Social enterprises apply business solutions to social problems. The ultimate goal is to achieve sustainability by enabling non-profits to support themselves financially in innovative ways instead of relying solely on grants and donations. Since there are no shareholders in a non-profit organization, the profits from the related social enterprise are completely re-invested in the work of the organization. The emergence of revenue-generating activities for non-profits has created a new operating model where business principles, market characteristics and values (competition, diversification, entrepreneurship, innovation, and a focus on the bottom line) co-exist and work with traditional public sector values like responsiveness to community and serving the public interest. Essential to the success of a social enterprise is an effective business model. A business model includes two key elements:
an operating strategy that includes internal organizational structure and external partnerships that are crucial for creating the organization’s intended impact; and, 2.
a resource strategy that defines where and on what terms the organization will acquire the resources (financial and human) it needs to do its work. The business model for a social enterprise is the channel that the social entrepreneur converts inputs into outcomes; the generation of both social value (measurable impact) and economic value (revenue). A social enterprise can be integrated with the non-profit organization in one of several ways: Embedded:
The enterprise and the social program are one and the same •
The business is created to serve clients (central to the mission) Integrated:
The business activities overlap with the social programs •
The business is created as a funding mechanism and to expand/enhance the mission of the organization External:
Social and business activities are separate and may or may not be related to the mission of the organization •
The business is created mainly...
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