A Primer on Social Enterprise

A movement in its infancy tries to strike a balance between the profit and not-for-profit sectors

By Steve Macleod

If someone has ever tried to explain the concept of social enterprise to you, there’s a good chance they’ve used TOMS Shoes as an example.

TOMS was founded in 2006 by Blake Mycoskie. The Californian was inspired by a trip to Argentina where he witnessed children walking around without shoes. Mycoskie returned to the U.S. and started a shoe company with a pledge to donate one pair of new shoes to a child in need for every pair of shoes TOMS sold. After the first year, the One for One project resulted in Mycoskie returning to Argentina with 10,000 pairs of shoes. By September 2010, TOMS Shoes had given more than 1,000,000 pairs of new shoes to children around the world.

But social enterprise isn’t just about shoes. In the simplest terms, social enterprise is a business with two goals: to earn revenue through the sale of goods or service and to achieve social, cultural or environmental outcomes.

While TOMS is one of the prominent examples today, social enterprise has existed for centuries. According to the Centre for Community Enterprise, social enterprise was born during the mass displacement and impoverishment of the Industrial Revolution in 19th century England. Similar movements took root in Canada early in 20th century. Both farmers in the prairies and fishermen in the Maritimes created a range of social enterprises for the betterment of the community, with co-operatives and credit unions being two notable examples – Girl Guide cookies and Scouts Canada popcorn are two others.

While social enterprises have a lengthy history, their impact on contemporary society is just starting to be uncovered. A recent report from Enterprising Non Profits says social enterprises in B.C. and Alberta are significant contributors to both employment creation and economic generators.

The report, titled Strength, Size, Scope: A Survey of Social Enterprises in Alberta and British Columbia, estimates that the 140 social enterprises surveyed for the report have a total of 4,500 employees and 2,700 of those employees were members of a designated target group such as persons with a mental or physical handicap or a member of a marginalized population.

In addition, the social enterprises that responded to the survey engaged 6,780 full- and part-time volunteers, had 27,870 people as members, provided training for 11,670 people and provided services to 678,000 people.

The sale of goods and services from social enterprise in the two provinces generated $78 million in revenue and an aggregate net profit of $7.9 million in the 2009 financial year.

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