Social Enterprises

A development initiative’s institutional profile impacts its options for targeting certain problems and populations, establishing partnerships and raising and managing funds. Some projects become more self-sustainable by legally registering as social enterprises because this profile allows them to address development problems while generating gains just as a business would. The money that social enterprises make is used to cover the costs of their social development project and, sometimes, to make a profit.

Although a social enterprise’s main objective is still its development project, initiatives that use this profile find it is more cost-effective to generate their own resources so as not to be totally dependent on donations or public funds, which are scarce and difficult to get. In addition, having their own money allows them to use it in any way they deem necessary to meet needs and respond to local interests in a more comprehensive and contextually relevant way, without the limitations of donations that are often previously allotted for some areas and not others.

Social enterprises have different names in different countries, and are legally recognized in some but not in all of them. In any case, their main feature is that they use commercial strategies –such as the sale of goods and services– and reinvest a good portion of their profits in their development project.

Some initiatives are not registered as social enterprises themselves, but devote efforts to entrepreneurship projects and the creation of social enterprises in the communities they work with in order to create local capacity to solve economic and social problems in a more profitable and, therefore, self-sustainable way.