aid, One degree initiative, they run with the donation of doners and they don't have a product/service and no business model too. And globally this type of organization do run same way. Though, this organizations can also turn themselves into a social enterprise if they can develop a business model! But that time they would not entitle for any donation, i think.

However, this organizations are not social enterprise at all by definition.
So, I think you might need to make some more clear declaration and should draw a line that about which organization you are talking about.

Ashiqur Rab
Ashiqur Rab
Reply to  Ruhul Kader
9 years ago

Social entrepreneurship has different definition in different corner of the world. In Europe social enterprises are recognized as Non government Organizations (NGOs) and in USA it is called as non-profits ( Non profit implies the enterprise can make profit which will be used for the enterprise not for the entrepreneurs personal purpose) and In Asia social enterprises are called as both NGO and non profit (Action Aid/1di) and most of the cases such enterprises work for philanthropy or charity. Here, the problem is if any entrepreneur who ventures for solving social problem (like Grameen Bank/BRAC)  makes profit some people think its not fair. Its not like that!   
Its not necessary that every social enterprise should be charitable or will be lived by funding, rather these can be self sustaining and profit making maintaining social goals....       

Ruhul Kader
Reply to  Ashiqur Rab
9 years ago

 I agree, It's not necessary for every social enterprise should be charitable or will be lived by funding but organizations like Action Aid always do so and will do so because they are not by definition social enterprise either in USA, Europe or here in Bangladesh. If any organize wants to be a social enterprise it must have a viable business model that can also solve social problem. In case of Action Aid they do not entitled to be like that. So, i think there is some points you need to make clearer whether charitable organization without a business model can be social enterprise.    

Ashiqur Rab
Ashiqur Rab
Reply to  Ruhul Kader
9 years ago

I think a person can't make any definition alone, if he isn't an applied economist or renowned entrepreneur! In case of definition of Social Enterprise, no where, you will get any phenomenon of 'Business Model'! You will find only to major phenomenon (o1) Mission of Solving Problems
(02)Working for the bottom line people. If any venture continues doing any job maintaining these two principles will be considered as social enterprise. It doesn't matter whether you getting profit through a structured business model or providing charity. In the world of social enterprise you will get definition of  only one structured  business model that is 'Social Business' model. But, it is explained from different perspective. So, now if you think a social enterprise should have a business model, now you need to provide any newer definition like Dr. Yunus.  Will you?     

Ruhul Kader
Reply to  Ashiqur Rab
9 years ago

This is worse! You just left the point of whether an organization that is solely based on charity can be a self sustaining organization or not. By the way you also completely wrong in case of accepted definition of social enterprise: see this-
A social enterprise is an organization that applies commercial strategies to maximize improvements in human and environmental well-being, rather than maximising profits for external shareholders. Social enterprises can be structured as a for-profit or non-profit, and may take the form of a co-operative, mutual organization, a social business, or a charity organization.(Wikipedia). Yes, it is true that, the knowledge and edge of SE is evolving tremendously. Say for example TED they are Non-profit but not totally charity based, you have to pay around $7000 to attend a TED conference. 
See these:
http://www.skollfoundation.org 
http://www.socialedge.org/discussions/social-entrepreneurship/defining-social-entrepreneurship/ 
http://blog.guykawasaki.com/2007/09/social-entrepre.html#axzz1u4LRCfPq 

I think you should make things more clear with more indepth understanding>  

Ashiqur Rab
Ashiqur Rab
Reply to  Ruhul Kader
9 years ago

Earlier I have said, SE has different definitions from different perspective and it also varies as per region as well. Here goes debate on whether social enterprise is a business or non profit/charity venture? My article's aim was to divide the logic of the debates. My target was to persuade the persons, who think a social enterprise is only a non profit/charity organization, to change the notion.  But, here you just carried the age old debate, nothing else!  

If you want to know the another definition of SE by Eur0pean Union: "‘Social enterprise’ means an enterprise whose primary objective is to
achieve social impact rather than generate profit for owners and
stakeholders. It operates in the market through the production of goods
and services in an entrepreneurial and innovative way, and uses
surpluses mainly to achieve social goals. It is managed in an
accountable and transparent way, in particular by involving workers,
customers and stakeholders affected by its business activity."

But, Ashoka (www.ashoka.org) is the worlds largest social entrepreneurship
patronizing organization which is itself an social enterprise. But it
runs over charity. Now, according to

the definiton of European Union Ashoka isn't  not so! So, debate will go on.....

Now, my question is what actually you want to make clear understanding regarding Social Enterprise?  

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