The term 'social enterprise' can refer to a type of activity or
to an organisation practising that particular type of
The Welsh Government, in line with the UK Government, defines a
social enterprise (organisation) as:
'A business with primarily social objectives whose surpluses
are principally reinvested for that purpose in the business or in
the community, rather than being driven by the need to maximise
profit for shareholders and owners.'
The activity of earning - generating income through trading
goods and services - is also sometimes referred to as social
Organisations involved in social enterprise activity are often
considered to have the following characteristics:
1. Social aims
Such as job creation, training or the provision of local
services. Ethical values may include a commitment to building
skills in local communities. Profits are principally reinvested to
achieve social objectives.
2. Social ownership
Autonomous organisations whose governance and ownership
structures are normally based on participation by stakeholder
groups (e.g. employees, users, clients and local community groups)
or by trustees or directors who control the enterprise on behalf of
a wider group of stakeholders. They are accountable to their
stakeholders and the wider community for their social,
environmental and economic impact.
3. Enterprise orientation
Being directly involved in producing goods or providing
services. Whilst many voluntary and community organisations would
not see themselves as businesses, a growing number would accept
that they are more increasingly adopting business-like approaches
to governance and management in achieving their overall aims and
Social enterprises are sometimes said to have a 'triple bottom
line' - the values that many maintain: people, planet and profit.
Motivated by social, environmental and economic factors, rather
than just the single bottom line of profit.
Social enterprise however should not be considered as attempting
to turn voluntary and community organisations into businesses, as
the 'triple bottom line' emphasises, but about enabling
organisations to become more financially sustainable by
diversifying their income base and avoiding reliance on
time-limited grant funding.