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Types of social enterprise

Social enterprise includes different types of businesses and organisations. Here, we provide definitions and examples of these different types
A group of people doing an activity in pairs

1. Credit union

Definition: Finance co-operative that helps people save and borrow money. They also provide access to community finance initiatives

Example: CO-OP Financial Services, formerly known as CO-OP Network, is an interbank network connecting the ATMs in the United States, with additional locations in Canada and certain US Navy bases overseas. It is the largest owned interbank network in the United States.

2. Community-based organisation

Definition: An organisation with a strong geographical definition and focus on local markets and services. Community-based organisations are organisations with earned-income activities which are set up, owned and controlled by the local community and which aim to be a focus for local development. Their ultimate goal is to create self-supporting jobs for local people.

Example: “The Recycled Orchestra” is a project developed in one of the poorest slums in Latin America, Cautera (Asuncion, Paraguay). Their aim is to develop the area and provide opportunities for the local community. Since the creation of the project, they have set up a music school and a youth orchestra that performs internationally.

3. Non-Governmental Organisations with commercial arms

Definition: A non-profit organisation that does not rely on grants and donations, but instead earns income through selling goods and services.

Example: BRAC is an international organisation based in Bangladesh that works with isolated people in poverty by finding practical ways to increase their access to resources, support their entrepreneurship and empower them to become agents of change.

4. Social firm

Definition: A business set up to create employment for those most severely disadvantaged in the labour market.

Example: Fifteen is the name of several restaurants founded in 2004 by Jamie Oliver, a well-known British chef. These restaurants employ disadvantaged youth, including those with drug or alcohol problems, the unemployed and the homeless, ultimately training them to become chefs.

5. Cooperative

Definition: An association of people united to meet common economic and social needs through jointly owned enterprises. Cooperatives are organised by and for their members, who come together to provide a shared service from which they all benefit.

Example: The Seikatsu Consumers’ Club Co-op (SC) is a Japanese organisation formed in 1965 with headquarters in Tokyo. The organisation is owned by the members (around 307,000), most of them women, and is concerned with food safety. It buys organic food and shuns genetically modified organisms (GMOs) and produces its own milk and biodegradable soap.

6. Fairtrade

Definition: An organised social movement that aims to help producers in developing countries achieve better trading conditions and promote sustainability. It advocates for higher prices for exporters as well as higher social and environmental standards.

Example: Divine Chocolate is an organisation established in the UK in 1998 as a company limited by shares owned by the Kuapa kokoo cocoa farmers’ co-operative, the Fairtrade NGO Twin Trading and the Body Shop. Their aim is to continue to deliver delicious chocolate and a social business model supporting local cocoa farmers.

7. Microfinance

Definition: A form of financial services for entrepreneurs and small businesses that lack access to banking and related services. The two main mechanisms for the delivery of financial services to such clients are 1) relationship-based banking for individual entrepreneurs and small businesses; and 2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group.

Example: Mibanco is a Peruvian bank that was born out of necessity to provide finance to SMEs. It was founded in 1998 in Lima on behalf of an NGO, Acción Comunitaria del Peru.

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Social Enterprise: Business Doing Good

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