What is a SOCIAL ENTERPRISE?
When we began working alongside our partner communities in Uganda, we faced an important decision about how to structure economic opportunities. We could have pursued traditional business models with single owners, or connected entrepreneurs with microloans, but instead we chose to build social enterprises together.
Let’s examine what we mean when we say “social enterprise”.
This term can encompass a wide range of business types; however, if it is a true social enterprise, it will have a mission-driven component. While it will focus on generating profits (so that it can pay its employees, reinvest in the business, and pay taxes), its main purpose isn’t to grow profits for shareholders or an individual owner. Social enterprises sell goods or services, then reinvest the profits they make into a specific mission.
Our social enterprise program in Uganda has a mission-driven component - free tuition for students at each Ugandan partner school. Additionally, our social enterprises each have a co-operative component, which isn’t a standard practice for all social enterprises, but works well in our specific situation. Every business is operated by a group of people, and “owned” by the school. Profits are invested back into the school and business, and are divided amongst community members who run the daily operations of the business.
Here’s why this model resonates deeply with the values we hold:
Purpose-driven profits: While traditional businesses prioritize maximizing returns for owners or shareholders, social enterprises reinvest profits back into their mission and community benefit.
Shared ownership: Instead of one person holding all decision-making power and gains, social enterprises distribute ownership among workers and community members
Community accountability: Success is measured not just in financial terms, but in how well the enterprise serves its people and addresses local challenges.
Built-in equity: Resources, risks, and rewards are shared collectively rather than concentrated, creating opportunity for everyone involved.
Cooperative decision-making: Major choices are made together, drawing on the wisdom and needs of the whole community.
What’s powerful is that this model exists within today’s capitalist economy, not outside of it. Our Ugandan partner schools continue to operate businesses that generate a profit. These businesses participate and collaborate with other businesses, sharing knowledge and competing in a shared marketplace to offer high-quality products at fair prices.
Markets and profit are not unique to one economic system. It’s about choosing a structure that is self-sustaining, gentle on natural resources, and that best serves the people doing the work.
If you'd like to learn more about our social enterprises or support this community-centred approach to economic development, here’s a video about it.