Collecting Data on Social Enterprises 2025

Appendix 3: List of definitions Definitions of social enterprise vary among countries and according to context. The term “social enterprise” is also closely linked to other concepts, including “social business”, “social entrepreneurship”, “social innovation”, “the social economy” and “the social and solidarity economy”. Individuals or organizations may identify as more than one of the above, and indeed as something else. Furthermore, some of these concepts may be formally constituted through a legal mechanism in a given country. The list below presents the most common definitions of social enterprise and related concepts. Social enterprise While definitions and interpretations of social enterprise vary around the world, the common characteristics among the definitions used by members of the Advisory Group on Social Enterprise Data are: –Purpose: The organization is primarily driven by a social and/or environmental purpose. –Revenue: A proportion of income is earned through trading. –Use of surplus: The majority of surplus, if any, is reinvested towards its purpose. The 2022 Social Economy Action Plan of the European Commission defines social enterprise as follows: “Social enterprises operate by providing goods and services for the market in an entrepreneurial and often innovative fashion, having social and/or environmental objectives as the reason for their commercial activity. Profits are mainly reinvested with a view to achieving their societal objective. Their method of organization and ownership also follow democratic or participatory principles or focus on social progress. Social enterprises adopt a variety of legal forms depending on the national context.”39 Social business The term “social business” was first introduced by Nobel laureate Muhammad Yunus, who defined it as “a non-loss, non-dividend company dedicated entirely to achieve a social goal.”40 In the 2011 Social Business Initiative of the European Commission, social business was defined as “an enterprise whose primary objective is to achieve social impact rather than generating profit for its owners or stakeholders”.41Social entrepreneurship While the terms “social enterprise” or “social business” are often used to describe an established organization, social entrepreneurship refers to the process of an individual using entrepreneurial activities to address a societal problem. Founders of social enterprises are often referred to as social entrepreneurs. In a 2023 OECD publication that reviews the concepts related to the social and solidarity economy, social entrepreneurship is described as follows: “Individuals and organizations that engage in social entrepreneurship leverage entrepreneurial activities to develop innovative ways to address pressing social challenges, benefit the common good, support labour market integration and contribute to sustainable and inclusive transition. Consequently, social entrepreneurship does not reflect a specific type of enterprise but rather a wide spectrum of entities ranging from profit-oriented businesses that engage in social activities such as corporate philanthropy, hybrid businesses that mix profit motivations and social objectives, non-profit organizations, and even ventures led by the public sector”.42 Social innovation Social innovation is mostly understood as a process of developing and implementing effective ideas, strategies and solutions to address societal challenges. It is not necessarily linked to an individual or organization. It arises from social enterprise and civil society as well as from other fields such as the public sector or the conventional private sector. The OECD defines social innovation as: “the design and implementation of new solutions that imply conceptual, process, product, or organizational change, which ultimately aim to improve the welfare and wellbeing of individuals and communities”.43 Social economy Social economy is used to describe a wide range of organizations that adhere to the principles of prioritizing social objectives over profit. These typically include cooperatives, mutual societies, non-profit organizations and social enterprises. In the World Economic Forum report on unlocking the social economy, the social economy is defined as follows: “The social economy comprises multiple models with a common ambition to create a more inclusive and sustainable economic paradigm. It is composed of a highly heterogeneous set of private Collecting Data on Social Enterprises: A Playbook for Practitioners 23