Here’s a framework that attempts to differentiate charities, social enterprises, traditional (for profit) businesses along a spectrum.
On one end, creating social value. In the middle, achieving social impact alongside financial return. On the other end, creating financial value.
- Purely charitable funding from grants, donations and endowments
- Additional market-based revenue stream
- Potentially self-sustaining, >75% market revenues
- All profits reinvested in the business
- Mission driven for profit enterprise
- CSR and corporate philanthropy
- Pure profit orientation
1 (Charity)… 4 (Social Enterprise)… 7 (Traditional businesses)