What is Social Enterprise?

By Jointing.Media, in shanghai 2010-02-20

Normally we penetrate to the essence of reality starting from the definition involved in phenomenon. What is “Social Enterprise”? We will catch it from interviewees below who working in this field:

Calvin Chin：CEO at Qifang

Richard Brubaker：Founder at Hands on Shanghai (HOS)

Fan Li：Executive Director at Global link Initiative（GLI）

Sijia：Organizer at Shimenkan Connection

Calvin Chin：A friend of mine has a good, simple definition. He says that social entrepreneurship is using using business concepts to solve social problems. But I think it’s kind of a funny term, social entrepreneurship. It makes sense for now, but I think in the future it won’t mean anything. It will just be redundant because we will come to realize and appreciate how all enterprises and all entrepreneurship is social, and how all social initiatives can be run with business concepts to make themselves more sustainable and scalable. You can’t have a successful company in a failing society, and a NGO/NPO that doesn’t think of its efficiency and operations can’t last forever. But for now, maybe it is fair to say that traditional businesses tend to think of profits first and social impact second, while SE think of social impact first and profits second.

Richard Brubaker：I think it is still China works that out. There are many definitions, and usually it is someone who develops business that has a direct benefit to society. So other the product service that they are providing, it is a benefit to society, or that through their revenues they are also then funding maybe NGO society. So we look at some example, they have environmental engineering company that works for the corporations to environmental substance, but then the use of profits from a profound NGO, and does educational awareness for children. So there are different models.

In China it is a bit different. It has been normal because a lot of NGOs in China, or what we will consider NGOs in the west, operate their social enterprises in China because of the registration. So right now we have tried to do to figure out if there is a charitable law tomorrow and everyone could register an NGO, who works their social programs and who would go to NGO. Right now for us that is the hardest part to understand. So it is so quite a western idea. You see a lot of westerners in China to have the most well known social enterprises, but at the same time we are trying to refer to some example, that they are developing things around culture and around people that they can be classified as Social Enterprise. I just try to identify them in the proper way and it is known how they are operating.

Fan Li：There’s no a conclusive definition of Social Enterprise because NPOs and SEs are both changing and growing and each country has different situation, each organization has different purpose.

And actually the Chinese translation of Social Enterprise/Entrepreneur is not very accurate. In Japanese, there’s a term “Start-up Entrepreneur” while in Chinese can hardly express this start-up nature.

GLI is also devoted to bring some new power to China’s citizen society through the concept of social enterprise. GLI prefers the European definition of social enterprise. And there are usually 3 parts of its characteristics: Social nature, Business nature, Focus on people’s growth.

Sijia：The concept of Social Enterprise is not yet firmed. My view is that SE, NGO, and NPO are all aiming at serving the society. Regardless of making money the first and spending the second or spending money from others, the aim of serving the society is the same. When talking about the flow in and flow out of an organization, NGO and NPO only flow out, enterprises only flow in as they make profits, and the remaining intermediate part, both flows in and out, is the most controversial. An organization that flows in more than out can be considered as an enterprise, and that flows in equaling to out as a Social Enterprise (enterprises that take up social responsibilities we advocate), but how can an organization that flows out more than in survives?

Social Enterprise was mentioned in a class, and when I raised question whether Social Enterprise aims at social profit with profit measures or the opposite, instructor replied that it is a concept varying by countries. She said, Chinese Social Enterprises and social profit relevant are all categorized into NPO, according to the standard of America. When talking about the difference between Social Enterprise and For-profit Business, as mentioned by the instructor, the crux is where the money is spent, which is also my understanding so far.

———————————————————————————————–-To be continued

Contributors：Wind、PF、Stephanie、Wendy

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