Social enterprises solve social problems using business models. Their goal is to achieve sustainability by allowing non-profit organizations to support themselves financially instead of relying solely on donations and grants. Revenue-generating activities for non-profits organizations have created new operating models where market characteristics, business values, and principles co-exist and work with public values like serving the public interest and responsiveness to the community. For a social enterprise to succeed there must be an effective business model.
Normally, a business model includes two main elements:
An operating strategy—includes internal organization structure and external connections or partnerships that are important for creating the intended impact of the business; and
A resource strategy– defines on what terms and where the business will get the resources it needs to do its work,
Business models for social enterprises are the channel that social entrepreneurs convert inputs into outcomes, generating both economic and social value. Social enterprise can be integrated with non-profit organizations in three ways:
Embedded: The social program and the enterprises are one and the same
Integrated: The activities of a business overlap with the social programs
External: Business and social activities are separate and not related to the organization mission.