The social enterprise ecosystem

No social enterprise operates in a vacuum. Many interdependent systems, institutions, and networks enable social enterprises to flourish.

One crucial group within the social enterprise ecosystem is the beneficiaries and customers who use the services that social businesses and nonprofits provide. Customers are those who pay for a good or service, while beneficiaries are those whom an organisation seeks to help. In some social enterprises (for example, a low-cost grocery store located in a ‘food desert’), these two groups may be the same; in other models, they may be different. However, both customers and beneficiaries provide crucial feedback that shapes the ways in which social enterprises devise and refine their aims and models.

Governments are also an important part of the social enterprise ecosystem. Governments play a key role in setting collective priorities for addressing social needs, and they provide funding and other support for innovations and initiatives that meet those needs. Government policies may also expand or limit the available options for social enterprise models – for example, by determining how certain types of organisations are taxed and regulated. We will learn more about what the UK government has done to promote social enterprise in the next step.

In addition to the government, other funding sources enable social enterprises to start up – and scale up – their innovations. These funders include impact investors who seek both a financial and a social return, as well as foundations and other traditional philanthropic organisations that provide grants to nonprofit social enterprises. The availability, flexibility, and conditions of funding may determine which organisations grow and thrive, and which fail to get past the initial idea phase.

Universities, independent research organisations, and other institutions can also support social enterprise by evaluating the impact of different models and disseminating relevant research findings. In this area, the role of enabling organisations, which open channels of communication and collaboration among all of the key players discussed above, is especially important.

Finally, peer organisations also form a crucial part of the social enterprise ecosystem. Social enterprises may compete for funding or customers with one another or with other nonprofits or businesses, but they can also share information and best practices, collaborate, and support complementary initiatives.

The next several Steps examine closely the particular roles of many of these stakeholders.