With seemingly endless options available to today’s consumer, it’s no longer enough for a business to offer the lowest price or the highest quality product. While these still remain influential factors in purchase decisions, that consumers prefer to give their business to organizations that are also socially responsible.
There is an important difference, however, between corporations that donate to charity or give back to their communities, and businesses that make social responsibility a priority. Social entrepreneurship is the process by which individuals, startups, and entrepreneurs develop and fund solutions that directly address social issues. In other words, it’s a business model that measures success in both financial return and social or environmental impact.
Curious about how it works? This guide breaks down what social entrepreneurship is, how it differs from traditional businesses, and how your business can become one that performs well and does good.
Social entrepreneurship blends business with a “triple bottom line”: people, planet, and profit. The mission is the reason the business exists, not an add-on.
Social enterprises typically take one of three structures: nonprofit, for-profit, or hybrid.
Social entrepreneurs treat profit as a means to a social or environmental goal, unlike traditional entrepreneurs who prioritize growth and returns.
No specific degree is required to practice social entrepreneurship; certificate programs like Â鶹´«Ă˝ÍŶӒs Social Entrepreneurship in Action Certificate build the needed skills.
In essence, social entrepreneurship applies entrepreneurial principles to solving social, cultural, or environmental problems. It’s distinct from corporate social responsibility (CSR), where a traditional business adds charitable giving to its normal operations. For a social enterprise, the mission is the reason the business exists.
This model is sometimes described as having a “triple bottom line”: people, planet, and profit. All three are treated as measures of success rather than profit alone.
Social entrepreneurs and traditional entrepreneurs share many of the same characteristics: They start businesses, manage teams, and help grow operations. The difference comes down to what each ultimately prioritizes in terms of success and where profit fits into that picture.
Traditional entrepreneurs are typically most interested in profit and growth, working to satisfy investors and ensure long-term financial success. Social entrepreneurs, on the other hand, are primarily focused on how their business operations advance a specific social or environmental goal. Profit is a means to that end, but not the end goal itself.
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While every social entrepreneur’s path and cause is different, most share a common set of traits:
Because social enterprises answer to a mission alongside a balance sheet, they can’t always rely on the same business strategies a traditional company would use to raise money or generate revenue. Instead, many fall back on a smaller set of business and funding models that enable impact and income to reinforce each other.
These can include the following:
How a social enterprise is structured determines where funding can come from, whether profits can be distributed to owners, and how much flexibility the organization has to pursue both mission-related and financial goals. Most social enterprises fall into one of three structures:
Social entrepreneurship comes with certain upsides and tradeoffs. For example, a mission-centered business can create customer loyalty and community impact in ways that are difficult for a traditional company to replicate. At the same time, however, the dual focus on mission and margin introduces friction that a traditional entrepreneur doesn’t have to manage.
Here’s a look at some additional benefits and challenges that social entrepreneurs commonly balance:
There are a number of companies — both large and small — that are widely known, largely successful, and that practice social entrepreneurship. Here are several brands you might recognize:
Eyewear manufacturer is known for its online eyewear store, but it’s equally well-known for its . For every pair of Warby Parker glasses purchased, a pair is distributed to someone in need through a global network of partners. To date, the program has distributed more than 25 million pairs of glasses in over 80 countries.
A top contender for the most popular ice cream company, was founded with as a primary focus. The company has long framed its mission around advancing human rights, supporting historically marginalized communities, and protecting natural systems, using its profits and platform to support causes aligned with those values.
For healthcare apparel manufacturer , making more comfortable, better-performing scrubs for health providers is the primary goal. Since its founding, FIGS has operated its , donating scrubs to healthcare professionals in resource-poor countries for every pair purchased.
Founded at the University of St. Thomas by two friends who wanted a business with meaningful social impact, set out with a simple mission: put a hat on every child battling cancer in America. Today, the company operates a Buy One Give One Program as well as donates 15% of add-on, accessories, and warehouse sales revenue to the fight against pediatric cancer.
is a high-end cosmetics company that sells handmade, vegetarian, and cruelty-free products, sourcing from fair-trade suppliers for everything from ingredients to packaging. Beyond its sourcing choices, Lush gives back through its, which donates fresh, unsold products to grassroots organizations working on human rights, animal protection, and environmental justice. The company fulfills more than 400 donation requests a year, and has diverted millions of products from going to waste since the program began.
Online retailer launched its in 2001, donating $1 from every purchase to a nonprofit partner of the customer’s choice. As an independently owned business, the company uses that independence to support causes it believes in, connecting customers directly with nonprofits doing work they care about. Since the program began, Uncommon Goods has donated more than $3 million to its nonprofit partners.
Since its founding, footwear company has pursued its mission to use business to improve lives. Today, TOMS supports children’s education, health, and well-being through grants and partnerships with nonprofits such as Save the Children. Since 2006, the company has given more than $200 million in grants and shoe donations, including over 100 million pairs of shoes,. TOMS is also a Certified B Corporation, meeting rigorous standards for social and environmental performance, transparency, and accountability.
Apparel brand started its business around a simple insight: Socks are one of the most requested items at homeless shelters, yet rarely donated because most shelters can’t accept used pairs. Under its model, every Bombas purchase triggers the donation of a specially designed sock, t-shirt, or underwear item to someone in need. Since its founding in 2013, Bombas has donated more than 200 million essential clothing items through a network of over 4,000 Giving Partner Organizations across all 50 states and beyond. The company is also a Certified B Corporation.
Founded by actor Paul Newman in 1982, donates 100% of its profits from food and beverage sales to charitable causes, making it one of the longest-running examples of a for-profit company built entirely around philanthropic giving.
is a nonprofit that was founded in response to the reality that over a billion people worldwide are unbanked, without access to a credit card, debit card, or credit history that could help them secure a loan. Through Kiva, everyday people are able to fund small loans to entrepreneurs and borrowers who are otherwise shut out of traditional lending, from small business owners abroad to systemically marginalized communities in the U.S. To date, more than 5 million people have used Kiva loans to grow a business, recover from crisis, or build financial stability.
Companies aren’t the only entities that practice social responsibility. A number of individuals have founded or invested in organizations that continue to make a difference across the world. Here are four to know:
Bill Drayton founded in 1980, working to identify and support social entrepreneurs around the world. Today, Ashoka’s fellowship has grown into the largest global network of its kind, supporting more than 4,000 Fellows across nearly 100 countries.
Grameen Bank (now the) founder Muhammad Yunus was awarded the Nobel Peace Prize for the organization’s work. Grameen Bank is a microfinance organization providing small loans, primarily to women, to help lift them out of poverty. Since 2016, the foundation has impacted more than 29 million people around the world.
Jacqueline Novogratz founded in 2001, which uses patient, long-term capital to fund businesses focused on solving social issues. The organization has since impacted more than 700 million people worldwide and trained over 2,000 social enterprise builders through its leadership development program, Acumen Academy.
TOMS founder Blake Mycoskie started the company with a mission to donate a pair of shoes for every pair purchased. He stepped back from the company in 2014 to found the mental wellness nonprofit . Under the model he pioneered, TOMS has since grown to give over $200 million in grants and shoe donations.
If you’re an aspiring entrepreneur or a business owner looking to make a difference through your business, here’s one way to start:
While many standard business practices apply, this field also draws on theories of entrepreneurship, models of social change, and leadership skills specific to mission-driven organizations.
One of the best ways to build the skills that social entrepreneurship requires is through education, specifically a structured certificate or course offered as part of an accredited program. At the Â鶹´«Ă˝ÍĹ¶Ó Division of Professional and Continuing Education, we offer a Social Entrepreneurship in Action Certificate that covers the field’s core elements in an accessible online format.
Related programs to explore include:
Or, if you’re looking for introductory information before committing to a formal program, check out these free resources:
Yes, social entrepreneurship can be a profitable career path. It’s a business model designed to sustain itself financially while pursuing its mission. Many social enterprises generate healthy revenue through earned-income models, product sales, or fee-for-service offerings, then reinvest profits back into their cause. The mission comes first, but financial sustainability is what allows that mission to keep running.
Compensation for social entrepreneurs varies widely based on the size, structure, and industry of the organization. Founders of larger, established social enterprises can earn salaries that are comparable to those of traditional business leaders.
No specific degree is required to become a social entrepreneur. What’s most important is developing the right mix of business skills and mission-driven experience, which can come from a business degree, hands-on nonprofit work, or targeted coursework. Many aspiring social entrepreneurs gain these skills through certificate programs in nonprofit management, entrepreneurship, or social impact rather than a full degree program.
Social entrepreneurship shows up across nearly every industry, but it’s especially common in apparel and consumer goods, food and agriculture, financial services (particularly microfinance), healthcare, clean energy, and education. These sectors often have clear, measurable social or environmental problems, such as access to clean water, financial inclusion, or sustainable production, that lend themselves well to a business-based solution.
Yes, it is possible for an existing business to become a social enterprise without starting over. Common approaches include launching a giving program tied to sales, switching to ethically sourced materials or suppliers, restructuring as a hybrid or nonprofit-affiliated entity, or pursuing B Corp certification. The key is embedding a specific social or environmental mission into the business model itself, not just adding charitable giving on the side.
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