A social enterprise is a business which trades in order to create a social impact. It makes money in the same way a business does – by selling goods and services. Revenues are used to cover costs, pay salaries, to develop the business and to invest into making a difference for the common good. It can make a profit, however, the core goal is not simply to create wealth. A social enterprise aims to be self-sustaining by trading on a cost-recovery basis, and breaking-even may be regarded as a successful outcome.

Paul Harrod, Chief Executive Officer, Evidence to Impact, says: “Social enterprises have a number of advantages – they seek impact ahead of profit. They need to be sustainable, but ‘break even’ can be a great success, which it would not be for a private business. With research that is publicly funded, targets the NHS, or schools, or the public sector as the end customer, it is arguably only right that any intervention is delivered on a ‘cost recovery’ basis."

Social enterprise offers an excellent model to support the achievement of research impact. It is a pathway which some universities have already recognised as being key for commercialisation of social science.

"A social enterprise will have a clear sense of its ‘social mission’: which means it will know what difference it is trying to make, who it aims to help, and how it’s going to go about it." (Social Enterprise Explained)

A social enterprise can access social investment and charitable funding sources which would not be available to a for-profit business. On the other hand, compared with for-profit businesses, social enterprises are unlikely to attract traditional venture capital. This can make it difficult to scale up a social enterprise – and there is often heavy competition between social enterprises for the funding that is available. Consequently, many social enterprises tend to operate at a relatively small-scale, perhaps with only one member of staff.

Like businesses, there are many different structures that a social enterprise could take, depending on needs. Some more well-known ones are co-operatives, charitable incorporated organisations, and community interest companies (limited by shares or by guarantee). There are excellent resources and tools available online to support those who are considering creating a social enterprise:

Some universities have set up dedicated resources and support for social enterprise in their institutions. Here are some that we have highlighted: